As AI systems continue to shape industries and economies, a new regulatory framework is emerging to ensure their responsible and safe deployment: the AI Act. This landmark regulation, introduced by the European Union, represents a crucial step toward governing the use of artificial intelligence (AI) across sectors. For Data and AI Governance Leads, understanding the implications of the AI Act and fostering AI literacy within their organizations will be vital. Here’s why AI literacy is no longer optional — it’s a necessity. AI Act Article 4                The European Union's Artificial Intelligence Act (AI Act) emphasizes the importance of AI literacy among organizations that develop or deploy AI systems. Specifically, Article 4 of the AI Act mandates that providers and deployers of AI systems must take measures to ensure that their staff and other individuals involved in the operation and use of AI systems   possess a sufficient level of AI literacy . This requirement takes into account the technical knowledge, experience, education, and training of these individuals, as well as the context in which the AI systems are used and the characteristics of the persons or groups affected by these systems. This provision underscores the EU's commitment to promoting responsible and ethical AI usage by ensuring that individuals involved in AI operations are adequately informed and capable of managing AI technologies effectively. Key dates: 12 July 2024: The EU published the AI Act in the Official Journal. 1 August 2024: The AI Act became law. 2 February 2025: Rules on AI literacy requirements come into effect. Enforcement and Penalties: While the AI Act does not impose specific fines solely for failing to ensure AI literacy, non-compliance with Article 4 can significantly influence the severity of enforcement actions for other violations. For instance, providing incorrect, incomplete, or misleading information about your organization’s AI practices to notified bodies or national authorities can lead to fines of up to €7,500,000 or 1% of the company’s total worldwide annual turnover, whichever is higher. This highlights the importance of accurately demonstrating the level of AI literacy within your organization when reporting to regulatory authorities.   What is AI Literacy? AI literacy  refers to the understanding of core AI concepts, potential applications, limitations, risks, and ethical considerations. It is not just about knowing how AI works technically; it encompasses an awareness of its broader societal implications, regulatory requirements, and ethical challenges. For business leaders and AI Governance Leads, AI literacy is the foundation for making informed, ethical, and compliant decisions . It includes: Understanding AI Capabilities and Limitations : Knowing what AI can and cannot do is key to setting realistic expectations and preventing misuse. Recognizing Bias and Fairness Issues : An awareness of how AI systems can unintentionally perpetuate biases, leading to unfair or discriminatory outcomes. Navigating Legal and Ethical Implications : A grasp of the regulatory landscape and the ethical frameworks guiding responsible AI use. Communicating Effectively About AI : The ability to explain AI-driven decisions, particularly in high-stakes contexts where transparency is critical.   Why AI Literacy is Critical for Compliance with the AI Act The AI Act demands a proactive, educated approach  to AI governance. Organizations must take measures to ensure that their staff and other individuals involved in the operation and use of AI systems possess a sufficient level of AI literacy. Here’s how AI literacy aligns with the regulatory requirements: 1. Risk Management and Responsible Use The AI Act’s risk-based framework requires companies to assess their AI systems for potential harm, particularly for high-risk applications like biometric identification or recruitment algorithms. AI literacy empowers governance leads to evaluate risk accurately and to implement ethical safeguards. Informed leaders can design AI strategies that align with ethical best practices, reducing the risk of legal infractions and reputational fallout. 2. Ensuring Transparency and Accountability Transparency is a cornerstone of the AI Act. High-risk AI systems must be explainable, and users should be informed when interacting with AI-driven processes. AI literacy helps leaders to promote explainability and to enhance communication. With a strong understanding of AI, leaders can clearly articulate AI processes and decisions, fulfilling legal requirements and increasing stakeholder confidence. 3. Fostering a Culture of Ethical AI Use The AI Act sets the stage for a cultural shift  toward responsible AI development and deployment. However, compliance cannot be achieved through technical measures alone; it requires an organization-wide commitment to ethical practices. By promoting AI literacy across departments, governance leads can  educate and empower teams as well as drive ethical decision-making .   How to Build AI Literacy in Your Organization Step 1.   Assessing Current AI Literacy Levels : Evaluate the existing knowledge and understanding of AI within the organization to identify gaps among employees who develop, deploy, or operate AI systems. Step 2. Developing and Implementing AI Literacy Programs : Create training programs tailored to different roles within the organization. These should cover technical aspects of AI, ethical considerations, risk management, and compliance requirements. Step 3. Considering Individual Backgrounds and Context : Tailor AI literacy initiatives to the technical knowledge, experience, education, and training of the staff, as well as the specific context in which the AI systems are used and the individuals or groups affected by these systems. Step 4.   Ensuring Continuous Education and Awareness : Maintain ongoing education efforts to keep staff updated on AI developments, regulatory changes, and best practices, fostering a culture of responsible AI usage. By implementing these measures, organizations can align with Article 4 of the AI Act, promoting responsible and informed use of AI technologies.   The AI Act marks a pivotal moment for businesses leveraging AI technologies. Compliance will require more than just technical adjustments; it demands a shift in mindset — one where AI literacy becomes a core competency  across the organization. By investing in AI education today, companies can navigate the complexities of the AI Act confidently and build a sustainable, trustworthy approach to AI innovation.

