Cultural gaps impede NZ companies’ efforts to be data-driven
- 18 February, 2015 07:34
Organisations across New Zealand attempting to gain competitive advantage through data initiatives are stymied by a disconnect between how CEOs see the current status and benefits of data initiatives and how lower-level managers see them.
That's according to a global study sponsored by Teradata, which shows that data-driven companies are more likely to outperform their competitors when it comes to profitability.
“The survey makes it clear that organisations succeed when the data-driven vision and leadership are shared, and the benefits of data initiatives are consistently tracked, promoted and, most importantly, linked to corporate goals and business results," says Andrew Blamey, VP A/NZ, Teradata.
CEOs have a rosy view of data initiatives
According to findings, executives other than the CEO, and especially lower-level managers, see the current status and benefits of data initiatives far differently than the CEO.
While 47 per cent of CEOs believe that all employees have access to the data they need, only 27 per cent of all respondents agree that they do.
Similarly, 43 per cent of CEOs think relevant data are captured and made available in real time, compared to 29 per cent of all respondents.
CEOs are also more likely to think that employees extract relevant insights from data: 38 per cent of them hold this belief, as compared to 24 per cent of all respondents and only 19 per cent of senior vice presidents, vice presidents and directors.
Converting data into insights is still a struggle
Blamey says that while many companies have invested significantly in gathering vast amounts of data, they still struggle to extract insights, put them to work for the business, and create truly data-driven organisations.
"When it comes to capturing and disseminating important business data, 57 per cent of respondents believe their company does a poor job," he adds.
"The issue is significantly more pronounced among underperforming, less innovative, and less technology-reliant companies.
"There is little disagreement that access to necessary data and ability to convert it into actionable insights are the greatest obstacles to data adoption and utilisation."
Data are unequally available even within data-driven and top-performing companies
"Data are not equally available even within the most data-driven and top-performing companies," says Blamey, adding that two-thirds of respondents agree that some departments have much better access to data than others.
This situation is particularly acute among companies with US$500 million in annual revenue or more, he adds.
"While CEOs are less aware of the problem (only half agree it is the case), lower-level managers are very vocal about it," he adds.
"Eight in 10 senior vice presidents, vice presidents and directors agree that data are unequally available.
"At the same time, 42 per cent of respondents find access to data cumbersome and not user-friendly, which further exacerbates the data-availability problem."
According to Blamey, there’s an "abundance of internal data" and a dearth of external customer and market data available, with respondents reporting a stack of useful internal, daily transaction data.
"But external data like customer demographics, behavioural patterns and market data are less widely available," he adds.
Following the results, Blamey says ways organisations across New Zealand, and the world, can be more successfully data-driven are as follows...
1. Agreement in leadership
Among the most profitable respondents, Blamey says 63 per cent say data initiatives are launched and driven by their corporate leadership and 41 per cent have a centralised data and analytics group responsible for introducing and implementing data initiatives.
Of those who say their companies underperform in profitability, those numbers are 38 per cent and 28 per cent respectively.
2. Using data to make decisions
Blamey says there is also a "high correlation" between a company’s tendency to rely on data when making decisions and its profitability and ability to innovate.
"Data-driven companies are more likely generate higher profits than their competitors reporting a low reliance on data," he adds.
"They are also twice as likely to report they have a culture of creativity and innovation."
3. Effective data analysis
Blamey says access to data and quantitative tools that convert numbers to insights are two to three times more common in data-centric companies.
"And, they are much more likely to reap the benefits of data initiatives from increased information sharing to greater collaboration to better quality and speed of execution," he adds.
Consequently, companies that outperform their competitors also are much better at extracting the benefits of data - seven in 10 agree that information and knowledge is shared quickly and freely in their company, compared to one-third of under performers.
4. Improved collaboration
Blamey adds that slightly more than half of the superior performers have seen better collaboration across business units and believe quality and speed of execution have improved, compared to three in 10 underperformers who believe quality and speed of execution have improved, and only one in four overall who say quality and speed of execution have improved.