How to boost your budget and spend it smarter

Making a better case for investing in data

Last week was meant to start with a long-planned meeting about a new project. But it was cancelled.

Why?

Simply that budgets had been reviewed for 2023 and the data one had been slashed.

This is not a unique situation and given that data leaders have generally found it hard to come up with Return on Investment (RoI) figure for their projects, it is something that may well be happening to you, your team or your organisation.

Quick recap - firms have to spend money to generate money; they need to ensure that their spend drives a worthwhile benefit; and that they are spending the most in the areas that give the most return.

Let's say that the marketing team can say, with a high level of confidence, that spending £100,000 advertising in a certain newspaper will bring in an additional £250,000 in revenue.

Meanwhile, the data team are trying to come up with an RoI figure for spending £100,000 on data quality software.

If you were the CFO, which would you fund? And which would you cut, when savings are needed?

How are we, as data people, going to get better at this?

I think the key is that we really need to understand the business benefits.

Let's go with the example that you think that the business should invest in Data Quality software. Why?

If your answer is because it's a foundational step to operating the business better then yes, you have a good point, but it's a tough sell when firms are actively looking to cut costs.

If your answer is "to have better quality data" or "to have fewer errors" then ask yourself "why" again.

• Is it because revenue will increase?

• Is it because costs will decrease?

• Is it because you can mitigate some risk which has a significant impact?

Let's say that it's because costs will decrease. Why is that?

Perhaps it's because reducing errors in "delivery address" leads to a saving in delivery costs, because more items are delivered in less time.

How much might that represent in cash?

Additionally, there could be a reduction in lost items. Let's say that a product was delivered to the wrong address and the recipient didn't return it. Now you need to provide a replacement item for the purchaser and send it to them as well.

Now we have a real business impact.

But you still have to put numbers to it. Don't do that yourself.

If you do, then the people who work in that area (in this example, the delivery team) will be only too keen to find flaws in your estimates.

So engage them. The delivery team will likely have their own KPIs around failed deliveries and delivery cost, so get them to explain this to you and, together, you can now establish if there really is a business case.

Now you can go to your budget meetings with confidence that you are presenting the case for data management in the language of the business.

If you have any examples of this from your own work, I'd love to hear about them. Hit reply and let me know.

Recording now available - How to choose a data solution and get it procured

I really enjoyed recording this session with Daniel Abda, though I need to change my webcam settings next time as it looks like we are sitting miles away from each other!

The whole 50 minute video is up on my new @datazed YouTube channel and we've also posted a couple of clips onto LinkedIn

• Daniel has chosen our discussion about how to run a procurement process when you don't have a procurement team

• I have chosen an excerpt about the Total Cost of Ownership (TCO) where we discuss how it's not all about the headline cost.

If you have any thoughts about our sessions and webinars, let me know in the feedback form.

Have you ever considered becoming an Associate of Datazed?

Maybe you are a contractor or independent consultant looking for more work.

Perhaps you are looking for a perm role but would like to deliver some projects whilst you are in the job hunt.

It could even be that you are retired and would like some occasional work.

We focus on Data Governance and Data Quality (hopefully that is obvious from reading these mails!) and want to work with people who have proven experience of successful delivery.

Check out the video and if this could work for you, get in touch.

Have a wonderful week,

Charles