3 Key Benefits of Data Democratization
As companies around the world have come to understand just how valuable their data can be, many have struggled with data democratization and the question of how to unlock that value for stakeholders throughout their organizations. After all, there is a delicate balance between sharing information broadly within your company and ensuring that confidential information is safeguarded and managed in full compliance with the law. Over the past decade, governments around the world have responded to privacy concerns by enacting an array of new regulations aimed at ensuring that the privacy of their citizens’ information is protected.
The challenge for today’s enterprises, therefore, 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 that are willing to take on this challenge.
What Is data democratization?
Let’s begin by defining what data democratization means. Simply put, it 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 plenty of 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 well-intentioned 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. An effective data quality program, therefore, is an essential prerequisite to data democratization.
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When these risks are understood and addressed 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 have come to 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 a company is successful in integrating, harmonizing, and enriching its existing customer data, regardless of where that information resides, it 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 they 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 information is centrally controlled by a gatekeeper, 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: 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, then they can’t use that information to help solve their problem.
When a company’s data assets are cataloged 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 must be built on a solid foundation of data quality and effective data governance. That’s critical to ensure that confidential information is protected, and that the organization remains fully compliant 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.
Watch our webcast, Overcome Compliance Challenges in the Age of Data Democratization, to learn how you can democratize access to data, while adhering to data privacy mandates and managing risk to your business.