These are challenging times to be running a business, with digital disruption and political uncertainty around Brexit negotiations dominating the economic agenda. Yet behind the headlines, many business leaders are beginning to seize the opportunities offered by big data technologies as they prepare multiple plans for 2019.
A poll of 1,000 companies from the University of Sussex has suggested around one third of UK export firms have already seen exports fall due to Brexit, some by up to 30 per cent.
A recent poll we conducted as part of our Data Surge Report, showed 93 per cent of senior decision-makers in large and medium sized businesses expect to see a drop in revenue next year.
57 per cent told us they expect Brexit to trigger this decline, 22 per cent anticipated reduced customer spending, and 10 per cent thought the implementation of the General Data Protection Regulation (GDPR) would be an issue. What was most striking about the research was that only seven per cent did not expect a drop in revenues in 2019.
It is clear that challenges are on the horizon and that the business community is preparing to deal with them.
Despite the worries, we also discovered that many companies were positively bullish in the face of financial challenges ahead. Many organisations plan to significantly boost investment, with spending on IT ranking top by a significant margin. Our research showed that 59 per cent of businesses will increase spend on IT in 2019. Many (48 per cent) say marketing will also see an increase, and 46 per cent are planning to boost investment in sales. It is encouraging to see that in tough times, companies are prioritising tech investment above all else, an indication that digital strategies are now seen as crucial to company success at all levels of the organisation.
So why the focus on IT? Everyone knows that shrewd technology investment can save you money, but why should this area above all others receive such a major boost in a time of potential crisis? The answer, we discovered, lies in the increasing need for organisations to harness the power of data to drive the business forward. A staggering 96 per cent of company leaders told us they understood the importance of data as being critical to their organisation’s future. Indeed, many companies are already using data analytics to gain insights, make more accurate decisions and reduce administration and reporting processes.
The paradox with the data conundrum is that our research also found that one in 10 businesses are yet to implement a data strategy of any kind, and less than a third said they regularly conduct big data projects. Right now, it appears that companies are all too aware of the uncertainty ahead, investing in IT to overcome it, yet are far from prepared when it comes to using data to drive the business forward.
So how can organisations adopt a more proactive approach to data analytics and reap the benefits as we move into 2019? Interestingly, nearly three quarters (72 per cent) of decision-makers in our study claimed their company’s response to big data has been positive. However, when it came to identifying the tangible long-term benefits of data to reduce costs, only four per cent told us they recognise big data as a tool for reducing administration.
The fact is that growing volumes of information mean that many businesses will soon be hit by the data wave. Whether this will be the explosion of financial data, previously stored in spreadsheets, marketing data or insights into customer behaviour. This trend shows no sign of slowing and will only increase as digital transformation projects mature and become even more critical to business strategies and growth. Failure to acknowledge this trend will only make the problem worse, so the time is right to develop a robust data strategy for the business.
Unfit for purpose
The choice for businesses is clear. They can either sink in this information; failing to capture, store and analyse it, eventually leading to poor decision-making that could jeopardise the viability of the organisation. Or they can take action, and build a data strategy that can drive real value both to the bottom line and for decision-makers across the organisation. This decision to become either a data-enabled business or one that is at a significant disadvantage in comparison to the competition will be a crucial factor in the future of company success moving forward.
For example, far too many companies still rely on manual processes, often in the form of spreadsheets, to capture important financial data. This scenario often ensures that departments prepare separate documents, which then have to be consolidated and merged at the end of the month. Such systems are not only incredibly time-consuming, they are open to the risk of serious error. Just one edit from a member of staff could displace formulas or impact the quality of the information due to be reported. This in turn leads to errors, time-consuming edits and in some scenarios, inaccurate forecasting or reporting of revenue.
It should be quite clear to every organisation, no matter what the headcount, that these systems are no longer fit for purpose. With business intelligence and analytics tools easily available, replacing archaic manual systems can be a smooth process that brings instant quality to critical business functions and allows real-time access to edits and data trends. Stalling innovation around such an important business asset will lead businesses down a difficult path, particularly with the economic storm clouds clearly on the horizon.
With the significant majority of companies earmarking IT for major investment next year, the time has come for business leaders to truly recognise all the benefits of a smart data strategy. It’s not simply a case of improving accuracy and making better long-term decisions, it’s about reducing cost administration and improving critical reporting processes.
The big data wave is coming, and with the right analytics tools in place, companies can seize the moment and create a business fit for the future, one that is optimised for data-led decisions. Data is the key to unlocking innovation and value, and the sooner business leaders recognise this fact, the better.
Nick Felton, SVP, MHR Analytics
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