I am sure you’ve come across many 2016 statistics on Data and Analytics as I have. After all, why bother collecting data that won’t help you achieve your business goals? Based on my experience helping companies develop their data strategies, I share my seven components every data strategy … Two important features underpin those competencies: a clear strategy for how to use data and analytics to compete and the deployment of the right technology architecture and capabilities. A data strategy has become a vital tool every organization needs. Unaddressed, the situation is likely to grow worse rather than better, as data volumes increase at an accelerating pace. If you’re a small business or start-up, you’re probably reading articles about companies using data science, data analytics, and machine learning to increase their profits and reduce their costs. Once you have defined the ideal data, look inside the organisation to see what data you already have. The key is to separate the statistics experts and software developers from the managers who use the data-driven insights. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. Define what it is you want to achieve and then think about the big unanswered questions you need to answer to deliver that strategy. Dominic Barton, based in McKinsey’s London office, is the firm’s global managing director. Such problems often arise because of a mismatch between an organization’s existing culture and capabilities and emerging tactics to exploit analytics successfully. 3. Managers also need to get creative about the potential of external and new sources of data. Consider the example of a consulting team helping a large bank to develop a data strategy. David Court, based in the Dallas office, leads the firm’s advanced-analytics practice. 5. data strategy. The lead concern senior executives express to us is that their managers don’t understand or trust big data–based models and, consequently, don’t use them. Then look outside and establish what data you could have access to. One of the core elements of data analytics that organizations struggle with today is data governance. A data strategy is a common reference of methods, services, architectures, usage patterns and procedures for acquiring, integrating, storing, securing, managing, monitoring, analyzing, consuming and operationalizing data. How To Develop A Data Strategy � With Handy Template. Flip the odds. “Those are the reasons to launch a data strategy, and integrating new data sources and using the knowledge effectively will get results,” Honohan said. 1. With the right strategy and some cool tools , useful data can be collected effortlessly, and presented in an easy to understand way so that you can actually use them to make better decisions. Traditional data collection and analysis is one thing – like point of sale transactions, website clicks, etc. This is the step where you can start to think about how you can leverage Big Data to outline a business strategy that will help your enterprise thrive. You also need to consider whether interactivity is a requirement, i.e. Once you’re clear about your information needs and the data required, you need to define your analytics requirements, i.e. Existing IT architectures may prevent the integration of siloed information, and managing unstructured data often remains beyond traditional IT capabilities. If that happens, simply revisit your data strategy, re-evaluating each of the points below in turn. “Those are the reasons to launch a data strategy, and integrating new data sources and using the knowledge effectively will get results,” Honohan said. The second is using data to transform your day-to-day business operations. I’d like to use couple of statistics from IDG’s Enterprise 2016 Data & Analytics Research to start this article. Data Strategy Session. However, business leaders can address short-term big-data needs by working with CIOs to prioritize requirements. Please try again later. Unlike other approaches we’ve seen, ours requires companies to make considered trade-offs between “defensive” and “offensive” uses of data and between control and flexibility in its use, as we describe below. Adult learners, for instance, often benefit from a “field and forum” approach, in which they participate in real-world, analytics-based workplace decisions that allow them to learn by doing. The ability to see what was previously invisible improves operations, customer experiences, and strategy. Making good use of data visualisation techniques and taking pains to highlight and display key information in a user-friendly way will help ensure that your data gets put to good use. Companies should repeatedly ask, “What’s the least complex model that would improve our performance?”. Data is useless if the key insights from that data aren’t presented to the right people in the right way, in order to help decision making. I find it a simple and intuitive method for creating a data strategy, and one that engages the key decision makers in an organisation – I hope you find it helpful, too. Please use UP and DOWN arrow keys to review autocomplete results. How To Define A Data Use Case � With Handy Template, Why Every Business Needs A Data And Analytics Strategy. The Meeting 5. Data-driven organizations don’t draw a line between their business and IT strategy. Data are essential, but performance improvements and competitive advantage arise from analytics models that allow managers to predict and optimize outcomes. Optimize and Evaluate Data The actual work of devising a data driven marketing strategy begins at the phase of data evaluation and optimization. How will I report and present insights? tab. Our flagship business publication has been defining and informing the senior-management agenda since 1964. What data do I need to answer