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It’s time for big data to start making big money

(Image credit: Image source: Shutterstock/wk1003mike)

Data quality and security have rightfully been among the top concerns for CIOs in 2016. There is, however, another key concern IT leaders should be focusing on in 2017. That is, empowering members of their organisations with actionable insights and data that enables employees to conduct analysis that can help to drive the business forward. Yet, despite the fact that 59 per cent of global leaders describe their decision-making process as empirical or data-driven, executives feel that they lack the data they truly need. These findings were uncovered in an Economist Intelligence Unit (EIU) report, Decisive Action, which surveyed 170 global managers and executives to explore how leaders use data in the decision-making process. The report contains insights that point to a fundamental problem that delays and often prevents companies from realising value from the vast information they collect.

Companies wait too long to use the data they already have

Like data security and integrity, ongoing data analysis is no longer a luxury, but rather an essential part of businesses today. As such, turning data into actionable insights is expected to rise further up the agenda for CIOs and organisation’s in 2017. The value of an organisation’s data is not driven by how much it can collect and store, but by how its data directly drives better decision-making. Nearly all (94 per cent) of the respondents in the EIU report said that they made an extra effort to ensure the information they used to make decisions was trustworthy. However, a never-ending quest to expand and cleanse data can paralyse an organisation’s ability to efficiently leverage it to reach actionable insights. According to another recent study, 60 per cent of senior executives and data scientists report that they are not very confident in their organisation’s data quality. Yet, rather than being paralysed by this, organisations can still realise and derive a significant profit benefit from making data-driven decisions. 

How you use the data matters more for driving business performance 

While ‘Big data’ has been the dominant buzzword for the past few years, many companies have yet to translate their data into ‘dollars’. This delay often stems from deeply entrenched concerns about data quality and accessibility. CIOs commonly believe that top quality data could increase profitability by 15 per cent, according to Experian’s Global Data Quality Research. Traditionally, companies efforts have been focused on data IT overhauls, rather than using the reliable information that already exists to improve decisions and drive profit impact.

Major Enterprise Data Warehouse (EDW) development phases often take years longer than planned. These years come with a high cost due to the practical implementation costs and, more importantly, the opportunity cost of delaying actionable insights that can effectively guide key decisions. The costs of delaying data-driven decisions is often not accounted for when projecting the profit benefit of “cleaner” data or “more data.” Companies seeking to innovate simply can’t afford to wait for these EDW efforts to be fully mature before taking data-driven actions. An organisation’s data will never be perfect, and waiting for the right time to generate valuable insights can cost millions of pounds per year. This is not to say that an organisation must pick perfect data over actionable insights, both can occur at the same time. More importantly is finding a balance of improving data quality, while also using existing insights to drive strategic decisions.

Start using your existing data

Instead of waiting, executives should take action now to use their “imperfect data” to make better decisions. The reason to collect any data in the first place is to inform decision-making. So while achieving data perfection is unlikely, the most important data – sales or margin data – is available at most organisations, regardless of the company’s level of sophistication. This should therefore be a focus and priority for businesses looking ahead to 2017 as they anticipate how to drive actionable insight from existing data. Even in aggregated forms, sales data is all that’s needed to accurately answer one of the most important questions: How do consumers respond to a particular business initiative?

For instance, a company may trial a marketing campaign featuring a new product line or promotion in a subset of its network. While there are many data sets that could be valuable when evaluating this initiative (e.g., brand awareness scores, click through data, redemption rate, etc.), the only data needed to understand whether the programme is a winner is sales data and the details of the specific marketing initiative. While other factors can add colour to the understanding of why a programme may have been successful, currently available data, when analysed correctly, often generates millions of pounds in value immediately.

Instead of striving for perfect data, organisations should make use of the data available to them now. As well as adding value in the short term, this will let the business identify what is required to create a strategic approach and determine what other types of data is required. Here are a few key steps to accelerate an organisation’s journey to actionable analytics:

  • Don’t be a perfectionist when it comes to data collection.
  • Focus on gathering only the most important data first. Incorporating more data types is helpful, but it’s far too costly to wait on these additional data streams.
  • Put more data responsibility in the hands of business stakeholders. These stakeholders can identify which information will be most relevant to incorporate. The IT department will likely need to be involved, but not necessarily as the driver of the process.
  • Define your most important business questions and identify the metrics you will need to make a decision. This process will tell you which data elements are truly necessary.
  • Co-locate your primary data repository and your analytics platform. This strategy will streamline the data aggregation and analytics process while increasing organisational confidence in the quality of the data being used to make decisions.

Following these steps can push an organisation towards becoming truly data-driven in its approach. Ultimately, deriving value from the data that exists now will bolster the business case for collecting more data and refining data quality in 2017 and the following years. Collecting more or better data is valuable, but implementing highly profitable business initiatives is much more critical.

Rupert Naylor, Senior Vice President, APT
Image source: Shutterstock/wk1003mike

Rupert Naylor
Prior to joining APT, Mr. Naylor worked at Bain & Company, in London, Mumbai, Paris and San Francisco. Earlier he worked in Japan in banking for Merrill Lynch and in the telecom industry. Mr. Naylor started his career in the UK Government, including a posting at the Embassy in Tokyo.