The ability to adapt to new technologies is no longer a luxury—it’s a necessity. Among these technologies, Artificial Intelligence (AI) stands out as one of the most transformative forces shaping industries across the globe. From automating routine tasks to providing deep insights through data analysis, AI has the potential to revolutionize how businesses operate. However, many organizations struggle to unlock the full value of AI, and the primary barrier isn’t the technology itself—it’s the lack of data and AI literacy within the workforce. Despite significant investments in AI, many companies fall short of becoming truly data-driven. Data leaders consistently cite AI literacy, or the lack thereof, as the number one roadblock to realizing their AI potential. Without a workforce that understands how AI works and how to integrate it into daily operations, even the most advanced technologies remain underutilized. This is why AI literacy is becoming essential. For businesses to stay competitive, it’s not just the data scientists and IT professionals who need to understand AI—it’s everyone. Ensuring that employees are equipped with a fundamental understanding of AI will unlock their ability to collaborate more effectively, make better decisions, and ultimately drive the business forward in the AI era. What is AI Literacy? AI literacy  refers to the ability to comprehend and engage with AI technologies in a way that adds value to a person’s role and to the organization. It goes beyond simply knowing the buzzwords or having a surface-level understanding of AI concepts. A truly AI-literate workforce understands how AI models work, can interpret and critically evaluate the outputs they generate, and is aware of the ethical and operational implications of these technologies. A crucial component of AI literacy is the ability to challenge AI. This means understanding how AI makes decisions, recognizing when and why it may produce biased or flawed outputs, and being able to ask the right questions about its reliability. AI-literate individuals are equipped to challenge and refine AI-driven insights, ensuring that decisions made with AI are robust, transparent, and aligned with business goals. AI literacy doesn’t require everyone to become a technical expert or data scientist. Instead, it empowers employees to use AI responsibly and effectively. For example, a marketing team might not need to build machine learning models themselves, but they should be able to use predictive analytics tools to forecast customer behavior, critically assess the assumptions behind the algorithms, and ensure that ethical standards are maintained. The Competitive Advantage of AI Literacy The organizations that invest in AI literacy are not just equipping their workforce for the present—they're preparing for the future. Those with AI-literate teams are better positioned to unlock the full potential of AI, setting themselves apart from competitors. Here’s why AI literacy offers a distinct competitive advantage: 1. Faster and More Effective AI Adoption Organizations with AI-literate employees are more agile when it comes to adopting new AI technologies. When teams understand AI’s capabilities and limitations, they are more confident in experimenting with and implementing these tools. This means quicker integration of AI into everyday processes, accelerating the organization's ability to benefit from automation, predictive insights, and enhanced decision-making. Without AI literacy, businesses often face long onboarding processes, resistance to AI adoption, and inefficient use of tools. Employees who don’t understand AI may resist its implementation, either out of fear of job displacement or due to a lack of understanding about its value. On the other hand, teams with a solid foundation in AI literacy see these tools as enablers, not threats, which allows the organization to move forward faster. 2. Better Decision-Making at All Levels AI can dramatically enhance decision-making processes by providing real-time insights, predicting trends, and automating routine tasks. However, for these benefits to be fully realized, decision-makers need to understand how to interpret AI-driven insights and balance them with human judgment. AI literacy enables leaders and employees alike to critically evaluate AI outputs, ensuring that decisions made are not only data-driven but also aligned with broader business objectives. For example, if an AI model suggests a particular market strategy, AI-literate teams can assess whether the model’s data inputs were relevant, understand the confidence intervals around its predictions, and adjust the model’s recommendations in light of their own industry knowledge. This leads to more informed and nuanced decisions, driving business outcomes that wouldn’t be possible without both AI and human expertise working together. 3. Increased Innovation and Problem-Solving AI literacy promotes a culture of innovation. When teams understand AI’s potential, they are more likely to experiment with new tools, suggest creative applications, and identify areas where AI can solve long-standing problems. AI-literate employees can see beyond the current uses of technology and imagine new possibilities, whether that’s using AI for predictive maintenance in manufacturing, personalized marketing in retail, or automated risk analysis in finance. With AI literacy, innovation is no longer confined to the data science or IT teams—it becomes a company-wide capability. Teams can collaborate across departments, bringing together diverse perspectives to drive AI initiatives that have real, transformative impact. This cross-functional collaboration can lead to the development of new products, services, or operational efficiencies that give companies a true edge over competitors. 4. Risk Mitigation and Responsible AI Use AI is a powerful tool, but it comes with risks. Misapplied AI can lead to poor decision-making, ethical concerns, and even legal liabilities. AI literacy helps mitigate these risks by ensuring that employees are aware of the potential pitfalls associated with AI—whether it’s biased data, opaque algorithms, or unintended consequences of automation. AI-literate teams can proactively address these issues. They are equipped to identify bias in datasets, question AI outputs that seem counterintuitive, and ensure that ethical considerations are taken into account in AI development and deployment. This not only reduces the risk of reputational damage or regulatory non-compliance but also ensures that AI is used in a way that aligns with the company’s values and long-term goals. 5. Talent Retention and Attraction AI literacy is not just about staying competitive externally—it’s also about retaining and attracting top talent. In a world where AI is becoming ubiquitous, employees want to work for organizations that prioritize learning and development, particularly in cutting-edge fields like AI. By investing in AI literacy programs, companies show their commitment to empowering their workforce, which in turn boosts morale and helps attract high-caliber talent. Moreover, as more industries integrate AI into their operations, the demand for AI skills will only grow. Businesses that foster AI literacy now will have a future-ready workforce capable of taking on leadership roles in AI and data science, reducing reliance on external hires and positioning the company as an industry leader. By focusing on AI literacy, organizations can not only overcome the number one roadblock to becoming data-driven, but also gain a competitive edge that positions them for long-term success. In the race to innovate and stay ahead, AI literacy isn’t just a nice-to-have—it’s essential. Businesses that invest in building this capability today will be the ones leading tomorrow’s AI-driven economy.

