What is Data Democratization and why should big organizations care about it?
Before we get started, let me tell you a short story. A teacher once gave an assignment to all its students to write a short story using a certain set of five words. All the students were given the exact same five words and asked to use them as critical elements while designing their stories. In the end, the teacher realized that all the stories were unique and interesting. Some students had used all the words and fabricated an output, while some students had partially used the keywords but still created an impressive narrative. Some stories were incongruous, while few of the stories had a compelling flow to them. The teacher was pleasantly surprised to receive these diverse viewpoints and “angles” from all students. That brings us to the moral of our story which is the basic building block of data democratization. Fresh ideas and observations can be brought to the table when minds from diverse backgrounds work on them in parallel. It can open up new and unexplored avenues of thought, enhance “out-of-the-box” thinking strategy yearned by organizations, and assist in expediting the decision-making process.
So, what is Data Democratization actually?
Data Democratization essentially means that everybody in an organization will have access to company data (be it Sales, P&L, Promotions, Ratings & Reviews and so on depending on the type of company) and can use it to make informed decisions. Smaller teams will no longer have to request core data teams within the organization to grant data access. Today, many big organizations such as Airbnb and Cognizant have vocally supported data democratization time and again. Data is no longer just a resource, but it is the fuel that drives growth, innovation, and profitability in the organization. With data democratization, organizations wish to decentralize data authority and accessibility. The plan is to support other teams while also providing them with easy navigation and interface capabilities. The end objective of this is to ensure that anybody in the organization can leverage data in their decision-making process and this entire gold mine isn’t hoarded by just a central team (such as IT, Data COE, etc). It is also a two-way road. The analysis and insights generated by one team can be cross-leveraged by other teams thus essentially making it a win-win situation for everyone. Having said that, we certainly have a fair share of the audience out there propagating data democratization, while few are wary of the idea of implementing it in their organization. Let’s look at the reasons why!!
Pros of Data Democratization
1. “I feel” to “I know”: After data democratization, everybody in the organization right from an IT consultant to a Data Scientist, from a Chief Operations Officer to an HR Leader will be able to access and make sense of the data thus invariably using it to make informed decisions. It is a huge transformation from the conventional way where smaller teams made their decisions based on assumptions or referring to few quarterly business reports. Now everyone will be able to see the true picture with tangible data at their fingertips.
2. Diversification of Insights: With multiple smart teams pitching in with their viewpoints and insights, organization-wide decisions will be unbiased and complete in the most sense. People with varied backgrounds, skill sets, and business knowledge can be contributors to the strategy-making process. A paper published by Cognizant proves the immense growth potential it sees in this tactical shift.
3. Building stronger engagement, empowerment, and accountability: Many organizations struggle to build collaboration between their different business units and enterprises. Giving them a common ground of data will ensure an extremely high level of engagement and will also highlight the level of trust that the organization has in the people which is one of the key pillars on which data democratization is built.
4. Speed: We can expect a business problem to be solved faster owing to the different brains working towards innovative ways to resolve certain defined issues. In fact, a study by Workday from 2019 states how organizations practicing data democratization will be more likely to make better and faster decisions.
5. Revenue streams: Across the globe, many businesses have flourished and gained revenue by empowering their staff with data. For example, say providing your Customer Care team with Shopper Preference data (also called Panel or Demographics data) will surely help them navigate through customer problems more effectively and provide meaningful solutions. This in long term will help in reducing costs and increasing revenues.
Concerns about Data Democratization
1. Misinterpretation of data: Many organizations still fear sharing data with other teams with a primary concern of the data being translated wrongly. While there is proper training given to Data Engineers, Analysts, and Data Scientists to harmonize and map data, this kind of knowledge base and expertise will be relatively lower in a non-technical team. Thus, using results generated through partially processed data can lead to a series of erroneous decisions. There are Data Literacy programs that tackle the most important problem which is the discomfort and skillset deficiency that exists in employees on using the data in the right way.
2. SSOT will be non-existential: Every individual can create their separate data repositories and thus a Single Source of Truth (SSOT) will cease to exist. Data integrity will become a challenge as the same dataset will be available to multiple users and each one will create a separate version for his/her usage.
3. Duplication of efforts: Multiple teams will be working on very similar analysis or dashboards and this could cost organizations even more than having a centralized analysis group. A competent governance team should be set up in order to constantly monitor solutions across teams to curtail such redundant efforts and wastage of time and resources.
4. Legal and ethical concerns: It will be imperative for the Data Governance team to safeguard the company from security breaches that might be caused due to accidental or planned data spills. In fact, there are many organizations that do not even let internal data movements on political and cultural grounds and have strict data compliance checks in the system.
Summary
Before wrapping up, I would like to loosely touch upon the technical innovations that would be essential and equally critical while embracing data democratization. Cloud computing, data virtualization software, and data federation software are growing and widely implemented in many organizations. Though the core objectives of these initiatives might vary and be bespoke in nature, it cannot be denied that organizations are moving away from data silos and working on creating large data lakes in order to provide a one-stop station for everyone to access data.
To summarise data democratization helps organizations in easy insights discovery, enables self-service, and paves the way towards newer and additional revenue streams. Though there are concerns of data being interpreted wrongly, losing data integrity, and bigger risks of data leakage which is an extremely perilous affair, organizations are uncompromisingly setting up Data Governance and Guidance teams to tackle these issues. It is too soon to comment on the adoption and adaptability of data democratization but there are hints that with the right ingredients and steps, it might totally transform our ways of business communications, building BI solutions, and making decisions. What are your thoughts? I’d love to hear from you.
