5 Key Benefits of Data Democratization

As companies around the world come to understand just how valuable their data can be, many struggle with data democratization and the question of how to unlock that value for stakeholders throughout their organization. There is a delicate balance between sharing information broadly within your company and safeguarding and managing confidential information in full compliance with the law. Over the past decade, governments have responded to privacy concerns by enacting an array of new regulations aimed at protecting the privacy of their citizens’ information.

The challenge for today’s enterprises is to figure out how to optimize the value of their data while fully complying with regulations such as GDPR (Europe’s General Data Protection Regulation), CCPA (the California Consumer Privacy Act), and Australia’s DPP (Data Privacy Protection). Nevertheless, data democratization has immense benefits for organizations willing to take on this challenge.

What Is data democratization?

Simply put, data democratization refers to a process in which virtually anyone within the organization has the ability to use data to inform better decisions. Regardless of someone’s role within the company, they have access to data and the tools they need to use it effectively.

On the surface, that sounds great, but is it really a desirable target? Do you really want everyone in your organization to have access to a list of the prospects in your sales pipeline? Do you even want sales executives to have full visibility to that list? Would you want to allow a low-level employee to download a full customer list, along with contact names, addresses, and purchase history? Clearly, there are scenarios in which an organization will want to safeguard confidential information for internal business reasons. An effective data democratization initiative must account for the need to secure the company’s valuable confidential information.

A second concern revolves around privacy regulations such as GDPR, CCPA, and DPP. Although these laws initially emerged several years ago, they continue to evolve as technology changes and as court decisions further shape their implementation.

Finally, there is the question of the unintended misuse of data.  An uninformed user, armed with a body of data that they don’t fully understand, could reach incorrect conclusions, leading to poor business results. A trained data scientist, for example, will be fully aware of potential pitfalls resulting from poor data quality and will likely take the necessary steps to account for that risk. A novice using the same information may not fully understand the risks in the first place. That’s why an effective data quality program is an essential prerequisite to data democratization.

When your organization understands and addresses these risks effectively, the benefits of data democracy are clear. Let’s look at a few examples.

Benefit 1: Getting a 360° view of the customer

In today’s world of integrated digital technologies, customers expect a consistent, unified experience whenever they interact with your organization. For years, marketing departments have struggled with the challenge of reaching the right customers at the right time, with the right message. In today’s data-driven world, organizations are in a better position than ever before to meet this challenge head-on. When your company is successful in integrating, harmonizing, and enriching its existing customer data, regardless of where that information resides, you can begin to develop a powerful 360° view of every customer.

Now imagine making that 360° view of the customer available to everyone in your organization who could potentially use it. For the marketing department, that means greater effectiveness in messaging to existing customers, as well as more efficient marketing spend. For product management, it provides powerful insights into which audiences the company serves today, and which ones it might serve in the future. It also provides a view to potential new products and services to increase the company’s share of wallet. For top management, it provides a clearer view of where the company is succeeding, and where it is falling short.

An effective data democratization initiative opens the door for virtually any individual or department in the organization to put that 360° view of the customer to use in creating business value in new and often unpredictable ways.

Benefit 2: Fostering innovation

Innovation often starts at the ground level. Someone working on the front lines has an idea, explores a possibility, and shares it within a team. Discussion and experimentation often follow, leading to further exploration and eventually a breakthrough.

When a gatekeeper controls information centrally, it creates barriers to this kind of innovative thinking. In many organizations, stakeholders are not even aware of what data might be available to them. A company that embraces data democratization, on the other hand, begins with the presumption that innovation will happen, provided that the right tools are in place. For data democracy, that necessarily includes effective data quality and data governance programs.

Benefit 3. Enabling Seamless Remote Work

Data democratization is all about self-service. That means things can get done much faster than they otherwise could. In a traditional office environment, a tried-and-true method for expediting inter-departmental requests might involve walking down the hall to have a face-to-face talk with your colleague from IT. In a virtual office environment, that doesn’t work quite so well, especially when many are working extended hours or flex time.

Imagine, for example, that you’re planning a new marketing campaign aimed at your company’s existing customers. You need to pull a list of customers who purchased an older version of your flagship electronics product so you can analyze your target audience further. You suspect that many of them may be ready to upgrade to a newer edition. Before you launch your campaign, you want to know how many customers fit into this category, where they live, and into which demographic profiles they fit.

In many organizations this might meaning creating a new IT ticket, explaining what you need, and getting in line with everyone else waiting for the results. In an organization with an effective data democratization program, it’s simply a matter of selecting and analyzing the information yourself. This self-service approach is a game changer for remote workers.

Benefit 4. Improved Customer Experience

Data democratization isn’t necessarily always about empowering your employees. Sometimes it’s about empowering customers. Consider what happens when you use an app on your mobile phone to call for a ride-sharing service. Within moments, you’ll see how close the nearest drivers are, and once you have selected a ride, you’ll have a clear idea as to when it will arrive.

Although that might not seem quite like an exercise in data analytics, the principle is the same: information is powerful. By providing their customers with a constant stream of updated information, ride-sharing companies can improve the overall experience.

Utility companies and telecoms, likewise, are democratizing service data for their customers. Consumers can download and analyze their electrical power usage to better understand how they might decrease overall consumption. Telecom companies provide downloadable call records and data usage history. Governments, too, are making data available to their citizens. During the COVID crisis, for example, citizens were eager to get updated stats on case counts, hospitalizations, and more.

The bottom line: people like to stay informed. By making data available to consumers, companies can deliver a better overall customer experience.

Benefit 5. Streamlining Internal Processes

Data democratization also fosters a broader understanding across the organization about the company’s information assets. Imagine, for example, that the shipping department suffers from an unacceptably high number of late deliveries resulting from bad address information and that the sales tax compliance team has implemented a robust geocoding and address verification system designed to ensure full compliance with local and state tax laws. If the shipping department is unaware of the tax team’s capabilities, they can’t use that information to help solve their problem.

When a company catalogs its data assets effectively as part of a broader data governance initiative, someone might recognize that the organization already has access to the information that could help to resolve its shipping issues. An effective data integrity program will address this problem and improve the company’s internal processes to achieve lower costs and a better customer experience.

Ultimately, data democratization requires a solid foundation of data quality and effective data governance. That’s critical to ensure protection of confidential information and full compliance with privacy regulations such as GDPR, CCPA, and DPP.

Precisely helps companies maximize the value of their data, making information a strategic and tactical asset. We offer products and services to enhance data quality, deliver seamless integration, add location context, and improve customer engagement.

Read our eBook Managing Risk & Compliance in the Age of Data Democratization which describes a new approach to data accessibility within an organization, while ensuring that proper governance is in place.