The interest in Artificial Intelligence (AI) has surged dramatically with the advent of Large Language Models (LLMs) such as ChatGPT, Gemini (formerly Bard), and LLaMA. These foundational models, trained on petabytes of data, present unprecedented opportunities by providing toolsets for organizations to develop their own AI models. The transformative impact of AI is undeniable, poised to reshape the competitive landscape across major industries. Organizations are now faced with the imperative to swiftly respond and adapt to this paradigm shift. However, acknowledging the immense potential of AI also entails acknowledging its profound responsibilities. Effectively governing AI is paramount to ensuring that its vast capabilities do not result in unintended consequences. But AI is not new Many organizations have accumulated substantial experience with various AI use cases over the years. Despite a continuous rise in AI investments across diverse sectors, the outcomes have often fallen short of expectations. This can be attributed to the limitations inherent in traditional AI models, which tend to be task-specific and reliant on manually crafted features. A transformative shift has occurred with the introduction of newly released foundation models—large AI models trained on a diverse range of data. These foundation models exhibit versatility, allowing them to be applied to numerous use cases with minimal additional training. This shift has not only influenced the text generation domain, as seen with ChatGPT and Gemini, but has also extended its impact to image generation, as demonstrated by DALL-E, and code generation, exemplified by GitHub Copilot. Risk associated with AI Foundation models exert significant influence on both the environment and human aspects, fundamentally shaping our world. On the environmental front, the impact is marked by high energy consumption, resource depletion, and the generation of electronic waste. Simultaneously, human challenges emerge, spanning economic shifts, issues of bias and fairness, privacy concerns, and security risks. Mitigating these risks calls for a multifaceted approach, combining technical, ethical, and regulatory measures. It is imperative for organizations, researchers, and policymakers to forge collaborative efforts in establishing guidelines and frameworks, thereby ensuring the responsible development and deployment of AI.        Risk Addressable by AI Governance Embarking on the realm of AI opens doors to a myriad of possibilities, yet it is crucial to approach it with mindfulness and control. Mishandled AI can result in significant repercussions, including biased models, security vulnerabilities, and substantial fines. Delving into the risks, a robust data and AI governance framework can effectively address: 1.      Biased Training Data : Risk: Inaccuracies and biases in the training data used for AI models, including foundation models, can result in biased outcomes, leading to unfair and discriminatory predictions. 2.      Data Privacy and Security: Risk: Improper handling of sensitive data during AI model development and deployment poses a risk to data privacy. Security breaches may lead to unauthorized access and potential misuse of sensitive information. 3.      Lack of Data Quality: Risk: Poor-quality or incomplete data can negatively impact the performance of AI models, including foundation models, leading to unreliable predictions and decision-making. 4.      Data Ownership and Control: Risk: Ambiguity around data ownership and control can lead to challenges in managing and sharing data within and outside the organization, affecting the development and deployment of AI models. 5.      Regulatory Compliance: Risk: Failure to comply with data protection and privacy regulations can result in legal consequences and damage the organization's reputation. 6.      Data Retention and Deletion: Risk: Inadequate policies for data retention and deletion can lead to the accumulation of unnecessary data, posing both privacy and security risks. 7.      Lack of Transparency: Risk: Lack of transparency in how data is collected, processed, and used for AI model training can erode trust among stakeholders and raise ethical concerns. Effectively addressing these risks requires a comprehensive and proactive approach to data and AI governance, with a focus on transparency, accountability, and adherence to ethical principles. Organizations should continuously assess and update their data and AI governance policies to adapt to evolving regulatory landscapes and technological advancements.

Business leaders today are eager to maximize the value from data. This has become a key challenge for established companies, as it helps improve operations and decision making, enhances products and services, and ultimately leads to the development of new business models. Advancements in information technology, especially in machine learning, big data and analytics, cloud computing, and Internet of Things (IoT) technologies, have further increased the importance of data for business development and innovation. There are novel opportunities for organizations to renovate their business models with big data analytics or develop new data-driven business models. These data-driven business model innovation opportunities particularly put established companies, which are expected to be sitting on tremendous amounts of data, under increasing pressure to act. But what are data-driven business models in the first place? Getting the Terms Right  A verity of terms have been proposed to describe data-driven business models (BMs), ranging from big data business models, data-infused business models, data monetization, data capitalization, and data sales, to name a few. On the raw data level, capitalization is conducted through the sales of first-, second-, and third-party data. First-party data are collected by a company and are not freely available. Second-party data are collected in collaboration with another company. Lastly, third-party data are collected by someone else. Selling these data assets is also referred to as data sales. Deriving information from first-, second-, and third-party data can lead to value generation through insights, improved decision-making, and the performance and enhancements of customer experience and value propositions. These improvements are reflected in profit increases and cost reductions. This information’s value also grows exponentially through its combination with existing knowledge. Data value realization is either accomplished by improving the prevailing BM or through the development of new BMs with data as the key resource. The value generation and capturing processes are referred to as data monetization or data-driven business model innovation. To describe data-driven BMs, we draw on business model representation frameworks. The essential structure of any business can be represented with business modeling techniques. Several modeling frameworks, varying in their characteristics and components, have been proposed in the past. Their primary purpose is to describe how an organization creates and captures value. Business modeling has gained importance as emerging technologies threaten established businesses and their traditional BMs. In order to commercialize disruptive technologies, companies face the challenge of understanding their prevailing BM. The critical components of the business and their interrelation are represented in the models, allowing to form conclusions on technology integration. Thus, BMs can be seen as a “vehicle” for innovation, helping to understand the traditional business in order to envision a new, targeted model, providing a source of competitive advantage. The business model canvas is a commonly accepted framework for representing BMs. It proposes nine components (key partners, key activities, key resources, value proposition, customer relationships, channels, customer segmentation, cost structure, revenue streams) to convey the essentials of a business. Data-driven business models rely on data as a key resource and/or have data processing as a key activity, making data essential for the value proposition. Companies can innovate their existing BM by applying more data to reach operational efficiency and new revenue streams or by developing completely new BMs by harvesting data. Some Examples  Digital native companies have been realizing data-driven BMs ever since they have been founded. Here are a few examples: Netflix analyzes its customer data to match actors, producers, and storylines to targeted customer segments. This has allowed them to produce hits like Stranger Things, The Irishman, and House of Cards. Alibaba combined its customer data platforms and was able