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Reaching the data gold standard: dream or reality?
The pandemic has forced businesses to adopt digital technology at a record pace but most organisations find themselves at the beginning of a long journey towards making the most of their data
On the face of it, the concept of businesses bringing structured and unstructured data together through technology to surface new insights about themselves, their products and their customers sounds simple.
But this year’s Harvey Nash Group Digital leadership report – the world’s largest and longest-running survey of senior technology decision-makers – shows that reaching this data gold standard remains tantalisingly difficult for organisations to pull off.
The research shows that only around a quarter of technology leaders rate their organisation as highly effective in using data to generate more revenue or to inform their product or service offering.
The picture is slightly better for large organisations – those with tech budgets of $250m or more – with 38% rating themselves as very effective in using data to generate revenue and 39% to inform their product or service. It may be the case that larger organisations simply have more data to play with, but it’s also the case that they are prepared to invest, and they are seeing more returns as a result.
However, even among those larger companies, relatively few are making the jump to large-scale implementations of big data. Less than a quarter (23%) of digital leaders say their organisation has implemented big data on a large scale, with a third (34%) having introduced it in small pockets.
There remains a preference to dip the corporate toe in the water through pilots and proof of concepts in emerging technologies, opting to learn fast and fail fast rather than commit to large initiatives. This is even more pronounced with other emerging technologies such as robotic process automation (RPA), artificial intelligence (AI) and the internet of things (IoT).
Rise of the digitally excellent
If this sounds somewhat disappointing, there are grounds for encouragement. The proportion of technology leaders rating themselves “digitally excellent” has risen significantly in the past 12 months – from 30% a year ago to 41% now.
There’s no doubt that the pandemic has forced businesses to digitally upgrade at pace. And it won’t stop here. Digital leaders are reporting the highest ever level of optimism for increasing tech budgets and headcount for the coming year.
Crucially too – and as we regularly remind our customers – it doesn’t all have to happen at once. This is a journey. The path to reaching the data gold standard is a long one, not a short sprint. The key is to create an incremental roadmap of stages along the journey: gradual, affordable technical investments within a manageable change programme that produce visible impacts and enable the business to achieve specific goals.
You don’t need to look far to see the prevalence of data ingestion and cleaning tools in the market, but tooling alone isn’t enough. To make it meaningful, you need to understand which datasets are important and why. You need to have a clear governance framework around what good quality data looks like and how it can be modelled and interpreted to result in meaningful, data-driven, informed decision-making. Only then can data shift the dial in terms of operational efficiency, revenue generation and customer satisfaction.
Capability gaps holding leaders back
There is no doubt the data challenge is exacerbated by that long-running bugbear of the industry: skills shortages. There remains a significant gap in the market between the skilled staff needed for deep data analysis and insight, and those available. Four in 10 digital leaders say they are suffering from a shortage of big data and analytics talent, the second most acute shortage only narrowly behind cyber security (43%).
If on top of this skills challenge we layer the emerging trend that the leadership of digital and data is becoming more and more diffused across the organisation, then we can clearly see the risk of varied strategies arising, with different priorities around data and different opinions on what “good” looks like. The pressure (or challenge) on a small number of people to bring data strategies to life in meaningful, value-add, customer-centric, commercial ways, is immense.
Cloud brings clarity
Most businesses have already migrated significantly to the cloud – 60% have done so on a large scale – and, approached correctly, this can become a catalyst for data progress. Cloud naturally makes data management easier and brings the cost of data storage down at the same time.
However, there are some golden rules to observe. First, avoid “hoarder mentality”. Just because it’s cheap to hold data in the cloud doesn’t mean you have to bring all of it across. Remember also the adage “rubbish in, rubbish out”. Don’t simply reinvent the old situation in the cloud, but take the opportunity to transform and modernise how you think about your data from beginning to end – capture, management and utilisation.
In this way, an organisation will not only get better data quality as a foundation, but can take the deliberate step-changes needed to become a data-driven enterprise and reap the benefits that brings.
Nirvana – getting nearer
Any company that isn’t using its data to continuously improve itself, better understand its customers, and tailor its products and services accordingly will find it quickly loses relevance and position in the market. That’s why reaching the data gold standard matters. Our research reveals that most organisations still have some way to go.
At the same time, progress is accelerating. Data insights can be a unifying force touching every part of the business: workflow, workforce and workplace. A single source of truth is an aspiration for digital leadership – and that nirvana is gradually getting nearer.
The Harvey Nash Group “Digital leadership report” (registration required) published today lays claim to be world’s largest and longest running survey of senior technology decision-makers.