How to Explain Data Management Values to Your CEO / CFO
Data management is critical for business success, yet data teams (heads of data, data engineers, etc.) and senior business consumers (e.g., the C-suite, CEOs, CFOs) often need to be connected and more understanding of one another’s priorities. Despite data teams championing the positive impact of good data management on business operations, the C-suite is often more focused on optimizing budget and resources, which can lead them to overlook this critical area.
This article will explore the reasons for this disconnect and provide actionable tips for data teams to convince CEOs and CFOs why data management should be a business-critical priority.
Understanding the C-suite Perspective
The C-suite's responsibility spans business performance, budget, resource allocation, and more. One of their primary goals is to maximize growth, revenue, and profit, so they often allocate resources to areas of the business or departments that generate the most value, prioritizing short-term gains over long-term investments.
The C-suite is also more likely to allocate resources to factors that have the potential to pose the most significant risks. For example, they may prioritize standard cybersecurity investments to protect against potential data breaches, which can be costly and damaging to the business, over other IT needs and security tactics like data management. All these decisions and more contribute to one thing: maintaining a strong competitive position in the marketplace, including investing in new technologies or developing new products and services.
Data users know data management is a viable solution to all of the above concerns and can help organizations become more efficient, flexible, and agile. So, what do we see that the C-suite sometimes does not?
1. Short-term vs long-term focus
C-suite leaders may not recognize the benefits of having a single source of data truth that all departments can rely on. If all departments (especially data teams) seem to be functioning fairly efficiently, executives might take an “if it ain’t broke, don’t fix it” approach. But they might not see what happens behind the scenes: a lack of visibility over all data assets, time wasted due to inaccessible data, or extra resources spent on decision-making because of unreliable data.
2. Is data management a daunting task?
Data management can be perceived as a complex and technical issue, making it difficult for data teams to effectively communicate the value to non-technical executives. There may be a potential knowledge gap within the C-suite regarding the risks of poor data management, despite the fact that they tend to be risk-averse. For example, does your C-suite recognize the full extent of the use cases for up-to-date and accessible data, such as BI querying and enterprise reporting; real-time streaming and data integration; better long-term budget and resource allocation; enhanced data governance; agility for a competitive advantage?
Remain Transparent With the Short- and Long-Term Rewards
Investment in data management now improves operational efficiency in the long run, as incorrectly managed data causes significant problems like data duplication, errors, and inconsistencies, leading to wasted time and resources as employees struggle to sort through and make sense of the chaos. ‘Resources’ is clearly a keyword for the C-suite, and data management practices can also help identify areas where resources may be wasted or underutilized, allowing companies to adjust and optimize their operations.
Without a data management tool, your business might struggle to identify ways to optimize your data spend, whether that’s understanding irrelevant or inefficient storage and computer charges, or finding expensive tables and jobs that can be reduced. Therefore, it’s important to shine a light on the fact that data management plays a key role in tracking and reporting costs in real-time, which is of utmost importance to the C suite.
In terms of the short and long-term benefits of data management, these are easily communicable to the C-suite:
● Accurate and reliable data
Clean, organized, and up-to-date data (as achieved through data management) is more accurate and reliable, which is essential for making informed business decisions. When data is reliable, decision-makers can have confidence in the information they use to make strategic decisions.
● Better insights
Data analysis is essential for uncovering a deeper understanding of customer behavior, market trends, and other vital factors that impact business success. By having a complete picture of the data, decision-makers can make more informed decisions grounded in data-driven insights.
● Faster decision-making
The businesses that succeed in being agile and responsive to market changes are the ones that can make decisions at the drop of a hat. Therefore, the ability to quickly access reliable data isn't just a nice benefit – it's a competitive advantage.
● Improved efficiency
When data is properly managed, errors like duplicate records, missing data, or other issues are less likely to occur, improving efficiency and cost savings. Good data management practices allow businesses to streamline operations and maximize their resources.
● Improved customer satisfaction
When companies have clean and accurate data, they can better understand their customers' needs and preferences and tailor their products and services accordingly. Having easily accessible customer information improves the speed and quality of customer service.
Overcoming the Disconnect
Data teams can use the following tips better to communicate the importance of data management to the C-suite.
- Speak their language: Communicate the benefits of data management in a way that resonates with the C-suite, such as focusing on the bottom line and the impact on business outcomes. Communicating the above five benefits is a good place to start.
- Provide proof points: Data teams need to provide concrete examples of how good data management has positively impacted your company and competitors in the past. The proof points should include data (of course), case studies, market research, and statistics.
- Quantify the costs: C-suite executives want to weigh up the costs and risks of poor data management to determine whether it is worth the investment. We know that it is, but to convince them data teams can provide examples of the costs associated with poor data management. For example, what is the financial impact of unreliable analytics or poor data governance?
- Use data visualization: Data teams can use data visualization to help communicate the impact of data management. Platforms such as Aggua help data teams gain a holistic view of their data pipelines, thus increasing the value of the data itself.
- Foster collaboration: Data management benefits business users just as much as data users, meaning it should be a collaborative effort. Data teams should work closely with the C-suite to understand their priorities and concerns so they can tailor their message to the needs of the C-suite.
Bridging the data management disconnect between data teams and the C-suite is crucial for companies looking to make effective, data-backed decisions. By effectively communicating the benefits of data management, data teams can help demonstrate the value of data and secure the necessary resources to manage it properly. Investment in a collaborative data management platform like Aggua can ultimately result in improved decision-making, streamlined processes, reduced costs, and better long-term resource allocation. With Aggua, you can gain visibility and insights over your computing and storage costs in real-time, helping you to identify opportunities, to cut back on redundant costs and view suggested ways to optimize your spend.