Missing opportunities to use data
It is easy to ignore all the insight that we gather and still make decisions based on instinct, but isn’t it great when your opinion is backed up by the prevailing data… A few things that I have been reading however suggest that we are not fully utilising the data we have access to either to drive our decision making processes or to support them.
A survey by Freshfields Bruckhaus Deringer in 2016 showed data is increasingly valuable to all businesses, with nearly 90 per cent of their respondents saying access to data is critical to being competitive in their industry.
Their results also revealed the huge variety of data sources companies use and the types of data they collect. Seven in ten respondents gather productivity or output data from machines, and more than 60 per cent collect data from external sources such as business partners.
The benefits of smart analytics
One of the keys to extracting value from data is the use of smart analytics – advanced algorithms that can make sense of vast pools of disparate information.
Research by McKinsey showed that big data analytics have ‘substantial’ profitability and productivity benefits. McKinsey reports that the average business investing in big data analytics experiences an initial 6 per cent increase in profits, which rises the longer the investment continues.
It is therefore not surprising that over 90 per cent of respondents to the Freshfields survey are using these smart tools. However, less than half (45 per cent) say they use data to enhance the quality and scope of their current products and services.
Just 27 per cent are using data to develop new products and services, despite 81 per cent saying they collect data expressly for this purpose.
But when asked how enhanced use of data could reshape their organisations, 72 per cent say it could change the products and services they offer – and 58 per cent say it could change entire business models!
What conclusions can we draw from all of this…businesses recognise data’s value. They are collecting lots of it and analysing it with advanced tools. They can see the potential to transform what they do and how they do it. Yet today, most are not using data to its potential to drive decision making. #data-driven decision making
Some very good points Matt, and summed up in your final sentence that smart analytics that are readily accepted and constantly available at the right time may be the key to changing behaviours and allowing data to enhance (if not replace) decision-making.
Interesting article Paul. Two things crossed my mind whilst reading: - 1. In my experience, a lot of decision makers look for data to validate the decision they want to make or have already made as opposed to looking at the data and then making a decision or creating a business strategy. Is this why so much remains untapped? 2. The art of balance - for me the most inspiring leaders are the ones that can use data (historical events) and blend it with innovation (future direction) to create inspiring meaningful strategy. Can solely using data to drive strategy be a sustainable base for growth - or does it need to be tempered with innovation and entrepreneurship. A real challenge to unlocking the value of data for me is access and visibility, are the key people getting what they need when they need it, hence why smart analytics is so important moving forward.
Couldn't agree more. The question remains why it is untapped?
Good read, data analytics can be the strategic advantage that organisations are looking for and in most cases the most valuable commodity an organisation can have that remains untapped.
Nice article Paul