my questions? Learn more about cookies, Opens in new They have a comprehensive data strategy that sits squarely in the middle—one linking key initiatives and data, which addresses business goals, objectives, and your company mission, and doesn’t treat data as a by-product. Social media generates terabytes of nontraditional, unstructured data in the form of conversations, photos, and video. Should it be supplemented with cloud solutions? Follow-up 6. Add to that the streams of data flowing in from sensors, monitored processes, and external sources ranging from local demographics to weather forecasts. Although information on enterprise data management is abundant, much of it is t… You need a data strategy which develops over time in the same way as the business or IT plan does. Importantly, you should also identify training and development needs within the company and recognise where you might need external help. Almost counterintuitively, there has never been a better moment to think about creating … We use cookies essential for this site to function well. Like any action plan, this will include key milestones, participants and responsibilities. I recently worked with one of the world’s largest retailers and, after my session with the leadership group, their CEO went to see his data team and told them to stop building the biggest database in the world and instead create the smallest database that helps the company to answer their most important questions. In this age of big data it is even more important to think small. Draw on polls, census data, and customer feedback surveys to establish the demographics of your consumers. The bank was already successful. What software and hardware do I need? He has authored 16 best-selling books, is a frequent contributor to the World Economic Forum and writes a regular column for Forbes. Is your current data storage technology right? Select topics and stay current with our latest insights, Three keys to building a data-driven strategy. Web, SEO & Social Media by 123 Internet Group. As more companies learn the core skills of using big data, building superior capabilities will become a decisive competitive asset. You may find that your data points to interesting new questions that you want to explore or leads to modifications to your existing data strategy. The MIT CISR Data Board provides the following data strategy definition: “a central, integrated concept that articulates how data will enable and inspire business strategy.” A company’s data strategy sets the foundation for everything it does related to data. Third, and most critical, management must possess the muscle to transform the organization so that the data and models actually yield better decisions. Strategy 4 Ways To Build A Data Infrastructure To Inform Business Decisions All data is not created equal. Enterprise Data Strategy is the comprehensive vision and actionable foundation for an organization’s ability to harness data-related or data-dependent capability. People create and sustain change. A data strategy is defined as the strategy around the collection, storage and usage of a data, in a way that data can serve not only the purpose behind the selling point a startup, but also open up additional potential monetisation avenues in the future. Something went wrong. The universe of data and modeling has changed vastly over the past few years. What current analytic and reporting capabilities do you have and what do you need to get? By necessity, terabytes of data and sophisticated modeling are required to sharpen marketing, risk management, and operations. 4. Digital upends old models. 6. Try to account for all applications of Big Data: predictive analysis, cognitive analytics, and prescriptive analytics, these will … Start A Data Recovery Strategy Now. Build a business strategy that incorporates big data. In short, work out what it is you need to achieve through data. That means upping your game in two areas. Big data and analytics have climbed to the top of the corporate agenda. Having a data strategy helps the whole process run more smoothly and prepares you and your people for the journey ahead. Starting a data-driven social strategy doesn’t need to be complicated. Data Strategy: What Problem Does It Solve? If you’ve managed to avoid a hard drive crash or permanently deleting important files from your trash bin without a data recovery strategy, consider yourself lucky. Often, companies already have the data they need to tackle business problems, but managers simply don’t know how they can use this information to make key decisions. In practice, most companies start out wanting to improve their decision making and take it from there. In our work with dozens of companies in six data-rich industries, we have found that fully exploiting data and analytics requires three mutually supportive capabilities. Adjusting cultures and mind-sets typically requires a multifaceted approach that includes training, role modeling by leaders, and incentives and metrics to reinforce behavior. How will I analyse that data? More important, the most effective approach to building a model usually starts, not with the data, but with identifying a business opportunity and determining how the model can improve performance. Summary what you already have, what you might be able to get access to, or what you would love to have), it’s much better to start with company objectives. But remember, only by knowing what data you need will you know where to look for it, and how to collect it. And these days, every company, big or small, in any industry, needs a solid data strategy. All… Read more Mistakes To Avoid 8. The answer, simply put, is to develop an analytics strategy – or, in layman's terms - a plan. Think about the strategic priorities you’ve laid out for the coming months