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Companies know they need to accelerate digital transformation in response to changing customer expectations and behaviours, as well as the technological advances driven by the Covid-19 pandemic.
In fact, more than two-thirds (68%) of CEOs who responded to the global 2021 EY CEO imperative study are planning to make a major investment in data and technology over the next 12 months.
Yet, while companies recognise the imperative to transform, many are struggling to realise their ambitions in practice. Data is a major stumbling block here. Concerningly, just 34% of CEOs globally who responded to the study thought that customers trusted their company with their data. That figure rose to 41.3% in Europe, the Middle East and Africa (EMEA), most likely due to the EU’s General Data Privacy Regulation (GDPR) and other privacy-related developments in the region.
This shortfall in trust presents widespread issues for companies that are looking to drive business growth through transformation. An absence of meaningful information about their customers prevents them from gleaning data-driven insights and making data-driven decisions, in either real time or near real time. This, in turn, hinders almost every conceivable strategic activity, from business model re-imagination to supply chain visibility and the development of new customer propositions.
The majority (63%) of CEOs believe technology and digital transformation are the prevailing trends that will have the greatest impact on their businesses. More specifically, the survey found that making greater use of artificial intelligence (AI) and data science was the top priority for C-suites looking to drive organisational growth, followed by disruptive innovation.
To harness the full potential of these approaches, however, companies need customers to trust them with aspects of their data. To provide the level of insight that brings true competitive advantage, technology must be able to draw on a rich diversity of sources.
Closing the gaps around data trust won’t happen overnight. Companies have a responsibility to prove that they can be trusted with customers’ personal information, while regulators need to standardise some of the definitions and governance associated with data, since there are some wide variances in these areas today.
To build trust, companies should focus on using customers’ data in responsible ways that generate positive outcomes in the form of an enhanced experience or improved products and services. They should also use customer data as the basis for continuous digital transformation that generates sustainable growth, while delivering long-term value for all stakeholders, including customers, employees, investors and society more broadly.
Fortunately, CEOs are, in many cases, keenly aware of this requirement. As the EY survey found, over a quarter (26%) of CEOs thought that a focus on long-term value was the most important characteristic of a successful future enterprise. Linked to this was the significance of ecosystems and partnerships, with 21% of CEOs believing that a successful future enterprise is embedded within external ecosystems.
Companies should also be sensitive to the ethical concerns that exist in society, and among policy-makers, around the use of new technological tools, particularly AI applications. The global EY think tank found that when it comes to AI, companies are not always as focused on fairness and avoiding bias as policy-makers would like them to be.
Looking forward, CTOs and CIOs have an important role to play in helping CEOs accelerate digital transformation through closing the data trust gap. They can build trust by ensuring that humans are put right at the centre of digital transformation, while helping their organisations to deliver new technology at speed and innovate at scale.
What’s more, they can be instrumental in the business strategy process, demonstrating to the board how the company’s investments in technology and data will drive transformation that unlocks real business value for all stakeholders – today, tomorrow and in the long term.
The views reflected in this article are those of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organisation.