An overwhelming majority of senior executives across the world’s largest organisations accept that their long-term business success will be based on mastery of the growing amount of data at their disposal. Yet despite recognising its value, less than 1 in 10 believe they are in a position to make use of the information held on customer preferences, behaviour and demands.
Most of the CFOs and CIOs questioned for a new report, released today by KPMG, admitted that they do not know how to analyse the data they have already collected (85 percent). Worryingly, more than half (54 percent) also identified their greatest barrier to success at an even more basic level – an inability to identify the data worth collecting.
Alwin Magimay, Head of Digital and Analytics for KPMG UK, says: “Most organisations are unable to connect the dots because they do not fully understand how data and analytics can transform their business. The problem is a little like asking the Wright brothers how they planned to land their plane on an aircraft carrier when they were still struggling to keep it in the air for an extra foot. In other words, unless businesses tackle the problem of data collection and analysis one step at a time they run the risk of crashing and burning.”
According to the report some progress has been made since Big Data emerged as a key tool for business development. 56 percent of respondents claim they have changed business strategy to meet the challenges it poses and approximately two-thirds now expect to uncover insights that, otherwise, would have been missed.
‘Going Beyond the Data’ goes on to reveal that data and analytics role in the future of business strategy looms large, arguing that winning in today’s market requires world class insight and the ability to change direction at short notice. The problem, however, is that few businesses are in a position to adapt, with 4 in 10 executives concerned that integrating data analytics into existing systems is their greatest challenge. It’s also concerning to note that only 39 percent have trained their analysts to cope with a new approach to business.
The report highlights case studies showing that businesses taking an early lead in harnessing and exploiting social media data are already demonstrating the value that outside data can add. In one example a car manufacturer had been developing campaigns based on four key ‘characteristics’ believed to be vital to customers. The information was gleaned from internal data but once social media was used it became clear that only one of their selected characteristics actually mattered to their customers. In the process, two ‘new’ characteristics were also identified and validated.
Magimay adds: “In the past, decision making was largely driven by intuition and experience; whoever had the best ‘gut feel’ would win. Today, the winners are defined by who has the more insightful grasp of their data.”
It is also evident from questioning the executives that many accept greater investment in data and analytics is vital. 71 percent said they plan to spend more than 5 percent of their sales on data and analytics over the next 2 years – up from the 69 percent claiming to have spent a similar amount over the past 12 months.
Magimay concludes: “Few organisations fully understand the huge potential residing within their data. Fewer still are making the right changes to their business strategy to take advantage of that potential. The fact is that zeroing in on the business problems and identifying key hypotheses may not be the easiest thing to achieve up front, but it is far more efficient and effective in the longer term. If they are to succeed businesses need to accept that throwing all available data into a pot and hoping for a tasty stew of insights will rarely – if ever – deliver meaningful results.”