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We’re going to have a tough couple of quarters. Or maybe we’re not. This sums up the mood of almost every economist, business analyst, investor, talking head, and armchair advisor over the past few months. When it comes to our macroeconomic outlook, it depends who you ask.
Make no mistake; There are many worrying signs pointing to an ailing economy: inflation, widespread layoffs, slashed revenues, devaluations, sluggish investment, and volatile geopolitics. But whether we’re witnessing the eyewall of another full-blown global recession or just gusts of regional economic headwinds, companies of all sizes and sectors have proactively begun closing the hatches.
In these times of ongoing tax uncertainty, I regularly get a question from clients, prospects, and executives whose digital transformation journey is already underway or about to begin: “What should we do in terms of our data strategy?”
I’m glad you asked.
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Transformation 2023
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1. Do not put the data socket on the street
If there’s one piece of advice you take with you, let it be this: As tempting as it may be to pause, delay, or postpone your data management and larger digital modernization efforts during economic downturns, don’t do it.
Digital transformation is not a light switch that you simply turn on and off. Businesses cannot slow down; Once started, momentum must be maintained. The innovation curve has become significantly more exponential, and unless customers focus on long-term, mission-critical transformations, they are unlikely to be able to escape recessions, pandemics, and other economic quagmires.
“This too shall pass” is a favorite maxim of actor Tom Hanks, and it illuminates this very point – economic peaks, plateaus and troughs are cyclical. In April 2020, American Airlines purchased and implemented our solutions. To be honest, I was surprised at the chaos caused by the pandemic. When I called her, her rationale was clear: transformation cannot stop. They recognized the need to understand their customers better, and even if their business closed for six months, people would be flying again. They needed to drive long-term investments and stay ahead of changing customer behavior. They just couldn’t afford to sit around and wait for the pandemic to pass to get started.
2. Enable data democratization
A consequence of downturns is often the loss of talent, either voluntarily or through layoffs. When it comes to data management and digital transformation, it can create significant disruptions to productivity and accessibility when traditional gatekeepers such as IT or data teams are compromised.
Reduce the burden on IT staff and minimize your risk by empowering other departments and line-of-business users to own the data they need, use frequently, or have expertise. This can be a culture shift as well as adopting new tools, but consider incorporating more plug-and-play solutions, low-code/no-code SaaS, and self-service products that can help improve data access and simplify tasks for even the least data-savvy employees.
It is clear that this is already on the minds of many leadership teams. In a recent study commissioned by Informatica from Wakefield Research, 46% of the 600 chief data officers, chief analytics officers, and chief data and analytics officers we surveyed from the U.S., Europe, and Asia Pacific said that they improve a data-driven culture and education 2023 priority.
3. Prioritize existing data talent
While not necessarily specific to data management, in this context I often say to any leader who will listen: minimize complexity by maximizing talent. In a downturn, when hiring pauses and freezes occur and layoffs can create skills shortages or gaps, lean on existing staff and encourage opportunities for training and advancement.
Undoubtedly, your data teams are driven by a desire to deliver innovative, mission-critical work. Focus on what that means, over-communicate, and foster a culture that current employees are proud of and potential employees are drawn to.
4. Trim the fat from the data tech stack
A natural response to economic unpredictability is to tighten our belts, tighten our wallets, and generally find creative ways to do more with less. In today’s businesses, most of us are guilty of tech stack bloat — apps, programs, tools, and software that were once added to our arsenal to make our jobs easier, but in reality may be gathering digital dust or being too expensive justify.
Now is a good time to review your existing data toolset, determine the products that deliver the most bang for your buck, and bury everything else. If you haven’t already, try streamlining your suite of solutions on a single, unified, cloud-native platform.
A comprehensive platform should include AI and machine learning that can simplify data management by intelligently automating manual tasks and accelerating key trends and insights. This can also help democratize the use of data and reduce time constraints on tech talent so they can focus on other key projects or strategic priorities.
5. Double down on your data security and governance
Unfortunately, there seems to be a correlation between increasing nefarious cyber activity and grim economic times. High turnover, internal turmoil, and general business instability can create environments prone to social engineering and other attacks.
With security breaches now costing organizations millions on average, bad actors astutely assume that organizations will have fewer resources, both capital and human, to strengthen their security infrastructure and protect their most valuable asset – their data. Add to this the complex and ever-growing requirements of data sovereignty laws and security/privacy compliance, and it becomes painfully obvious: if you don’t have a data solution with security, governance, and lineage built in – get one.
To be clear, a robust data strategy is not a cybersecurity solution, but it should be part of any organization’s larger digital security apparatus. In today’s hybrid, multi-cloud, multi-territory world, any data strategy worth its weight must automate and integrate data security, privacy, and governance. It is as unrealistic as it is irresponsible to rely on humans to ensure that all ts are crossed and all i’s are spread across thousands if not millions of datasets.
The next quarter or two will no doubt set the tone and pace for the rest of the year. As for macro, right now your educated guess is probably as good as anyone else’s. Regardless of what lies ahead, a strong, streamlined data strategy will be essential for all businesses to weather the storm and better serve their customer needs and business goals once the wind calms down.
Amit Walia is CEO of Informatica.
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