The Data Behind Data-Driven Transformation
As an increasing number of organizations embark on journeys to improve their operations, data and analytics are becoming an increasingly vital part of their digitization and transformation efforts.
Our recently published whitepaper, Data & Analytics: The Key to Your Business Transformation, demonstrates how and why these tools are already being implemented in the world’s leading organizations. Statistics and case studies show that organizations across a spectrum of industries and of varying sizes have something to gain from its application; be it better management of supply chains, advanced process automation or enhanced decision making. But, despite this, a startling number are either a) discounting the potential benefits of data & analytics, or b) are unable to make the necessary cultural shift or commitment to introduce the analytical skills and technology investments to do so.
Here, we look at the statistics that provide insight into current perceptions on the application of data & analytics’ on the path to operational excellence and business transformation.
Data-Driven companies have become the most valuable in the world
The world’s most influential companies are driven by strategies that depend on data-led insights, yet other organizations seeking to emulate their success are still reluctant to commit to the numbers. Annual research from NewVantage Partners demonstrates an increasingly reported urgency for making effective use of data. 99% of this years’ research respondents say that their firms are trying to do so, but only a third have actually been successful. These firms also demonstrate a high level of concern directed toward the growing number of ‘disruptors’ who have been able to successfully develop a data-driven culture from their inception. When we look at the companies that comprise the list of the most valuable organizations in the world, it is easy to understand why this concern exists:
- Microsoft: $904,860
- Apple Inc: $895,670
- Amazon.com: $874,710
- Alphabet Inc: $818,160
(Market Capitalization in Billions of Dollars, Q1 2019)
The percentage of firms identifying themselves as being data-driven has declined in each of the past 3 years
Despite recognizing that data-driven organization’s are leading the flock, year-on-year the number of firms identifying themselves as such is on a steady decline. In 2017, 37.1% identified themselves as such, 32.4% in 2018 and 31.0% in 2019. It may be worth considering that the reason for these numbers is that businesses who in earlier years believed that being data-driven simply meant acquiring the right technology, but have since realized that it requires a significant shift in mindset and approach to decision making as well. Developing enterprise-wide data literacy and a data-driven culture is critical.
67% of CEOs say they have ignored the insights provided by data analysis or computer-driven models
Over the last 3 years, over two thirds of leaders admit that they have disregarded data-driven insights because they have contradicted their own intuition or experience. A sense of distrust among leadership can be one of the greatest inhibitors in developing a data-driven culture, and without this culture, the status of being a data-driven organization will continue to remain out of grasp. Similarly, research conducted by KPMG reveals that 35% of surveyed executives reported a high level of trust in their own organization’s use of data and analytics, however 25% admitted they either have limited levels of trust in, or actively distrust, the data they receive.
Research featuring insight from leading organizations including American Express, Ford Motor, General Electric, General Motors, and Johnson & Johnson revealed that:
- 72% are yet to forge a data culture
- 69% have not created a data-driven organization
- 53% are not yet treating data as a business asset
- 52% are not competing on data and analytics
As many leading organization’s still demonstrate a reluctance to commit to the sway of data and analytics, those who decide to join the ranks of the early adopters of data-led strategy can expect to gain a significant advantage over their peers. To learn more about how developing data competencies in your organization can provide you a significant advantage during periods of transformation, click the image below.