#1 - Data Solution Profit

and why it is important to calculate it

Jun 05, 2024

As part of a tech team, it's easy sometimes to forget that our primary job is creating value for our business. Technology should be an enabler or a creator of business value. The business value should always be greater than the cost required to build the solution.

Let’s repeat it. It’s a simple rule:

The value created must be higher than the cost incurred within a defined time frame.

In this newsletter, we will explore why and when it's crucial to understand the value of what we develop and its associated costs.

Data Solution Profit = Data Solution Value – Data Solution Cost

In the next newsletter, we will discuss how to calculate, and which factors impact the data solution profit.

For today we will focus on several scenarios where knowing the data solution profit is fundamental:

For personal satisfaction

Understanding the value you create with your work is critical. No one wants to spend days, months, or years working on something that feels pointless. While each of us might have a different definition of "useful," our time is our most valuable asset, and we don’t want to waste it.
Knowing we are doing something useful and giving a value of what means useful, at least for me, it is quite important. As professionals in today world, being data driven is also something we should have in our DNA and use it in our work.

For building a business case

Before agreeing to allocate resources to specific projects, companies often require a solid business case. If you want to build a data solution, you need to know its cost and its business value.
Presenting this information can help getting the project approved. This process also helps companies in prioritizing their budget effectively and we want our project to be considered a priority when it is a priority.

For recognition

Once we've gained approval for building our data solution and developed something we feel is useful, we probably would like to get some recognition.

When seeking a promotion or a raise, it's quite impactful to say you developed a data solution that cut costs of process XYZ by 30% and improved data quality by 95%, creating significant value for the company.
And this is far more compelling than simply saying you developed 12 data pipelines last year. Concrete numbers of your impact help your manager advocate for your promotion.

For building team or individual Reputation

After gaining recognition for our projects, we often aim to create even more impact. A strong reputation is a multiplier of our impact within the organization.

Imagine you're part of a data analytics team known for completing a successful project that reduced manual effort by 20% for 30 people.
This reputation can lead to more project requests, greater company focus on analytics, and ultimately, a larger impact. A bit of focus on building our reputation is critical if we want to grow in the corporate world.

I’m sure there are other cases where knowing the data solution profit of your solution is useful. If you have anything else in mind, just let me know.

That’s all for the first newsletter. In the next one, we will dive into how to calculate a data solution profit and which factors impact it.

To the next time,
Francesco