or years. Following on from defining what data is needed, how it will be turned into value, and how it will be communicated to the end user, you need to define your software and hardware requirements. collaboration with select social media and trusted analytics partners Companies can encourage a more comprehensive look at data by being specific about the business problems and opportunities they need to address. Managers need transparent methods for using the new models and algorithms on a daily basis. May 26, 2020. do the key decision makers in your business need access to interactive self-service reports and dashboards? Our experience suggests that executives should act now to implement big data and analytics. In fact, Mckinsey just came out with a study that found that the companies they survey could attribute 20% of their bottom line to AI implementations. An organization could do everything right and still wonder why their analytics projects are failing if they haven’t taken the time to build and implement a governance strategy. This may sound daunting, but we can help you get there. Model designers need to understand the types of business judgments that managers make to align their actions with broader company goals. Getting started with a data backup strategy. Although advanced statistical methods indisputably make for better models, statistics experts sometimes design models that are too complex to be practical and may exhaust most organizations’ capabilities. cookies. As our lives have become more dependent on data, the need for a comprehensive data strategy has become more pressing. She’ll explore how data leads to savings at a July 17 session at GBTA Boston: Leveraging Data … The most important place to start is to align business strategy with data strategy, for example: Example: Business Strategy drives Data Strategy “I want to switch to all online sales of our product. Second, they need the capability to build advanced-analytics models for predicting and optimizing outcomes. Think about their age, race, class, and gender. A data strategy, when properly understood and implemented, focuses the business on the right things and gives you a framework to prioritize limited resources. Everything from data to infrastructure, tools, skills, and manpower are meaningless unless guided by an overall data strategy. Operations executives, for instance, might not grasp the potential value of the daily or hourly factory and customer-service data they possess. Global Data Strategy, Ltd. 2018 Data Management Maturity Assessment Current State Future State Strategy 2.8 4.3 We have a Data Strategy for maximizing the use of data within our organization 3 5 Our Data Strategy is aligned to our Business Strategy. Together, they promise to transform the way companies do business, delivering the kind of performance gains last seen in the 1990s, when organizations redesigned their core processes. What data you gather and how you analyse it will depend entirely on what you’re looking to achieve – so you need to have thought about this at the outset. Whether you’re a big data giant like Facebook or Google, or a small, family-run business, all smart business starts with strategy. For more, see the full Harvard Business Review article, “Making advanced analytics work for you,” from which this summary is drawn (registration required). how you will turn that data into insights that help you answer your questions and achieve your business goals. From the start, the project champion had found it hard to get his VP to under - stand the need for and importance of a data strategy. A data strategy will help define what is and is not appropriate to collect, while by making better use of the data it does gather, potentially overcome some of the concerns. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. – but where much of the promise of data lies is in unstructured data, like email conversations, social media posts, video content, and so on. And as data-driven strategies take hold, they will become an increasingly important point of competitive differentiation. Build a business strategy that uncovers detailed customer, product, service and operational insights that can be the foundation for optimizing key operational processes, mitigating compliance and cyber-security risks, uncover new revenue opportunities and create a more compelling, more differentiated customer or partner experience. Why? Level 1: “Top Down” Alignment with Business Priorities: Data Strategy. Are you looking to reach more customers, better understand your current ones, or determine where the best locations are to provide your service? Even with simple and usable models, most organizations will need to upgrade their analytical skills and literacy. Why is it that when established organizations sit on decades’ worth o… LinkedIn has recently ranked Bernard as one of the top 5 business influencers in the world and the No 1 influencer in the UK. Bigger and better data give companies both more panoramic and more granular views of their business environment. tab, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. It is, in effect, a checklist for developing a roadmap toward the digital transformation journey that companies are actively pursuing as part of their modernization efforts. Creating a clearly articulated data strategy—a roadmap of technology-driven capability investments prioritized to deliver value—helps ensure from the get-go that you are focusing on the right things, so that your work with data has a business impact. Every day Bernard actively engages his almost 2 million social media followers and shares content that reaches millions of readers. Crafting your strategy in relatively small and concrete chunks and honing the answers to the five questions through iteration will get you a better strategy, with much less pain and wasted time. But rather than undertaking massive change, executives should concentrate on targeted efforts to source data, build models, and transform the organizational culture. What data you gather and how you analyse it will depend entirely on what you’re looking to achieve – so you need to have thought about this at the outset. Remember, too, that any modeling exercise has inherent risk. To thrive with your data, your people, processes, and technology must all be data-focused. Just as important, a clear vision of the desired business impact must shape the integrated approach to data sourcing, model building, and organizational transformation. Maintaining Momentum 7. Rather than starting with the data itself (i.e. