These days, we can safely assume that most business leaders are fairly tech-savvy and routinely work with business data. However, what’s challenging is that many businesses are swamped with data and left thirsting for insights. Their data is stuck in data silos, replicated, in different formats and of such terrible quality that it’s virtually unusable or untrustworthy. A change of approach is required – it’s imperative that businesses become data centric and not just data-driven or application-centric! To help you understand what it means to have a “data-centric” perspective, I will explain below. In particular, we will dive into what “data centric” is and what it is not, as well as how it varies from being “data-driven” or “application-centric.”

“We are surrounded by data, but starved for insights.”

Jay Baer

What Is A Data-Centric Business?

Data centric is about treating your data as an asset rather than as a by-product of your enterprise systems. Indeed, start thinking of your data as your most valuable business asset. Without a doubt, it will solve so many problems. Better yet, you can start having a “data centric” perspective today. You do not need any new software or technology. Indeed, by having a “data centric” mindset, you can transform your business’ automation over time to also being data centric. 

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 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 like this definition. It defines data as the primary component of business technology. Specifically, this definition tells us that technology, software applications, and automation will come and go. Conversely, our business data will never grow obsolete. Indeed, data is a permanent business asset that businesses do not need to constrain within any particular technology or software application. For a more detailed look at the challenges of dealing with data overload and the concept of running a data centric business, read my article, Being A Data Centric Business: It’s Going Beyond The Frenzy Of More Big Data And High Tech.

A Data Driven Business Is Not A Data Centric Business – Here’s Why.

Data-driven is a fairly common term, however it is not data centric. Basically, data-driven is focused on decision-making. Instead of businesses just using their “gut” instinct, they use data to make decisions. At least for most large businesses, this is a statement of the obvious. For example, if your business has a large global supply chain, how else, but without data, can you make decisions affecting your supply chain? Indeed to make decisions about supply chains, you need data about the products, the suppliers, the transportation carriers, the ports, governmental bodies, and so on.

The problem with a “data driven” only approach is it can easily overwhelm a business with data. And, this can result in unintended consequences. In particular, data driven does not prevent data silos, multiple copies of data, make your business more agile, or simplifies businesses. 

At best, “data driven” can improve decision-making, and it is usually better than “flying by the seat of your pants”. Now with a “data centric” approach, data becomes a business asset that is permanent, valuable and versatile. Indeed, it is not a byproduct or created exclusively for a particular software application. Furthermore, these aging software applications will no longer constrain your data for use in the future.  Below are definitions to distinguish the difference between data centric vs a data driven architecture.

Data Centric Vs Data Driven Architecture Definitions

“Data centric architecture refers to a system in which data is the primary and permanent asset, whereas applications change.“

“Data-driven architecture means the creation of technologies, skills, and an environment for ingesting a large amount of data.“

To sum it up, I like the two definitions above as they draw out the difference between “data centric” and “data driven”. Your data is a most valuable business asset that you do not constrain within legacy software. These definitions come from Neptune.AI blog posting, Data-Centric Approach vs Model-Centric Approach in Machine Learning. Even though this article is focused on AI, it applies to any software or technology that uses data.

Data-Driven Decision-Making: Its Enormous Impact And The Truth On Limitations

A Business Cannot Be Both Application Centric And Data Centric – Here’s Why

In the last half of the 20th century there was a software boom that enabled businesses to increase their efficiency. Especially enterprise software such as those used in supply chains enabled businesses to automate many business processes. Additionally, business software applications streamlined operations, and improved service delivery in terms of timeliness. Of course, at the same time these systems started generating a lot of business data.

“There were 5 exabytes of information created between the dawn of civilization through 2003, but that much information is now created every two days.”

Eric Schmidt

Application Centric Data Is At Best The Output, At The Worst A By-Product.

The problem, or perhaps an opportunity, was that these applications left a wasteland of data. Initially, the data was just a by-product of these software applications. The problem is that after many decades or even months for new startups, businesses are now swimming in data. Furthermore, some of this data is good and some not so good.  Now, the opportunity of having all this data is evident, but the opportunity is limited when the data is just part of a standalone software application. Worse, these software applications become obsolete fairly quickly, locking businesses and their data into a situation where they are no longer competitive. 

You Can’t Be Both Application Centric And Data Centric.

So this sums up where many large businesses are today with their application centric business approach. Now, data marts and Business Intelligence (BI)I report tools can help, but they are just a band-aid to a bigger problem. That problem being having tons of data, some relevant, tied to aging software. The result is that most businesses cannot access the data they need. Worse by not accessing this most valuable asset, businesses become limited in both operational and technical innovations that are critical to staying competitive and relevant..

“You can have all of the fancy tools, but if [your] data quality is not good, you’re nowhere.”

Veda Bawo

Now that you have a better understanding of data centric and what it is not, see my article, A Data Centric Business: The Best Way To Agility, One Truth, Simplicity, Technology Innovation, for a more detailed discussion of the benefits of a data centric business.

Click here for the benefits of a data centric approach, how it differs from data-driven, and how to balance application-centric and data-centric approaches. It’s time to re-think your business’ data strategy!

For more articles from SC Tech Insights’, see postings on data.