Many businesses find themselves drowning in data yet left thirsting for genuine insights. Despite being tech-savvy and frequently working with data, business leaders still struggle to fully harness this wealth of information. Indeed, their data is stuck in data silos, duplicated, jammed into different formats and of such terrible quality that it’s virtually unusable, and definitely untrustworthy. A change of approach is required. Businesses need to pivot towards a data centric approach as opposed to merely being data-driven or focused on applications. In this article, I’ll explain the concept of a “data-centric” mindset – clarifying what it encompasses and what it doesn’t, while also contrasting it with such catchphrases as “data-driven” or “application-centric.”
“We are surrounded by data, but starved for insights.”
Jay Baer
1. What Is A Data-Centric Business?
A data-centric business begins with a corporate mindset that values data as a crucial asset, not just a by-product of enterprise systems. Indeed, some businesses are starting to realize that their data is a strategic asset to nurture, resulting in sharper Insights and “fuel” that powers data-intensive technology such as AI. On the other hand, if a company continues to center only on their enterprise applications, it won’t realize these benefits. What’s more, businesses can start realizing these “data centric” advantages today without extra software or technology investments.
But, before we start talking about the benefits of data centric, let’s start with a data centric definition. And then we can discuss what data centric is and is not.
Data Centric Definition
“Data centric refers to an architecture where data is the primary and permanent asset, and applications come and go. In the data centric architecture, the data model precedes the implementation of any given application and will be around and valid long after it is gone.”
TDAN, The Data-Centric Revolution: Data-Centric vs. Data-Driven
I appreciate this definition of data-centric, which emphasizes that data is the core component of business information technology. Moreover, it highlights that while technology and software applications may evolve or become obsolete, business data remains a valuable and enduring asset. Also by adopting a data-centric approach, businesses can ensure that their data is not constrained by specific technologies or applications, allowing for greater flexibility and adaptability.
For a more detailed look at the concept of operating a data centric business, see my article, Being A Data Centric Business: It’s Going Beyond The Frenzy Of More Big Data And High Tech.
2. A Data Driven Business Is Not A Data Centric Business – Here’s Why.
The term “data-driven” gets thrown around a lot, but let’s be real — it’s kind of moot these days. With every business already wired into computers and smartphones, relying on data isn’t optional; it’s just how things work. The real challenge isn’t about having data, but about how we use data. To make it clear that “data-centric” and “data-driven” are two completely different concepts, I’ll explain the distinctions below.
a. A Data-Driven Approach Creates Data Overload and Data Silos.
First, a “data-driven” approach can be counterproductive if not balanced properly, as it can lead to data overload and unintended consequences. Also, this type of mentality can result in the creation of data silos and much data duplication. As a result, businesses become more rigid, complicated, and overwhelmed with data.
b. Data as a Business Asset, Not a By-Product.
At best, a “data driven” approach to decision-making is better than “flying by the seat of your pants”. On the other hand, adopting a “data centric” methodology elevates data to the rank of a critical business asset, characterized by permanence, value, and adaptability. More importantly, data, in this perspective, doesn’t emerge as an incidental byproduct or as something produced solely for specific software applications. Indeed, by your business embracing a data centric strategy, you ensure that your data remains free from the constraints of outdated software applications, allowing you to harness its full potential.
“We live in a world where there is more and more information, and less and less meaning.”
Jean Baudrillard
3. A Business Cannot Be Both Application Centric And Data Centric – Here’s Why.
Without a doubt, the 20th-century software boom significantly boosted business efficiency by automating processes and streamlining operations. This was particularly true in the supply chains and manufacturing sectors. However, this application-centric approach that drove this efficiency continues to have a major flaw: it treats data as a byproduct, used once and then forgotten. As a result, despite these systems generating vast amounts of data, this software-first approach yields few insights. So, let’s look in more detail why businesses will need to stop being application-centric, to reap the benefits of being data-centric.
a. Enterprise Systems Designed for Processing Transactions, Not Data Insights.
Enterprise systems do what they are designed to do. Namely, they are a system of record for processing business transactions. Within their functional silos, these systems are not designed for generating innovative insights, nor automatically prescribing how to adapt to new business conditions. Thus, when attempting to draw insights from these systems’ data by-products, especially multiple systems, it is like a data wasteland. Worse for day-to-day decision-making, the result is information overload. To top it off, these software applications become obsolete fairly quickly, hobbling businesses and locking up their data. As a result, businesses are no longer competitive. For more details, see my article, Agile Supply Chain Decision-Making: First You Need to Know The Truth About Enterprise Software.
b. You Can’t Be Both Application Centric And Data Centric.
In summary, many companies today employ an “application-centric” business strategy. Although data marts and business intelligence (BI) reporting tools offer assistance, they merely serve as a stop-gap solution to a larger issue. That issue is that businesses have tons of data, much of it relevant, locked in outdated transactional systems. Consequently, many businesses struggle to access their data, which limits them from innovating, both operationally and technically. Hence to maintaining competitiveness and relevance, we need to transition from being application-centric to data-centric
“You can have all of the fancy tools, but if [your] data quality is not good, you’re nowhere.”
Veda Bawo
More References.
- To further explore the benefits of a data-centric approach, I recommend reading my article, A Data Centric Business: The Best Way To Agility, One Truth, Simplicity, Technology Innovation. This article provides a detailed discussion on adopting a data-centric approach and offers valuable tips for implementation.
- If you’re convinced that a data-centric strategy is right for your business, my article, A Data-Centric Business Strategy Checklist: The Way To Energize A Digital Enterprise To Be More Agile, Bold, And Simplified, offers a practical checklist to help you get started.
Lastly, if you are in the supply chain industry and need help to implement a data-centric strategy, please contact me to discuss next steps. I have implemented 100s of tech pilot projects and innovative solutions across the supply chain as well as all transportation modes. I specialize in proof-of-concepts (POC) for emerging technologies and data-centric software development methods. To reach me, click here to access my contact form or you can find me on LinkedIn.
For more from SC Tech Insights’, see the latest articles on Data Analytics.
Greetings! As a supply chain tech advisor with 30+ years of hands-on experience, I take great pleasure in providing actionable insights and solutions to industry leaders. My focus is on supply chains leveraging emerging LogTech. I zero in on tech opportunities and those critical issues that are solvable, but not well addressed, offering industry executives clear paths to resolution. I have a wide range of experience to include successfully leading the development of 100s of innovative software solutions across supply chains and delivering business intelligence (BI) solutions to 1,000s of shippers. Click here for more info.