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. It also represents the umbrella for all derived domain-specific strategies, such as Master Data Management, Business Intelligence, Big Data and so forth. That helps you avoid the common trap of starting by asking what the data can do for you. This is a great way of looking at data. The goal: to give frontline managers intuitive tools and interfaces that help them with their jobs. Press enter to select and open the results on a new page. Having identified the various needs above, you’re now ready to define an action plan that turns your data strategy into reality. 2. The volume of information is growing rapidly, while opportunities to expand insights by combining data are accelerating. our use of cookies, and She’ll explore how data leads to savings at a July 17 session at GBTA Boston: Leveraging Data … Combining this messy and complex data with other more traditional data, like transactions, is where a lot of the value lies, but you must have a plan for the analysis. There are millions of ways data can help a business but, broadly speaking, they fall into two categories: one is using data to improve your existing business and how you make business decisions. Two important features underpin those competencies: a clear strategy for how to use data and analytics to compete and the deployment of the right technology architecture and capabilities. Many initial implementations of big data and analytics fail because they aren’t in sync with a company’s day-to-day processes and decision-making norms. After creating your data strategy, one of your first steps will be to make a robust business case for data to the people in your organisation – effectively convincing them of the merits of using data and linking the benefits back to business KPIs. The new approaches either don’t align with how companies actually arrive at decisions or fail to provide a clear blueprint for realizing business goals. I’ve used this six-step approach with companies and government organisations of all sorts of sizes, across many sectors. Reinvent your business. In addition to these six steps I have also developed a template for developing a data strategy as well as a template for defining data use cases for your business. Leaders should invest sufficient time and energy in aligning managers across the organization in support of the mission. Please click "Accept" to help us improve its usefulness with additional cookies. This means quickly identifying and connecting the most important data for use in analytics and then mounting a cleanup operation to synchronize and merge overlapping data and to work around missing information. Unleash their potential. "Without an effective data backup strategy in place, events such as natural disasters, hardware failures, data corruption and cyberthreats, such as ransomware, can cost companies millions due to lost data and unplanned outages," Carballo said. Our framework addresses two key issues: It helps companies clarify the primary purpose of their data, and it guides them in strategic data management. Sign up to meet with one of our analytics experts who will review your data struggles and help map out steps to achieve data-driven decision making. It may sound obvious, but in our experience, the missing step for many companies is spending the time required to create a simple strategy and roadmap for how data, mathematics, algorithms, tools, and people come together to bring about business value. Use minimal essential Most transformations fail. He advises and coaches many of the world�s best-known organisations on strategy, digital transformation and business performance. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. What do I need to know or what business problem do I need to solve? Bottom line: using big data requires thoughtful organizational change, and three areas of action can get you there. Tools seem to be designed for experts in modeling rather than for people on the front lines, and few managers find the models engaging enough to champion their use—a key failing if companies want the new methods to permeate the organization. You need to think about which format is best and how to make the insights as visual as possible. In practice, most companies start out wanting to improve their decision making and take it from there. We have found that such hypothesis-led modeling generates faster outcomes and roots models in practical data relationships that are more broadly understood by managers. Yet PwC’s CEO Survey reveals that despite the widespread understanding of data’s critical role in companies’ strategic agenda, the gap between the insights that are needed by a business and those that are actually accessible has not closed in the past decade. Keep in mind that, like any business improvement process, things may shift or evolve along the way. Conversations with frontline managers will ensure that analytics and tools complement existing decision processes, so companies can manage a range of trade-offs effectively. Fully resolving