Do your data due diligence
Holger Harreis
Senior Partner, Düsseldorf
In 2022, we saw a surge of companies trying to create exciting use cases with AI. But what came through over and over was that, without good data, good AI was not possible. Small-scale minimal viable products (MVPs) that looked promising sputtered when companies tried to scale them and found their data management practices and architecture were insufficient.
With some of those lessons learned, companies will need to thread the needle in 2023 by investing in developing their data foundations, in particular the operating model, new approaches such as data products and DataOps, and also data architecture and technology. But they need to do it in a way that takes two critical factors into consideration.
The first is they need to scale for the business. Often companies think in terms of building data solutions for specific use cases, without considering other similar cases. This chokes off the scaling effort and hampers a company’s ability to build real value for the business. For this reason, developing a few data products in 2023 that meet the most high-value use cases for the business should be an important focus. But they should have scalability built in right from the start. When well developed and supported, data products can deliver new business use cases as much as 90 percent faster, while the total cost of ownership, including technology, development, and maintenance costs, can decline by 30 percent. Practically minded companies should consider adding about 10 to 20 percent on top of data development costs to build in scale capabilities (such as APIs, module code blocks, and standardized coding).
The second factor is that companies will need to build these foundations by sequencing initiatives and use cases to create value quickly, especially given the increasingly constrictive economic situation. In fact, if you’re not starting to generate value from your data initiatives in less than six months, something is wrong. Focus on those initiatives that create near-term value while also establishing a robust foundation for
future development.