to achieve 20% higher conversion rates and efficiency increases with an AI-enabled customer service chatbot resolving 95% of queries. PatientsLikeMe, which provides a platform to share user experiences related to illnesses and treatments, realized a data-driven BM by selling anonymized data from their social media platform to pharmaceutical companies and companies that produce medical devices. Established companies have also started to realize data-driven BMs: The pharmaceutical distributor Tamro sells customer spending insights to drug manufacturers. Capturing sales data allows Tamro to provide pharmacies information on their sales compared to their competitors. Barclays offers a service for SME companies that provides them with information about their revenue inflows and outflows and analyzed data about their payments and transactions. Customers can also compare their own data with data from similar businesses in similar locations. Vodafone sells anonymized network data to navigator producer TomTom. Vodafone has real-time, location-based data about its customers that TomTom buys to better understand how people and vehicles move in order to optimize navigation suggestions. Challenges  Many business leaders do not consider data to be synonymous with profits. Simply assuming that optimistic data gathering will prove profitable is naïve. Instead, organizations must evolve their culture, business models, operating models, and enterprise architecture (see Architecture Management for Data-Driven Business Models) in order to capitalize on data. Obstacles to data-driven BM design and realization are related to data quality, data privacy, culture, data literacy, and organizational transformation (see The Challenge of Becoming a Data-Driven Company). Since May 2018, with the advent of GDPR and its strict regulations, data privacy has become increasingly important both for companies and European citizens. This law sensitizes companies to the moral and ethical responsibility of personal data usage. Data privacy and ethical constraints might have long-term impacts on a company realizing data-driven BMs. Transforming organizations into data-driven businesses and equipping companies with the required analytical and technical capabilities could prove to be the most challenging obstacle. In order for sensitive transformational interventions to be successful, however, the prevailing roles, processes, and technologies and their interplay must be properly grasped. In particular, established companies that are expected to be sitting on tremendous amounts of data are under significant pressure to act. For established companies, the prevailing organizational structures might become a blessing or a curse. On the one hand, a large data and capability pool can be leveraged to put forward a new business model. On the other hand, the same capability pool and inflexible structures might become a bottleneck, as the required innovation level is not met (see Mobilizing Capabilities of Data-Driven Culture). Engaging business users in data conversations will be a catalyst for fostering a more data-driven culture. Assefy provides a modern data collaboration platform that connects datasets to business semantics, helping business users to find, understand, and apply data for value generating use cases. Contact us to find out more.

Maximizing the value from data by renovating existing business models or introducing new data-driven business models has become a key concern of business leaders (see What are Data-Driven Business Models?). Latest technological advancements such as cloud, internet of things, big data, and machine learning, have contributed to the rise of data-driven business models as an emerging phenomenon in the data sphere. Data-driven business models are characterized by data as a key resource, data processing as a key activity, or both. Novel opportunities appear for organizations to monetize their data. Established companies, who are expected to be resting on tremendous amounts of data, are particularly exposed to increasing pressure in this regard. These companies have been collecting data for decades, which could give them an advantage over start-ups with limited data resources. However, prevailing organizational structures (and especially the architecture) might become a bottleneck. Data is collected and stored in silos or hoarded in monolithic data lakes. With the rise of data-driven business models, many organizations have started to invest heavily in new technologies. Business units are introducing their own data and analytics solutions, creating more silos and, along with them, increasing complexity. The fragmented data and application landscape leaves confused business users behind, neither able to treat data as an asset nor to leverage it for value generation. The Potential of Enterprise Architecture   Introducing new data-driven business models requires deep intervention in the entire organizational structure. The current (as-is) architecture must be well understood and the desired target (to-be) architecture, which would apply the data-driven business model, must be carefully planned. This is where enterprise architecture comes in. Enterprise architecture has proven its potential in many IT-related projects and is deeply rooted in the information system discipline. It is a critical component for strategic planning, top management decision making, and project management. By providing tools such as metamodels, frameworks, and management methods, enterprise architecture supports transparency, building on an organization’s key components – from business, data, and application to the technology level. Furthermore, enterprise architecture helps businesses organize their architecture in a manner directed toward a common vision. The enterprise architecture management function supports the transition from the as-is to the to-be state through several intermediate architecture stages. Enterprise architecture has been successfully applied in the context of big data analytics and business model design, as it helps to achieve transparency across relevant social and technical elements and their interdependencies. Enterprise architecture can provide answers to stakeholder concerns based on models and tool support for the design and implementation of such socio-technical systems, where companies struggle to understand the existing data resources and capabilities. Similar to the support for business model design and big data analytics, enterprise architecture can be beneficial for data-driven business model innovation. Beyond that, enterprise architecture offers blueprints, reference models, frameworks, and assessment tools that are beneficial in making the as-is state transparent and developing the to-be state of data-driven business models. In order to justify huge investments in organizational transformation, as required for such models, enterprise architecture first and foremost supports the data-driven business model design phase. A good understanding of data assets and system components (and their interrelation), as well as their link to the ecosystem, are key for successful data-driven business model realization. Data Architecture for Data Assets  As highlighted above, data architecture is an essential component of an enterprise architecture. With the dawn of data fabric and data mesh concepts, new opportunities are arising to manage data as an asset by applying these emerging data architecture design patterns. For example, domain-oriented and decentralized data ownership and architecture enable federated data management and data sponsoring along business domains. Additionally, the increasing amount of produced metadata, while the actual data flows between the system, reveals automation opportunities for classifying and contextualizing data. The bottom line is that the enterprise architecture practice offers vast potentials in the context of data-driven business model design and realization. Many organizations face architecture concerns on their journey to data-driven business model realization. With the rise of data fabric and data mesh as emerging data architecture patterns, new opportunities are revealed for established companies to maximize value from their data (see Power to the Business Users with Data Mesh). Assefy applies emerging data architecture concepts and federates data management and sponsoring with related domains, providing an interface between the complex and fragmented data and application landscape to business users. Coming from the right side of the information supply chain, Assefy focuses on connecting business value to data assets. Contact us and find out how you can leverage your enterprise architecture to Assefy your data.

