Research reveals many businesses missing crucial first steps to properly exploit data
Research has revealed that more than two-thirds of data management leaders say they have an effective data strategy and an effective approach to data cleansing and analytics, compared to around 10 per cent of laggards. However, there are as many laggards as leaders across most industries, revealing how many companies are falling short in data management. With research from CEBR[i] showing that the value to the UK economy of big data analytics and the Internet of Things combined could accumulate to £322 billion between 2015 and 2020, organisations are urgently seeking ways to overcome growing volumes and varieties of data to exploit its full potential.
The ‘Data Management Maturity’ survey, commissioned by SAS, surveyed 600 senior level business decision makers across UK businesses. The report scored organisations on their approach to data management based on three levels of maturity – advanced (leaders), average (mainstreamers) and basic (laggards). It found that data leaders are faced with the same obstacles as laggards, but are able to address them more proactively to benefit from data analytics. Lack of internal skills (38 per cent), lack of innovation (30 per cent) and relevance to wider business (31 per cent) are the top three obstacles leaders currently face. Nearly double the proportion of laggards are faced with the same obstacles. For example, 62 per cent are faced by a lack of internal skills, relevance to the wider business impacts 46 per cent and lack of innovation affects half.
However, the research showed that by having a clear approach to data strategy, data cleansing and analytics, three-quarters (75 per cent) of leaders have overcome the volume of data to gain maximum insight from data analytics versus only 44 per cent of laggards. For example, nearly seven in 10 leaders review their data strategy monthly (68 per cent) and are being rewarded with benefits, such as improved analysis (90 per cent), better decision making (88 per cent), stronger data value (88 per cent) and simplified analysis (88 per cent). Overall, 93 per cent of leaders agree that their data strategy allows them to innovate existing business processes through improved analytics. In addition, just over 9 out of 10 (91 per cent) are also investing in the right talent to drive it forward and have embraced it to the full with a defined vision to support their data strategy.
Hugo D’Ulisse, Head of Analytical Platform, SAS UK & Ireland, said: “Organisations that are benefiting from analytics look to the long-term and recognise the importance of continuously improving their data management strategies. Businesses need to focus on looking inwards at training staff, and our research reflects the UK government’s Digital Skills for the UK Economy 2016 Report[ii], which revealed that almost three quarters of large companies and almost half of SMEs are suffering from technology skill gaps, highlighting how the UK is falling behind other countries in innovation. Organisations also need to develop innovation and reassess how they are managing data in order to truly reap the rewards and get ahead of the competition.”
However, greater opportunity can also bring greater risks. Those leading organisations that are using analytics, recognise the risk implications of having more data flowing around the organisation. To fully embrace an effective data to decisions process, the right IT infrastructure and risk management policies need to be in place. Three-quarters of leaders agreed that the increased volume of data they collect has increased their risk as a business, and 90 per cent have increased the focus on risk management and planning given the increasing volume of data they collect. However, despite this increased focus, 59 per cent admit they “struggle to identify where the risk is greatest and where they need to be compliant.”
The research also delved into sector specific business needs.
- Compliance and security at the core of data strategies in financial services. Overall, nearly a third (32 per cent) of respondents in financial services claim their approach to using data analytics to generate business insight is very effective. Increased profitability (57 per cent), improved customer experience (54 per cent) and new revenue opportunities (50 per cent) are listed as the business outcomes that have been achieved from data analytics insights. However, in a highly regulated industry, 83 per cent admitted that regulatory compliance was one of the obstacles that they had to overcome to gain maximum value from data strategies in the last two years. A further 78 per cent admitted to increasing their focus on risk management and planning, with the threat of security breaches the biggest obstacle to gaining maximum value from data strategies for almost half (47 per cent) in financial services
- Budget constraints restrict the public sector. Nearly a quarter (24 per cent) of those in the public sector say their data strategy is very effective, but for 40 per cent the biggest obstacle to gaining maximum value from data strategies is budget constraints. Whilst a lack of strategy has been an obstacle that 67 per cent have had to overcome in the public sector, respondents recognised that the top benefits of data analytics are the ability to support improved strategic planning (76 per cent) and better assessing business decisions (73 per cent)
- Retailers need a clear data strategy to reap the benefits of business insights. Retailers are most confident about the effectiveness of their data strategy (32 per cent), with a quarter claiming their approach to using data analytics to generate business insight is very effective. The biggest benefits they are seeing include more accurate insights (82 per cent), improving the supply chain (79 per cent) and better assessment of business decisions (77 per cent). However, retailers have faced a variety of challenges including lack of innovation (77 per cent) and out-of-date processes and systems (77 per cent), with nearly half admitting that they are still plagued by too many users (48 per cent) and a lack of strategy (45 per cent)
For more information around the emerging trends and sector opportunities, download a full copy of the report.