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We’re in for a rough couple of quarters. Or maybe we’re not. This encapsulates the sentiment from just about every economist, business analyst, investor, talking head and armchair advisor over the last few months. When it comes to our macroeconomic outlook, it depends on who you ask.
Make no mistake; there are plenty of concerning signs to suggest an ailing economy: inflation, widespread layoffs, slashed revenues, devaluations, sluggish investment and volatile geopolitics. But whether we experience the eyewall of another full-blown global recession or just gusts of regional economic headwinds, enterprises of all sizes and sectors have proactively begun to batten down the hatches.
During these times of protracted fiscal uncertainty, a question I regularly receive from customers, potential clients, and business leaders whose digital transformation journeys are underway or about to be is, “What should we do about our data strategy?”
I’m glad you asked.
Join us in San Francisco on July 11-12, where top executives will share how they have integrated and optimized AI investments for success and avoided common pitfalls.
1. Don’t punt the data can down the road
If there’s a single nugget of advice you take away, let it be this: as tempting as it may be to pause, delay or defer your data management and larger digital modernization efforts during economic downturns — don’t.
Digital transformation isn’t a light switch you simply flip on and off. Enterprises cannot slow down; once started, momentum must be maintained. The innovation curve has become significantly more exponential, and if customers don’t focus on long-term, mission-critical transformations, they will likely find themselves unable 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 valleys are cyclical. In April 2020, American Airlines purchased and implemented our solutions. Frankly, given the pandemic-related chaos, I was surprised. When I called them, their rationale was enlightening: Transformation cannot stop. They recognized the need to understand their customers better, and even if their business shut down for six months, people would fly again. They needed to propel long-term investment and get ahead of changing customer behavior. They simply couldn’t afford to sit and wait for the pandemic to pass to get started.
2. Empower data democratization
A consequence of downturns is often talent loss, either voluntarily or through layoffs. When it comes to data management and digital transformation, it can cause severe disruption to productivity and accessibility if traditional gatekeepers like IT or data teams are impacted.
Reduce the burden on IT personnel and minimize your risk by empowering other departments and line-of-business users to own the data they frequently need, use or have expertise about. This can be just as much a culture shift as it is introducing new tools, but consider integrating more plug-and-play solutions, low-code/no-code SaaS and self-service products that can help simplify data access and tasks for even the least data-literate employees.
It’s clear this is already on the minds of many leadership teams. In a study Informatica recently commissioned from Wakefield Research, of the 600 chief data officers, chief analytics officers and chief data and analytics officers from the U.S., Europe, and Asia Pacific we surveyed, 46% reported improving data-driven culture and literacy as a 2023 priority.
3. Prioritize existing data talent
On that note, while this is not necessarily data management-specific, I often tell any leader who will listen: Minimize complexity by maximizing talent. In a downturn when hiring pauses and freezes, and layoffs may lead to skills shortages or gaps, lean on existing personnel and encourage opportunities to upskill and uplevel.
Undoubtedly, your data teams are driven by the desire to do cutting-edge, mission-critical work. Focus on what that means, over-communicate, and nurture a company culture that current employees are proud of and potential employees are attracted to.
4. Trim the fat from the data tech stack
A natural reaction to economic unpredictability is to tighten belts, hold the purse strings and generally find creative ways to do more with less. In today’s enterprises, most of us are guilty of tech stack bloat — apps, programs, tools and software that have at one time been added to our arsenal to make our jobs easier, but in fact, may be gathering digital dust or are too expensive to justify.
Now is an opportune time to audit your existing data toolset, determine the products that deliver the most bang for your buck and graveyard anything else. If you aren’t already, look to streamline your suite of solutions into a single, unifying, cloud-native platform.
A comprehensive platform should incorporate AI and machine learning, which can simplify data management by intelligently automating manual tasks and accelerating key trends and insights. This can also aid in the democratization of data use, alleviating time constraints for tech talent to focus on other key projects or strategic priorities.
5. Double down on data security and governance
Unfortunately, there seems to be a correlation between increased nefarious cyber-activity and bleak economic times. High turnover, internal turmoil and overall business instability can create environments rife for social engineering and other attacks.
With breaches now costing enterprises in the millions on average, bad actors astutely anticipate that businesses will have fewer resources, both capital and people, to bolster their security infrastructure and protect their most prized asset — their data. Add in the complex and ever-growing demands of data sovereignty laws and security/privacy regulatory compliance, and it becomes painfully obvious: If you don’t have a data solution with security, governance and lineage built-in — get one.
Let’s be clear: A robust data strategy isn’t a cybersecurity solution, but it should be a component of any company’s larger digital security apparatus. In today’s hybrid, multi-cloud, cross-jurisdictional world, any data strategy worth its weight must automate and integrate data security, privacy and governance. Relying on humans to ensure all the t’s are crossed and i’s are dotted on thousands if not millions of datasets is as unrealistic as it is irresponsible.
The next quarter or two will undoubtedly set the tone and pace for the remainder of the year. As to what that looks like macroeconomically, right now, your educated guess is likely as good as anyone else’s. Regardless of what may be ahead, a strong, streamlined data strategy will be essential for all enterprises to help weather the storm and better meet their customer needs and business objectives once calmer winds prevail.
Amit Walia is CEO of Informatica.
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