Johannesburg, 07 Jun 2021
Three hundred years ago, Adam Smith released The Wealth of Nations, a book that helped create the modern world by redefining what wealth means. Before his views became public, economies essentially ran on a mercantile system.
In the same vein as Scrooge McDuck, the size of your fortune was the measure of your wealth. Smith disagreed as, in his opinion, wealth should not be measured by the amount of gold that someone has, but by how it is utilised. And thus, wealth was known to be measured in currency. Once societies grasped this fundamental difference, the very fabric of the world changed, toppling empires and liberating people.
These events are playing out again today, but the new currency isn't in gold or silver, it is data, says Kamal Ravjee, Senior Business Development Manager at Axiz: "The world is transforming to use digital and the engine behind all of this is data. This is why data becomes your most valuable currency."
The signs of a data-first world are all around us, from discovering new artists on Spotify to the debilitating ransomware attack on US oil pipelines to how quickly vaccines were developed. All these events rely on data being used effectively.
Data should be the focal point of digital transformation. Every organisation, from a spaza shop to a multinational, generates business data. Once they tap into the digital era, their data stockpiles grow rapidly and should be harnessed as a business asset.
"Data is knowledge. It's knowledge about your customers, It's knowledge about your market. It's knowledge about your people. But only if you use it correctly," says Ravjee.
Making currency out of data
Hence the mercantile-shift example. Stockpiling data is not considered a wealth of knowledge. So, how do you turn data into currency? Companies often get unnerved by the sheer amount of data they have. Data can quickly devolve into something demanding more maintenance than it seems worth.
For this reason, Ravjee explains that there must be a strategy in place to align data projects with business outcomes. "No doubt about it. Yes, you have different business units, different departments, different divisions, saying 'My data is more important, it needs to be kept.' But getting buy-in on a strategic management or executive level to build a prioritisation framework will identify those key areas that we can deem high value within the organisation."
For this reason, Ravjee explains that there must be a strategy in place to align data projects with business outcomes. "No doubt about it. Yes, you have different business units, different departments, different divisions, saying 'My data is more important, it needs to be kept.' But getting buy-in on a strategic management or executive level to build a prioritisation framework will identify those key areas that we can deem high value within the organisation."
- You can make data a business currency through a few steps:
- Create an underlying strategy that articulates the overall business outcomes.
- Determine the sprawl and quality of your data.
- Create a prioritisation framework, linking data to the different value areas of the business.
- Establish technology systems that support those areas so they can achieve business goals.
From stockpiles to real data wealth
Data priorities can run in many different directions. Without an underlying discipline to the data environment, the enthusiasm of different parts of the business could end up derailing the currency project. The strategy defines the business outcomes you want from data.
With a strategy in place, you can activate the next steps: audit your data to determine its sprawl and quality. Ravjee explains: "The quality of the data is vital to any company making strategic decisions. If you look at attributes around the accuracy of data, you need to ensure that the data is consistent, complete, reliable and relevant to what the organisation is trying to drive." By determining the accuracy of data, you can build a prioritisation framework to understand which business units provide different levels of deliverables and which data needs to connect to them.
Once a solid grasp on how data needs to behave in the business is in place, the next step is to put the software and infrastructure in place. Ravjee explains further that "infrastructure is brought into an environment and segmented into different tiers. And those different tiers will keep the different types of data. You have the high importance, high quality data that is required instantaneously on faster tiers, and allocated down to the low-quality data that you need to keep."
In conclusion, when Adam Smith urged kings to loosen the purse strings, he pushed them to look at money differently. It was a paradigm shift that led to modern economies. We take his insights for granted, but it took a revolution of thought and action to adopt them. Today, we are at the same crossroads with data: to secure your business's place in the future, redefine data as a currency it can use.
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