Data democratization has lost its “fancy concept” status for a while now. The rapid growth of data analytics apps market only proves that. If you go to all the startup launching websites – Product Hunt, AngelList, you name them – you’ll see pages of newly emerging companies that offer business intelligence consulting or simpler data analytics solutions. So what is it about analyzing data that’s become so trendy and hot?
Why Data Democratization?
Data analytics apps are a mere part of a bigger trend towards data democratization. If up to now, access and accumulation of data within businesses were really the privileges of data scientists, analytics, or companies’ top executives, now it’s already been widely accepted that there is no need to treat data as an elitist concept. In fact, concealing data is the crime against a successful business development, not the other way round. With 2.5 quintillion bytes of raw data being produced every day, its 99 percent remains completely unused and simply floating in its own data space without bringing any further benefit.
Data Source: Analytics Magazine
So if you think about it, having this much data that goes to waste equals to us, humans, having a huge brain capacity and never using it. And if there’s not much we can do about our brain, it’s a completely different story when it comes to data. Data-informed decision making, maintaining a competitive edge, and giving employees access to information they already have is what makes data democratization, brought by various BI and Data Analytics tools, simply irresistible.
Business development in general is now largely based on the concept of more engaged and ever-increasing employee participation in companies. Experimenting with a hierarchical structure, bringing about agile systems to provide higher efficiency, are all possible only if data is accessible to wider circles of people. Not to mention startups that are trying to attract venture capitalists to invest in their businesses. In fact, the majority of BI tools are playing on the “transparency” sentiment: having a transparent business, whose entire sales, inventory, marketing and any other data can be accessed by a simple click on a dashboard or by a voice query, is a priori an attractive feature for both employees and investors.
Data Democratization can be comparable (we’ll see in few years, of course) to the invention of the printing press, where the latter pushed a rapid expansion of literacy across the general public and has brought about more educated masses being able to participate in specialized and highly skilled labor. And if now an emphasis, especially in bigger and more IT-focused enterprises, is being made on developing a more equal and creative working environment, data democratization is the key to that development. If Google’s 20% rule really worked could this major search engine company’s employees access the data they need to develop new ideas and projects?
Another giant, Walmart, has created a Data Café – a cutting-edge analytics hub in Bentonville, Arkansas, where all the data, related to any aspect of its business, is accumulated and can be accessed by basically any worker, depending on his level of access. Walmart has already reported various victories – decreased costs and expenditures, smarter pricing strategies and so on – due to democratizing data it owns.
Barriers to Data Democratization
You may think that data democratization is the prerogative of large corporations who can afford to invest in the relevant software and human capital. But they aren’t yet rat racing towards complete transparency either. There are still many fears and challenges that even big market players are facing:
With more access to corporate data, the need for smarter data governance arises. And not everyone is certain how to define the access level of each team or employee towards various bits of data. However, some tools are already providing solutions for this, building templates or defining data interconnections and determining different access levels on a tailor-made basis.
Cybersecurity is another concern, especially for bigger enterprises. Data integrity can become a victim of wider access by different people. Once again, correct and secure data governance can spare any company from such threats, but cannot guarantee complete protection. Moreover, misinterpretation of data, especially by people who aren’t specifically trained as data analysts, can lead to some costly decisions.
The biggest and most tangible obstacle to data democratization comes from the actual means of making data widely available. Even though many data sets are already available from various sources (social media has its own inbuilt analytics tools, so does Google Analytics, email marketing platforms and many others), gathering all the data together is the challenge. Where do you store all the information? How do you arrange it so that it starts telling you a compelling story? How do you get to see the bigger picture and get insights?
However, a current rapid development of various BI and data analytics tools is already a huge step towards data democratization.
Why Business Intelligence and Data Analytics Tools?
The problem with data democratization is that people do not just need free access to data. They have to be able to interpret it, and in a more or less harmless way, since the cost of the wrong correlation can get really high. And this is where BI and data analytics tools enter the market. Although it is still doubtful whether an app can really bring you business insights on a silver platter, it can really make your job much easier and less prone to mistakes.
These tools can fetch up the bigger picture that the majority of teams, departments, or even C-level executives are often lacking. How does it work?
For instance, these tools can help your marketing team develop a product campaign that can be cross-checked with the pricing team, which, in its turn, can have some insights from the product development department. The latter could access some relevant data from market research conducted before deciding on the brand’s positioning, and look at information on competitors and overall demand. This is what a cross-functional intelligent business development strategy looks, or should look, like.
What is more important is that with the coming of BI and data analytics tools, and their rapid proliferation and high competition, data democratization is not a privilege of bigger enterprises anymore, but is now also available to smaller businesses too. The price of these tools, with different levels of complexity and sophistication, ranges from $20 to some impressive numbers. But all of these tools will offer to deal with the most common problems of data democratization, mentioned above, with the help of this:
Cloud-based solutions to data storage lead to breaking down data silos and building a common data repository. This ensures a more efficient and flexible solution available to businesses of any scale.
Self-service BI applications
They give non-technical users an opportunity to enter the field of data analysis without any background in data science. Although one should be cautious when offered a business insight with a complete lack of human interference, the data analysis algorithms are only improving. Therefore, some low-level decision making can indeed be made by merely looking at a dashboard filled with relevant data sets.
On the one hand, data democratization leads to higher transparency, more creativity and initiative within the organization, and more data-informed decision-making. On the other hand, it also creates new challenges: efficient and productive navigation in the sea of data with various levels of complexity, relevance, and credibility. And it is BI and data analytics apps that provide companies with the toolset for data analysis and getting a holistic view on different intertwined processes within their business.
Interpreted correctly, data can provide any company with a competitive edge, as it can drive down costs, display profitable areas that are not yet leveraged, and help make rational decisions. Moreover, these tools are becoming more affordable with each year, so they are also responsible for narrowing the gap between capabilities of larger and smaller businesses.
Thus, it seems inevitable that sooner or later any company of any size will employ data democratization principles, on all or fragmented levels. So it is better to jump on the data analytics bandwagon before everyone else does and embrace this novel competitive advantage.