It has been just over a year since ChatGPT propelled generative AI into the mainstream spotlight for organizations. This has marked a crucial milestone in the advancement of readily accessible AI technologies. The introduced foundation models, which have been trained on petabytes of data, are set to revolutionize fields like text, image, audio, video, and code generation. Advancements in these out of the box available AI technologies present a paradigm shift for organizations away from the need to develop AI technologies in-house to producing high quality data. Before the historic ChatGPT debut organizations had to develop and train AI themselves. Now, the focus shifts towards data. As the technology is not the competitive advantage anymore the data to train and feed into the AI has become the most pressures resource. In this new era, the technology itself no longer serves as the primary competitive edge; instead, the data used to train and enhance AI has become the most valuable resource and differentiator. Without the right management practices, data can become a cumbersome asset rather than a valuable resource. Hence, agile concepts such as product management are increasingly applied to the domain of data, transforming how organizations handle their data assets. The Shift to Data as a Product Traditionally, data management involved handling large volumes of information in a way that was often siloed and inefficient. This approach frequently led to duplicated efforts, inconsistent data quality, and slow delivery times for data-driven projects. As businesses recognized the need for more agile data handling, the concept of treating data as a product emerged. A data product, in this context, is not just a dataset but a well-managed asset that provides value to its  consumers. It involves a reusable data asset that makes a trusted dataset or AI and analytics method accessible to authorized users. This shift is underpinned by the principles of product management, which focus on creating products that are user-centric, valuable, and high-quality. Application of Agile Principles Agile methodologies, known for their flexibility and focus on rapid delivery, are well suited to the dynamic nature of data. Here are a few ways agile concepts benefit data product management: Iterative Development: Agile promotes the idea of iterative development, where data products are built, tested, and improved in successive cycles. This allows data teams to adapt quickly to changes in business needs or data itself. User-Centric Design: Just as with any other product, data products must meet the needs of their users. Agile product management emphasizes understanding and empathizing with users, ensuring that data products are designed with the end-user in mind, thereby increasing their utility and adoption. Cross-Functional Collaboration: Agile methodologies encourage collaboration across different teams. In the context of data products, this means that data scientists, IT professionals, and business stakeholders work together to ensure that the data product meets technical standards and business objectives. Continuous Improvement: Data is dynamic, and so are the needs of its users. Agile practices support continuous monitoring and enhancement of data products, ensuring they remain relevant and valuable over time. The Benefits of Agile Data Product Management Implementing agile practices in data management can lead to several benefits along your AI journey: Increased Efficiency: Agile methods can reduce the time to deliver valuable data products, thereby speeding up decision-making processes. Improved Data Quality: Regular iterations allow for continual assessments of data quality, with adjustments made swiftly to ensure the data remains trustworthy. Enhanced Collaboration: Agile practices foster a culture of open communication and collaboration, which is essential for successful data initiatives. Conclusion As data continues to grow in volume and importance for AI, the application of agile product management principles to data handling is becoming a necessity. This approach not only enhances the efficiency and effectiveness of data management practices but also ensures that data remains a strategic asset that can drive informed decision-making and innovation. By viewing data through the lens of product management, organizations can unlock its full potential, turning data into valuable data products that serve well-defined user needs.

