By Michael Queenan, Co-Founder and CEO of Nephos Technologies
When looking ahead to 2022, it’s not a technology trend I want to highlight but a people one, specifically within the data sector. There is a problem in the shape of a major workforce and skills gap that I think will drive significant change in this industry over the next 3-5 years.
Covid aside it’s interesting to look at how we have got to this, particularly when businesses are now realising the true potential of data – none more so than financial services. In fact according to McKinsey, “Economies that embrace data sharing for finance could see GDP gains of between 1 and 5 percent by 2030, with benefits flowing to consumers and financial institutions.”
The advantages of data hygiene
Firstly, the concept of driving value from data is relatively new and roles in the field such as Data (Governance) Officers have only really surfaced over the past few years. As a result, there aren’t many candidates with the necessary skills available in this space. Yet currently on LinkedIn for the UK alone there are over 4,500 job ads in this field. This means salary expectations are increasing by 25%+ for those that have the skills, which just increases the problem as larger companies can’t afford as many employees as required and small companies don’t stand a chance.
CEOs and CFOs are realising the need to drive the types of projects that can provide better customer insight, support new product launches and increase revenue per customer. Financial services has the opportunity to make informed decisions and improve services if data is collected and utilised the right way. However, in order to do this you need better data hygiene which includes analytics, governance and security.
The government’s National Data Strategy outlines its ambition to establish the UK as a world-leading data economy, specifically highlighting data skills as one of the focus areas to reach this goal. But data isn’t always seen as a ‘cool’ space to be in and even when it is, the younger generation tend to favour coding and engineering. That in itself will be a hurdle to overcome in the next 5 years in bringing those skills through the education process and maximising their value.
Organisations are quickly realising the challenge of managing data solutions with the existing operational teams, as they don’t have the required skills and in many incidents there isn’t clarity who’s remit this should even fall under. We are seeing more examples of companies getting fined for GDPR breaches, having personal data leaked or a combination of both which does not look good for shareholders, stock prices or customer retention. CIOs are therefore calling for these issues to be fixed, but it is not that simple if you want to ensure you have an effective process in place.
What’s the solution?
There are out of the box solutions available, but they generally require teams to manage and drive any real value. These are the people who don’t currently exist, which will mean that a heavy drive to automation, outsourcing and out-tasking expertise around data projects is the only way to go.
As there is also a shortage of providers in this space, there will also be an increased demand in “managed” data solutions over the next 3-5 years, where businesses use experts to help guide them on their data journey. Take cybersecurity, for example; five years ago there was a similar skills gap which is why most larger organisations now utilise managed services in this area – the data sector will follow that path.
The value of a Managed Service
Data regulations are getting tighter and pressure from C-Suite to address security is huge, so the natural solution is to get external help to operationalise the issues. If that external help can also provide a managed service to take the entire problem away and speed up the fix, then it’s an all-round win situation. Why take 18 months to achieve a project in just 6 months?
Managed data services will not take away the need for skilled expertise coming up through the education system or via re-training. What they will deliver is reduced costs, faster responses to compliance and a lifting of the operational burden which frees up teams for other activity.