Johannesburg, 06 Sep 2021
It is not a stretch of the imagination to say data is a bigger business priority today than ever before.
The confluence of several transformative factors – the exponential growth in structured and unstructured data, the growing digitisation of personal and professional life, the power of the tools available to mine and manage data – all lead to a single outcome.
The organisations that can effectively harness data to support their business decision-making at every level of the organisation will consistently outperform their peers.
Take Netflix. Despite fierce competition from traditional film publishers, Netflix still dominates the video streaming sector, in part due to its superb use of big data and analytics.
The streaming service's algorithms are reported to save Netflix around $1 billion per year in customer retention. Its recommendation system is so well designed that 80% of content streamed on Netflix originates from algorithmic recommendations.
Advantages clear, but adoption lagging
Broadly, organisations that use data and analytics effectively enjoy a slew of advantages, including improved efficiency and productivity, better and faster decision-making, improved financial performance and the creation of new revenue streams.
A recent report by NewVantage Partners found that a representative sample of Fortune 1000 companies had made near-universal investments into AI and data for the third year in a row.
And yet, the majority of organisations still reported struggles with deriving value from their investments, citing several challenges with becoming genuinely data-driven organisations.
Among the obstacles to deriving value from their big data and AI investments, organisations in the report cited legacy systems, outdated business processes and cultures resistant to change.
Perhaps unsurprisingly, only 30% of those surveyed reported having a solid data strategy in place.
Strategy drives adoption and data culture
In practice, data strategies don't fail by themselves. Instead, the people enable that data strategy that makes the difference between success and failure.
One of the key factors contributing to a lack of adoption among teams is how well the data strategy aligns with and supports the broader business strategy.
If an employee or department's mandate is to generate revenue, and the data strategy makes no clear link between new processes and tools introduced by that strategy and how they will help drive revenue, adoption will inevitably lag.
For example, a report into digital transformation within the banking sector found that only 14% of respondents make big data technologies available to the organisation all the time, with half stating it is only to a certain or limited extent.
And only 8% said data leveraged from core banking systems through smart middleware and APIs were always available to the organisation.
Any innovation built on core banking data and designed to support end-users within the organisation would have little if any uptake since it is largely unavailable.
Align data strategy with business strategy
Organisations should ensure their data strategy is built with the business strategy front and centre, and that early data initiatives focus on solving high-value business problems.
Becoming a truly data-driven organisation takes time and requires ongoing evolution and adjustment. Organisations need to ensure end-users support new data initiatives and adopt the tools necessary to bring both the data strategy and business strategy to life.
By achieving quick wins in how high-value business processes are improved through data initiatives, organisations can mobilise support for further initiatives while ensuring such initiatives become baked into the company culture.
There is everything to gain in becoming truly data-driven. Nearly eight in 10 business executives in one study said they believe that not embracing data will cause them to lose competitive position and risk extinction.
By developing a smart, actionable data strategy with clear benefits to end-users, organisations can start building a data-driven culture that embraces new data initiatives to benefit themselves and the broader organisation.
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