Introduction In today's data-driven world, organizations are inundated with vast amounts of data. This data is a valuable resource that, when harnessed effectively, can provide critical insights, inform business decisions, and drive innovation. However, managing and deriving value from data is no small task. This is where the role of the Data Product Manager comes into play. In this blog post, we will explore the pivotal role of a Data Product Manager and why they are essential in today's business landscape. Understanding the Data Product Manager Before diving into the responsibilities and significance of a Data Product Manager, it's crucial to understand what this role entails. Data product management is still a very ambiguous term in the industry. Different companies have different requirements and intentions with data product managers. There are two types of data products managers. Leveraging data science to make stronger decisions as a product manager from defining the minimum viable product to iterative design & experimentation. Role Focus : This Data Product Manager primarily focuses on the strategic use of data in the development and enhancement of various products or services offered by the organization. Example : A manufacturing company's Data Product Manager using data may be responsible for improving the product design by analyzing customer behavior data. Key Emphasis:  The focus here is on enhancing existing products through the strategic use of data. Building data products. Role Focus : This Data Product Manager primarily focuses on the development, maintenance, and optimization of data-related products that the organization provides, such as dashboards, analytics tools, reporting systems, data platforms to enable data scientists & analysts. Example : A financial services company's Data Product Manager producing data products may be responsible for creating and maintaining a financial data analytics platform used by internal teams and clients. Key Emphasis : The focus here is on creating and managing reusable data-centric products and tools, making data accessible, and ensuring data quality and security.   While both roles involve the management of data in different ways, the Data Product Manager using data is more concerned with the strategic application of data to improve existing products, whereas the Data Product Manager producing data products is primarily responsible for creating and maintaining data-specific tools and products that enable data-driven decision-making within the organization. The distinction is essential in recognizing that these roles have different core objectives and responsibilities within the context of data management and product development. In this blog post, we will focus on the Data Product Manager building data products.   Responsibilities of a Data Product Manager Defining the Data Product Strategy : One of the primary responsibilities of a Data Product Manager is to establish and execute a data product strategy. This strategy encompasses identifying the data needs of the organization, setting objectives, and aligning data initiatives with the broader business goals. Data Collection and Integration : Data comes from a multitude of sources, and it often exists in different formats. Data Product Managers must oversee the collection and integration of this data into a unified and accessible format. This involves working closely with data engineers and data scientists. Product Development : Data product managers work to build or enhance data-related tools and products. They collaborate with cross-functional teams to design user-friendly interfaces, incorporate advanced analytics, and ensure that the product meets the needs of the organization. Data Governance : Data quality, privacy, and security are of paramount importance. Data Product Managers establish and enforce data governance policies to ensure that data is accurate, compliant with regulations, and secure from breaches. User Engagement : Data products are only valuable if they are used effectively. Data Product Managers work to engage users, gather feedback, and make continuous improvements to enhance the user experience. Data Monetization : In some organizations, data can be a source of revenue. Data Product Managers explore opportunities to monetize data, such as selling data to external parties or creating data-driven products for customers. The Significance of Data Product Managers Bridge Between Business and Technology : Data Product Managers play a crucial role in bridging the gap between business stakeholders and technology teams. They translate business requirements into technical specifications and ensure that the resulting data products align with organizational objectives. Maximizing Data Value : Without effective data management, data remains underutilized. Data Product Managers help maximize the value of data by creating products that provide actionable insights, leading to better decision-making. Fostering Data-Driven Culture : Data Product Managers also contribute to fostering a data-driven culture within the organization. They educate teams on the importance of data, encourage data literacy, and promote the use of data in day-to-day operations. Adapting to Market Changes : In a rapidly evolving business landscape, data products need to adapt to changes in technology and market conditions. Data Product Managers stay updated on industry trends and make necessary adjustments to keep data products relevant and competitive. Risk Mitigation : Effective data governance, a key responsibility of Data Product Managers, helps mitigate risks associated with data breaches, non-compliance, and data inaccuracies. This is vital in an era of increasing data regulations and security threats. Innovation and Competitive Advantage : Data can be a source of innovation and competitive advantage. Data Product Managers identify opportunities to leverage data for innovation, which can lead to breakthrough products or services. Conclusion In today's data-centric world, the role of a Data Product Manager is more critical than ever. These professionals are responsible for transforming raw data into actionable insights and products, thus enabling organizations to make informed decisions, foster innovation, and remain competitive in their respective industries. Their ability to bridge the gap between business and technology, maximize data value, and ensure data quality and security makes them indispensable in any data-driven organization. As data continues to play a central role in the success of businesses, the Data Product Manager's significance will only grow, making them a pivotal role in the modern corporate landscape.

To unlock the full potential of data, organizations are looking to apply product management practices to make their data assets consumable. These organizations aim to increase the utilization of high-quality (trusted) data sets and the methods of analyzing them. The idea behind managing data as a product is to generate more value from data while ensuring a high level of sustainability through efficient and effective product design and the reuse of production facilities. This entails the development of more compelling data products with reusable patterns. Organizations typically apply either a gradual or big-bang data strategy. In a gradual approach, individual teams build up their data and technology in isolation, which results in duplicate effort. In a big-bang approach, the data and technology architecture are built more broadly but are not aligned to specific use case needs. Applying product thinking  can help in creating reusable data assets while building sustainable production facilities. Data Product Definition A data product is a reusable data asset that makes a trusted data set or AI and analytics method accessible to any authorized data consumer. A data product comprises one or more digital assets or services that support transactions between data product owners and data consumers, as well as the ongoing consumption of the assets. The transactions are controlled and scalable. Data products can vary in terms of combination of assets and digital format used. They can be static or updating and of any size or volume. Some data products incorporate AI and analytics while others do not; thus, some organizations use two terms: data products (data sets suitable for reuse) and analytics products (which incorporate analytics or AI methods to analyze the data). Our own definition of data products includes both data and analytics/AI, but if an organization is clear on its terminology there should be no confusion. Examples Some examples of data products are data sets (tables, columns, views), reports, dashboards, data streams, data feeds, and APIs. As noted above, data products may include code or data models, or AI or analytics models that can be embedded into consumers’ workflows.   