By Gaurav Dhillon, CEO of Snaplogic, Inc
Whether it’s customer, financial or employee data, structured or unstructured, from inside or outside the organisation, the modern enterprise increasingly runs on data. Thankfully for businesses, data is in no short supply, and they’re generating greater volumes of data than ever before.
Business leaders rely on data for a variety of business-critical applications; from informing business strategy, unlocking new revenue streams, and, perhaps most importantly, remaining competitive in a market where rivals are using data to do likewise. In recent research we conducted with IT decision makers (ITDMs) at large enterprises, improving business processes (64%), driving operational efficiencies and reducing costs (57%), and improving customer service (54%) were seen as key ambitions driven by their companies’ data.
It’s worrying then, that fewer than three in 10 (29%) ITDMs claim to have complete trust in their organisations’ data when it comes to making business-critical decisions like those mentioned above.
Given these important goals for data, the source of this data mistrust is worthy of attention. Around three quarters (74%) of our respondents believe that, despite their company having more data than ever, it’s struggling to make proper use of it, with a key cause being a lack of data sharing across the business. A staggeringly low 2% of respondents consider their organisation to be completely effective at sharing data, with siloed teams across the business often working with incomplete, inconsistent, or redundant data.
So what’s holding data sharing back in these businesses? The reasons for this are as varied as the data types their companies hold.
From a technological perspective, mismatched and inconsistent systems (42%), lack of integration (36%), and legacy technology (36%) are among the culprits. However, perhaps most worrying is that over a third (37%) feel their business lacks a coordinated data strategy, and over a quarter (27%) point to a lack of training around the importance of data sharing within the workforce.
With so much riding on data, why is the technological infrastructure, culture and strategy seemingly so unprepared for it? The answer, as with many business moves, is to follow the money.
Eyes Bigger than your Belly
The financial implications of better data utilisation have not been lost on companies. Our respondents estimate that, on average, annual revenue increases of $5,156,891 could be realised if they got their data in order. Given that current average annual investment in operationalising data sits at $797,537, that’s an impressive 547% ROI.
With numbers that large, it’s no surprise that businesses might act quickly, but not necessarily smartly, when investing in their data strategies.
However, if they ever hope to accomplish these ambitious returns, they’ll need to be more strategic with their investments rather than risk pouring money down a data hole.
Invest in Tech, Invest in Culture
With a lack of data sharing and technological limitations already identified as key reasons for data not being trusted to fuel valuable business insights, businesses looking to become truly data-driven could do a lot worse than invest in technology that facilitates better sharing of data. Tearing down siloes between teams and departments using cloud-based data integration tools can, in both the short and long term, make data more trusted, reliable and actionable for the business.
As businesses increasingly swell their data stores, integration will become increasingly important to sorting out the data disarray, so this should be an initial investment, rather than something for further down the line.
Technology is only one aspect of the data formula though, and the data culture of a business will either help or hinder how much value they can accrue from their data. Over a quarter (27%) of our respondents identified a reluctance within different departments to share data with the wider business. This will need to change if companies want to organise around data as they currently do around product-focused or customer-centric business models.
In the short-term, organisations might opt to create a centralised “Data Team” or “Department of Data” to see them through this transition. However, the future of data literacy is for it to be dispersed throughout the company.
Ultimately, businesses need to adopt a two-pronged approach to ensuring they’re making the most of their data. Rather than chasing the hyped-up valuation of data, they need to take a breath and focus on investing in the right technologies sooner rather than later, and breaking down barriers both technological and cultural that exist within the business.