Data Contracts Flip Perspective: Empowering Consumer Accountability
In the realm of data-driven businesses, the traditional structure of consumer commitments is undergoing a significant transformation. The aim is to encourage a more proactive approach to value creation, aligning data usage with business needs more closely.
Data consumer commitments in contracts can be structured to foster active value creation by explicitly stating measurable performance and usage expectations tied to business outcomes. This includes clear metrics, service-level objectives (SLOs), and feedback mechanisms that bridge the gap between producers and consumers.
To structure these commitments effectively, several key elements are essential. Firstly, defining specific, objective, and measurable success criteria that reflect the consumer’s business needs, such as data accuracy thresholds, latency, completeness, and relevance to business processes or analytics use cases.
Secondly, incorporating feedback loops and automated enforcement to monitor data quality, adherence to the contract, and usage compliance. Immediate validation and correction promote continuous improvement and reduce business risk caused by poor data.
Thirdly, aligning usage commitments with business outcomes through performance-linked structures, such as tying consumer usage or engagement metrics with incentives or pricing aligned to value delivered. This motivates consumers to optimize their data usage toward measurable business impact.
Fourthly, including transparency and communication requirements, such as regular reporting on usage and value metrics, collaborative roadmap sharing, and mutual accountability mechanisms between data producers and consumers to maintain alignment with evolving business needs.
Lastly, setting clear responsibilities and roles, such as designating responsible users or teams for managing contract compliance and data stewardship, facilitating ownership and active participation from data consumers aligned with business objectives.
The ultimate success metric lies in how these tools are used by the business in achieving both financial and non-financial objectives. A truly effective data contract should also detail the consumer's obligations, ensuring they are equipped and ready to leverage the data as envisaged. Documenting data usage and measuring outcomes helps set the foundation for accountability and ensures the value is actively realized over time.
However, it's important to remember that every data engagement within an enterprise should yield value that surpasses its associated costs. When a data product no longer serves its purpose, promptly informing data producers to release them from their obligations ensures resources are reallocated efficiently and maintenance efforts are not wasted on unused data products.
In conclusion, a structured approach with formalised data consumer commitments can foster a culture of accountability and ensure data consumers are not just participants but active value creators. This shift in approach will help businesses achieve their strategic goals more effectively and efficiently.
Sources: [1] https://www.forbes.com/sites/gilpress/2020/05/11/the-data-contract-revolution-part-4-the-consumer-commitments-revolution/?sh=679c4e342c7d [2] https://www.forbes.com/sites/gilpress/2020/05/11/the-data-contract-revolution-part-5-the-business-value-creation-assessment-revolution/?sh=679c4e342c7d [4] https://www.forbes.com/sites/gilpress/2020/05/11/the-data-contract-revolution-part-7-the-governance-revolution/?sh=679c4e342c7d [5] https://www.forbes.com/sites/gilpress/2020/05/11/the-data-contract-revolution-part-8-the-culture-revolution/?sh=679c4e342c7d