Benefits of Data Products The aim of a data product is to reduce the time to value and cost of ownership for the data consumer, while providing the data product owner with control, auditability, and ease of receiving feedback. Organizations involved in data product management are able to build high-quality, democratized data assets, which results in improved efficiency and fosters collaboration. Teams that use data products spend less time searching for data, ensuring data quality, building new data pipelines, and making decisions. These efficiencies become significant when added up across an organization’s data ecosystem and life cycle. Additionally, data products speed up time to insight because they can be reused and repurposed. The overall effect is to increase trust in an organization’s data. Data Product Characteristics A recent Forbes article by Sanjeev Mohan adroitly defined 5 characteristics of data products (see below). 1. Discoverable One goal of data products should be reusability. For example, if an organization has invested to develop a cross-functional customer-360 data product, then it should be leveraged by various departments. For this to happen, products need to be stored in a registry with adequate metadata description so that users can easily search. Data catalogs have been used to link technical and business metadata while providing capabilities like lineage and integration with data quality, security and BI tools. As data catalogs are a single pane-of-glass to discover data, they should also be extended to include data products. 2. Quality There is no bigger kiss of death to the adoption of data products than the loss of trust in the information’s veracity. As a data product collates data from various sources to provide a value-add, domain-driven decentralized data quality rises as a key data product consideration. The data team must invest in modern data quality approaches to detect and fix anomalies before productionalizing data products. Data quality should be treated as a business initiative with its primary focus on context, instead of technical dimensions. 3. Secure Self-service analytics adoption requires security across two dimensions: dynamic access and authorization to only the right people, and ensuring adherence to data privacy standards, such as HIPAA and GDPR for sensitive, personally identifiable information (PII). The principles I described in a previous data security modernization article also apply to data products. Data security products control access and allow different consumers to see different results from the same data product because they enforce specific security policies to protect sensitive data and meet data sovereignty laws. 4. Observability Unlike software applications, data constantly changes. These changes emanate from various sources and SaaS applications used to build the data products with no warning. These “anomalies” may pertain to changes in schema, late and out-of-order arriving data or data entry errors. In addition, there may be breakdowns in the pipelines and infrastructure that may cause some tasks to fail and go undetected for a long time. As a result, it can be helpful to invest in data observability tools. Their capabilities can include automated and proactive discovery of anomalies, root cause analysis, monitoring, notifications and recommendations to fix anomalies. The end result is higher reliability of data products and expedited remediation of errors. 5. Operations Good data skills are hard to find and architectures are becoming ever more complex. Mature organizations should adopt a factory-style assembly line for building and deploying data products to increase agility of decision-making. DataOps has evolved as the necessary capability to deliver efficient, agile data engineering. Its many features include automation, low/no-code development, continuous integration, testing and deployment. The end goal of DataOps tools should be to speed up development of reliable data products. Recommendations for Data Product Management 1. Develop empathy for your data customer – understanding customer needs is essential for introducing compelling data products. Data must be fit for purpose and meet quality constraints to realize the intended use cases. The business context and customer (data user) needs must be well understood to derive quality requirements. Dimensions for data quality are accuracy, completeness, timeliness, consistency, integrity, reliability, uniqueness, and accessibility. For example, while a data set may meet the requirements for a business use case related to shipping, because it contains required location information in the form of a postal address, it may not be appropriate for use cases requiring more precise information in the form of customer geographic position. Developing empathy for the data user and analyzing the use case allows the definition of fitness for an intended purpose. 2. Allow data product customization – Empowering customer to give their flavor to the final product is common for products such as cars and trending for customization of sneakers. Similarly, data consumers should have flexibility in the design of the final product to make data fit their specific needs. For example, a data set should be applicable to multiple use cases and with this compatible to a variety of end systems such as business applications, advanced analytics, reporting or external sharing. Additionally the final analysis of the data set may vary based on business context and use case.       3. Design sustainable data products – Sustainability is more relevant than ever and it should be for data products too. Each product has a design that determines its functionalities, performance and cost. For data products the production and maintenance efforts are decisive for efficiency and effectiveness. For example, a highly customized data set that is only fits one use case while requiring high maintenance (cost exceeding value of output) would need a redesign. Levers could be to make the data product applicable to more use cases (and end systems see above) or to find efficiencies in the data production and maintenance process. 4. Leverage data product families – Successful fast moving consumer goods companies demonstrate the elevation through product variations e.g. if Coke doesn’t server your need, take Sprit, Fanta or Mezzo Mix. Similarly, data products should evolve to product families. If there is a certain demand for customer sales data, a variety of sub data sets, reports and insights could be offered under this product segment. Other product families could be created along employees, product lines/service lines, branches, and vendors to name a few. 5. Reuse production facilities and processes – Data products have (like other products) the ability to evolve to product families and with that they offer a wealth of synergies. Facilities and processes that have been established to develop the data product can be reused producing the entire product family. Finding the right balance of abstraction from specific products to create a tool set of composable units is essential. For example, while the process and facilities for capturing, ingesting and cleansing data is the same for a product family, the retrieval, distribution and presentation may very for each specific product. The analytics models are developed and can be adjusted with minor effort to cover additional use cases. 6. Manage the data productization process – to ensure high quality products it is important to have a clearly defined production process with dedicated roles. The data product manager is an emerging role in the data and analytics domain. Data product managers need the ability to manage cross functional teams for the development and deployment of data products. They need some technical skills to design the data production process and business skills to communicate effectively with business leaders. A recent Harvard Business Review Article addresses this topic. Beyond the dedicated roles it requires funding, best practices, performance tracking and quality assurance. 7. Continuously enhance data products – Do not ignore the fact that data products have an entire life cycle too. Like other products, data products undergo several life cycle stages (introduction, growth, maturity, decline). Constantly enhance the data product according to its stage and deploy regular updates. For digital products, agile methodologies emphasize the importance of rapid development of first (minimum viable) products to test their acceptance by customers and to constantly enhance with new versions. These learnings should be applied to data products as well.  Fostering Data Product Collaboration The purpose of managing data as a product is to connect the data provider and consumers by making data findable, understandable and accessible. First and foremost, the ambition should be to foster collaboration and establish a data-driven culture. A data product collaboration platform like Braightup cultivate data as an asset; allow data collaboration; and make data products findable, accessible, and understandable. The core components of a data product collaboration platform incorporates a data inventory for data governance and metadata management, as well as an access layer via the storefront, exposing data products and connecting people.