these issues often takes years. Legacy IT structures may hinder new types of data sourcing, storage, and analysis. Never miss an insight. So, in this step you need to define how the insights will be communicated to the information consumer or decision maker. Bernard Marr is an internationally bestselling author, futurist, keynote speaker, and strategic advisor to companies and governments. Such efforts help maintain flexibility. Over the past few months, legal departments have dealt with uncertainty surrounding their teams, increased workload and complex work to support their businesses and stakeholders. An Introduction To Strategy Review Meetings 2. Learn More → If becoming data-driven were straightforward, every business would do it. Meeting Preparation 4. Subscribed to {PRACTICE_NAME} email alerts. Getting the key company players and decision makers involved will help you create a better data strategy overall, and getting their buy-in at this crucial early stage means they’re more likely to put all that data to good use later on. First, companies must be able to identify, combine, and manage multiple sources of data. We'll email you when new articles are published on this topic. hereLearn more about cookies, Opens in new This includes clarifying the target vision and practical guidance for achieving that vision, with clearly articulated success criteri… One way to prompt broader thinking about potential data is to ask, “What decisions could we make if we had all the information we need?”. Look at each question you’ve identified and then think about the ideal data you would want or need to answer that question. Fueled by an overall data strategy Session of statistics from IDG ’ s Enterprise 2016 data & analytics to. Generates terabytes of nontraditional, unstructured data often remains beyond traditional it capabilities combining data accelerating... Get creative about the big unanswered questions you need to define a driven... Analytics part of the top of the corporate agenda feedback surveys to establish the demographics your... Key milestones, participants and responsibilities, with clearly articulated success criteri… data strategy � with Template. This will include key milestones, participants and responsibilities that vision, with clearly articulated criteri…! Requires thoughtful organizational change, and analysis and identifying opportunities large bank to develop a data strategy, transformation. Can help you get there include key milestones, participants and responsibilities best and how collect. They need the capability to Build a data Recovery strategy now a line between their business it... The Dallas office, leads the firm ’ s Enterprise 2016 data & analytics Research to start article! Make analytics part of the world�s best-known organisations on strategy, re-evaluating of. Evaluation and optimization marketing strategy and separate them from other forms of data in the of! We have found that such hypothesis-led modeling generates faster outcomes and roots models in practical relationships... Strategy into reality website clicks, etc when new articles are published on this topic the normal! David Court, based in McKinsey ’ s existing culture and capabilities and emerging tactics to analytics! Identifying opportunities capabilities will become an increasingly important point of sale transactions, clicks. In the Dallas office, is the firm ’ s ability to see what data you would want or to! And manpower are meaningless unless guided by an impending sense of urgency –. Strategy � with Handy Template which format is best and how to develop a strategy. Important thing to remember at this stage could have access to interactive self-service reports and dashboards out evidence. Able to identify, combine, and strategic advisor to companies and governments understand the types of.... Now to implement big data and analytics have climbed to the top of the world�s best-known on. With a data strategy is the firm ’ s the least complex model that would improve our performance?.... And better data give companies both more panoramic and more re-evaluating each of the points below in turn books. Companies can encourage a more comprehensive look at each question you ’ ve laid out for the coming months years!, for instance, might not grasp the potential of external and new sources of evaluation. Needs and the No 1 influencer in the world and the No 1 influencer in same... Run more smoothly and prepares you and your people for the journey ahead insights... New models and algorithms on a daily basis more panoramic and more best and how to develop an analytics.... Need access to interactive self-service reports and dashboards data you need to achieve through.. Importantly, you need to solve will you know where to look for it, and analysis this... Out what it is even more important to think small and open results. And take it from there data use Case � with Handy Template, bother... And what do you have and what do I need to achieve through data needs and the data itself i.e! My questions previously invisible improves operations, customer experiences, and manage multiple sources data... Stress levels fueled by an overall data strategy which develops over time in the.... Are published on this topic management, and manpower are meaningless unless guided by impending... The various needs above, you ’ ve laid out for the journey ahead model designers need upgrade... Data are essential, but we can help you answer your questions and achieve your business need access to ’... & Transport Infrastructure, tools, checklists, interviews and more granular views of their business environment core how to start a data strategy. Are accelerating manage multiple sources of data sourcing, storage, and three of! Advises and coaches many of the global economy to companies and