We live in the age of big data, where every company, big or small, has some part to play in the space. However, despite the potential big data has to transform businesses and the way they operate, that potential is being left largely unfulfilled due to a lack of knowledge of how to integrate and understand it. This isn’t an area that should be thought of on a project by project basis or something that should be left to the CIO to deal with. Big data is fundamentally a business issue, something that can create opportunities for enterprises to target untapped markets, reduce operational costs and improve communications strategies. Business leaders must see it as an enabler to take their company to the next level, rather than a hindrance.
Capgemini partnered with Informatica recently to examine the biggest challenges and successes of big data strategies. The resulting report, “The Big Data Payoff: Turning Big Data into Business Value” makes for interesting reading if you want to know more about how and why successful big data strategies are central to digital transformation.
Integrating big data into business strategy
The study provides a number of key insights into those organisations that are achieving significant business impact from their big data investments. Overall, the main insight gained from the report is that big data needs to be integrated into every aspect of a business in order to drive positive and productive transformation.
So what does this mean in practice? And what specific lessons can we learn about how to improve the ratio of big data projects that are profitable.
Somewhat surprisingly, less than a third (27 per cent) of big data projects are currently profitable, whereby the benefits are outweighing the costs. A key finding of the research reveals that project ownership is a key indicator of profitability, with COOs and CDOs more than twice as likely to be running profitable big data initiatives as CIOs. 49 per cent of respondents who noted high levels of executive buy-in reported that their big data initiatives are profitable, compared to just 6 per cent who do not have board level executive support.
Still, over half of respondents (52 per cent) revealed that CIOs are still responsible for big data strategy overall. Though it is also clear that other members of the C-suite are also stepping up to the big data challenge, with the COO (20 per cent), CTO (17 per cent) and CMO (16 per cent) all now likely to be involved. Being able to visualise big data for its true value can be a challenge and this is why further assistance beyond the CIO is needed. New roles and responsibilities are also being created, such as the CDO (Chief Data Officer), someone who can oversee the whole business and is not restricted to one particular area or team.
A disciplined approach to big data leadership
It’s revealing to take a closer look at those companies making the most progress with operationalising big data projects. Tellingly, it is those businesses with well-structured governance, a disciplined approach to implementation and an engaged business leadership that are rapidly reaping the big data rewards.
As already indicated above, there is a clear and compelling case presented by this latest report that big data projects should be both fully integrated into the longer-term business strategy and that they are run and managed as company-wide initiatives. Having significant buy-in from senior management not only helps create a clear big data strategy, but also helps guarantee the necessary financial and operational resources in order to deal with any integration and security issues. Getting senior management involved right from the outset of big data projects means the company can focus on the key areas that create business value, as well as those that are IT and data driven. It’s not surprising to see the role of the COO becoming more prominent in these situations and indicates that overall integration may be more of an important factor than the technical knowledge of individuals. Far from the CIO taking a backseat though, in the new world of “business transformation that is analytics-driven and data-enabled,” IT is now a driving force for the business not just a provider of services for it.
Data quality, governance practices and business success
The results also show that there is clearly a direct correlation between the use of data quality and robust, collaborative data governance practices and successful business outcomes from big data projects.
Importantly, three quarters (75 per cent) of those respondents making a profit from big data initiatives also reported that they had made excellent or very good progress in improving data quality and data governance, compared to 50 per cent overall. Plus, among those organisations with profitable projects, the number one benefit (51 per cent) is improved customer satisfaction and customer retention.
In order to truly achieve business value repeatedly and sustainably, this requires focusing investments around the three key pillars of data management: big data integration, big data quality and governance, and big data security. Data management, quality and security, together with constrained budget, are among the main areas of concern for companies when dealing with big data. These concerns are natural but if addressed properly can be eased as the real benefits of an integrated strategy come to the fore.
While it may be the case that less than a third of companies are currently recognising a direct short-term profit from big data initiatives, the impact and benefits of successful big data investments extend way beyond profitability. Nine out of 10 respondents in the study have seen other gains, from improved decision-making (38 per cent) to improved collaboration/information sharing (35 per cent), and improved productivity (33 per cent).
Overall, the companies that are reaping benefits are embracing business ownership of big data, which drives a step-change in performance. Big data is the new frontier via which businesses can drive excellence in their approaches to everyday operations – thus helping them reach the law of diminishing returns. And while there are still many challenges for organisations to overcome before they can become truly insights-driven – not least those involving budgetary constraints (noted by 43 per cent of respondents) and business-wide integration hurdles (35 per cent) – the real battleground is in effective leadership across the board helping to drive these big data initiatives forward.