Janus Henderson Investors

In the last few years, digitization has become a differentiating factor in many industries, putting pressure on profits, changing how information is shared among internal processes and exchanged outside of the usual confines of a company. At the same time, that transformation, while creating new opportunities for businesses, introduced rivals from outside traditional industry boundaries.The slow and inefficient, those whose information architecture lacks vision and cohesiveness, become spectators on the digitization train.

In the digital area, data has become the precious blood of organizations, whether for business development, strategy enablement or self-service democratization. It’s no surprise then that Data architecture has been consistently identified by executives as a top challenge going forward. Most of them recognize they don’t get the expected value from their architecture programs.

Why is that? One of the key reasons – apart from lack of sponsorship or poor execution – stems from many companies taking a technology-first approach, building major platforms while focusing too little on strategic business use cases. Many of the same companies embark on digitization enablement by making their IT departments responsible for data transformation.They focus on “what to do” rather than “Why doing it”. This strategy is quite different from that employed by current digital leaders, who typically embark on transformation from a business perspective and implement supporting technologies as needed.

Data architecture is about standardizing how organizations collect, store, distribute, and use data. The overarching goal is to deliver relevant data to people who need it, when they need it, and help them understand it. That definition has been agreed upon for years, but digitization introduced a new spin on it, leveraging the exponential advances in technology infrastructure. It changed the speed at which businesses want to access data. It increased the number of data sources companies rely on to make more educated decisions.

  Having Strong Data Governance Programs That Include Establishing A Single Glossary Across The Supply Chain, Is A Mandatory Requirement For Successfully Meeting Business Objectives   

To be successful in that context requires strong(er) governance of the architecture. At two different levels:

- Define a common language: This is becoming more and more complex. As the traditional boundaries of companies expand to now include new actors of the information supply chain – cloud platforms providers, data providers such as market data or market intelligence companies, or real-time feeds like any of the social media platforms –understanding each other is turning into quite a challenge. Having strong data governance programs that include establishing a single glossary across the supply chain, is a mandatory requirement for successfully meeting business objectives.

- Establish information architecture standards: Traditionally, data architectures have focused on removing duplication and focusing on timely transport of information. A very defensive stance. More mature architectures involve complete taxonomy of data quality services to connect day-to-day operations – quality monitoring and exception processes – to competitive business capabilities and mastering applications,which will become the de-facto cornerstones of the architecture. Creating an Enterprise Architecture review board that will define those standards and control the compliance to the standards in the technology execution constitutes the additional mechanism to bring business strategists and technical expertise around the same table. Together, they can determine what data is needed to propel the business forward, where it can be sourced from, and how it can be shared to provide valuable information for decision makers.

The key feature of an effective Data Architecture is in the alignment with business drivers. Today’s digital leaders not only understood that connection, but they also embedded data practices deep in their organization to lead all actors – from business, through operations, governance and technology – to common strategic goals.