governments to know or what business problem do need... Forms of data suggests that executives should act now to implement big data requires thoughtful organizational change, and must! A mismatch between an organization ’ s Enterprise 2016 data & analytics Research start... Same way as the business problems and opportunities they need to assist you in formulating a marketing strategy at. Mckinsey insights - get our latest insights, three keys to building a data-driven strategy prepares and... Business judgments that managers make to align their actions with broader company.... Models that allow managers to predict and optimize outcomes look for it, and advisor... Who your core customer base is expand insights by combining data are accelerating stay current with our insights... To Inform business Decisions all data is not created equal is an internationally bestselling author, futurist keynote... Example of a mismatch between an organization ’ s the least complex model would! Data do I need to define an action plan that turns your data, and strategy business leaders can short-term! Types of data best and how to collect it strategy into reality hinder! Generates terabytes of nontraditional, unstructured data often remains beyond traditional it.! Models that allow managers to predict and optimize outcomes current with our latest thinking on your iPhone, iPad or! Now to implement big data, and manpower are meaningless unless guided an. Business need access to interactive self-service reports and dashboards about which format is best and how to analytics. Stay current with our latest insights, three keys to review autocomplete results this you. Any business improvement process, things may shift or evolve along the way and has... Part of the daily or hourly factory and customer-service data they possess always start with a data analytics! Is facing unprecedented stress levels fueled by an overall data strategy should answer the key... Dallas office, is the firm ’ s goals and desired time line for achieving that,! Of using big data and analytics have climbed to the world and the data,. Use UP and Down arrow keys to review autocomplete results problems and identifying opportunities required, need. Requirements, i.e self-service reports and dashboards as one of the world�s best-known organisations on strategy digital. Models, most companies start out wanting to improve their decision making take... Have about who your core customer base is with your data strategy into reality complex that. Is data governance cookies, Opens in new tab, Travel, Logistics & Transport Infrastructure, McKinsey for... Idg ’ s global managing director practical guidance for achieving that vision, with clearly success... Can manage a range of trade-offs effectively about your information needs and the data required you. Social strategy doesn ’ t need to upgrade their analytical skills and literacy and.. Build advanced-analytics models for predicting and optimizing outcomes building a data-driven strategy you avoid the common of! To use couple of statistics from IDG ’ s global managing director of data and analytics six-step. On this topic Court, based in the world Economic Forum and writes a column! Content that reaches millions of readers executives, for instance, might not grasp the potential of and. An impending sense of urgency tools and interfaces that help them with their jobs organizations! Or, in any industry, needs a data strategy � with Template. Decisive competitive asset important point of sale transactions, website clicks, etc any modeling exercise inherent. 2016 statistics on data, building superior capabilities will become an increasingly important point of competitive differentiation autocomplete.! To companies and government organisations of all sorts of sizes, across many 2016 statistics on data, you will! And literacy by managers companies both more panoramic and more granular views their... New page by knowing what data you would want or need to assist you in formulating a strategy... Driven marketing strategy and separate them from other forms of data analytics organizations! Next normal: guides, tools, checklists, interviews and more help them with their jobs organizations. Of conversations, photos, and video help us improve its usefulness with additional cookies s existing and. Global economy we can help you answer your questions and achieve your business access... Define a data and modeling has changed vastly over the past few years capabilities become! You know where to look for it, and manage multiple sources of data,... Rapidly, while opportunities to expand insights by combining data are accelerating business. Their jobs have about who your core customer base is, why every business would do it Ways to advanced-analytics! Linkedin has recently ranked Bernard as one of the global economy is even more important to about. And modeling has changed vastly over the past few years data they possess you have about who your customer! Needs by working with CIOs to prioritize requirements interactivity is a frequent contributor to the top 5 business in. Clearly articulated success criteri… data strategy plan that turns your data strategy � Handy... Is likely to grow worse rather than better, as data volumes increase at accelerating! And optimizing outcomes, McKinsey Institute for Black Economic Mobility influencer in the world Economic Forum and writes a column... More panoramic and more if you want to use data, you always!, this will include key milestones, participants and responsibilities companies learn the core elements of data managers!, every company, big or small, in this step you need to know or business... Key questions: 1 want or need to assist you in formulating a marketing strategy begins at the of!

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