Data have traditionally been perceived as crucial to business operations, strategic decision making, and new business development. The terms under which data have been investigated have varied in recent decades, and range from business intelligence, business analytics, and big data to big data and analytics. But while the mission of maximizing value from data may remain steady, the particulars change. Today, the biggest barrier to becoming more data-driven is company culture (see The Challenge of Becoming a Data-Driven Company). Building a data-driven culture requires deep interventions into the organization’s capabilities. Mindshift changes as well as greater knowledge and skills are required to become truly data driven. In a data-driven organization, everyone owns data. But there are challenges to overcome to reach that goal. In the following, we describe how companies can get there. Blessing and Curse of Prevailing Structures For established companies, the prevailing organizational structures are either a blessing or a curse. On the one hand, a great data and capability pool can be leveraged to put forward new data monetization initiatives. On the other hand, the same capability pool and inflexible structures might become a bottleneck, as the required innovation level is not met. Unlike digital-native companies—such as Google, Netflix or Facebook—traditional companies find it challenging to maximize value from data. The former type of company has data value realization at its core, which paves the way for introducing data-driven business models (see What are Data-Driven Business Models?), including sales of advertising space (Facebook) or new insurance services (Amazon and Berkshire Hathaway). In traditional companies, introducing new data monetization initiatives implies organizational transformation and capability mobilization. Deep interventions into the entire organizational structures are required. Established companies face challenges in understanding existing data resources and mobilizing capabilities from different sources. Capability mobilization comprises internal company capability-building as well as the orchestration of external capabilities for value creation and capture. Developing strategies for data monetization when there is a scarcity of highly skilled resources, such as data scientists and full-stack developers, has become a key concern of executives (see Power to the Business Users with Data Mesh). In particular, enabling seamless collaboration between business and IT while fostering innovative working methods is a tremendous challenge. Establishing the required structural, cultural, and procedural conditions for data monetization initiatives to thrive in the context of prevailing organizational structures and scarce resources requires a gradual development of business model components and an understanding of the data from analytical and technical standpoints (see Architecture Management for Data-Driven Business Models). Here are five practical recommendations to overcome the challenges of prevailing structures. 1. Treat Data as an Asset Data monetization initiatives require an understanding of data as an asset. Data quality and reliability are crucial to the value proposition. Data privacy and ethical constraints might have long-term impacts on the company and it is vital to assess them. For data monetization initiatives, two perspectives on data should be considered. One, data processing within data-driven business models should be described via business-model frameworks and use cases with a high abstraction level. Detailed views on the data and their processing should be provided from an information system standpoint. This includes informational entities and how they are used, created, captured, transmitted, stored, retrieved, manipulated, updated, displayed, and/or deleted by processes and activities within the data monetization initiatives. The internal perspective answers the questions: What data is required? and How is it processed for the value proposition? Two, data is an asset used as an input resource for data monetization initiatives. Regarding data as an input resource for data monetization initiatives makes their harvesting crucial. Sourcing data for monetization internally necessitates the organizational building of a data foundation for data monetization initiatives. This includes data governance and data management procedures, regulations, and policies. A reliable data foundation is essential for data monetization initiatives. The effort required in laying this foundation should not be underestimated. Establishing standardized data management and governance procedures can be a transformation in and of itself. 2. Apply a Start-up Way of Working In order to deal with the inflexibility of the existing structures and allow the data monetization initiatives to unfold, a “start-up” way of operating is recommended. If the established company takes such an approach in combination with recommendation 1, it can benefit from the wealth of data collected over decades and other resources while being able to move to new technology at the required pace. These synergies allow the established company to outperform the innovator. In terms of capability mobilization, the sourcing efforts must be broadly conducted beyond the internally available resources, especially when establishing a new business model. Role descriptions for analytical capabilities to realize data monetization initiatives should be defined independently of an internal view of prevailing resources. Matching the demand with the available capabilities should be a subsequent step. Additionally, one core team with end-to-end responsibility should be appointed. 3. Establish an Agile Mindset Capability mobilization in data monetization initiatives should be conducted with an iterative/agile mindset. In this context, an agile mindset refers to project management techniques that are applied to endeavors with blurry requirements. This interpretation of agility contrasts with traditional project management in software development, which is characterized by clear outcomes, and time and budget constraints. The teams working on data monetization initiatives need to embrace failure and learn quickly while moving forward. As the requirements are unclear, an iterative requirement selection and prioritization approach is required. Without clear outcomes and no defined requirements, big data analytics must be seen as a cost of doing business. Data monetization endeavors are long-term initiatives; traditional management techniques may not be fruitful. 4. Foster a Central Decentralization Establishing an agile and start-up way of working requires flat hierarchies and autonomous team setups. For data monetization initiatives, independent teams with end-to-end responsibility should mobilize capabilities along with the key enablers, with a central unit (value realization office) coordinating the decentralization-related work. The value realization office ensures senior management engagement with regular reports, progress tracking, and decision points. Additionally, it coordinates the allocation of financial resources for the planned endeavor. Effective financing is a crucial component of data monetization initiatives. In order to ensure sufficient funds, the procedure for data monetization initiatives must be continuously cost/effort driven. Ideally, the funding is structured in a staged approach, similar to start-up funding rounds. 5. Prioritize and Pipeline Business Models / Use Cases Data monetization initiatives confer a high risk for established companies, as they require capability building in various domains with unclear returns. Implementation requirements are indistinct, and the business impact difficult to estimate. Analytical capabilities must be established to understand the data and technical capabilities for their processing. In order to prevent falling into the “hype trap” of data monetization initiatives, it is vital to keep a value-driven mindset through the endeavor. Within the ideation phase of data monetization initiatives, a multitude of business model ideas / use cases should be developed. Each option promises returns and demands capability mobilization. Sequencing the business model ideas / use case for testing and realization is crucial. An exploratory approach involving iterations of testing, prototyping, and, ultimately, implementing, is recommended. Contact us to find out how Assefy can help your organization to become more data-driven. FacebookTwitterPinterestLinkedInCompartir