Enterprises with forward-looking and well-honed data strategies will be able to navigate, and recover more quickly from, today’s turbulent economy than their less data-savvy counterparts. However, even leading tech-forward companies are struggling with ways to employ data resources to better reach their customers and markets.
These are among the conclusions of a survey of 500 executives, conducted in June by Longitude, a Financial Times company, in partnership with NTT DATA Services. The survey explored how the COVID-19 crisis has exposed vulnerabilities in corporate strategies. The research found that only 10% of respondents’ organizations are using data very effectively for digital transformation purposes. While 79% of organizations recognize the strategic value of data, their efforts to use it are hindered by challenges such as silos and skills shortages.
THE IMPORTANCE OF DATA ANALYTICS
Data analytics is playing a critical role in helping organizations pivot from disruption to digital transformation. However, only 37% of respondents’ organizations are very effective at using data to adopt or invent a new business model, and only 31% are using data to enter new markets.
The COVID-19 crisis has tested organizations’ ability to use their business data to act quickly and responsively to citizen and customer needs, the authors noted. Some organizations have been able to support customers in new ways, by providing capabilities such as contactless experiences and new digital apps to deliver improved customer experiences.
Data-savvy enterprises come out ahead when navigating uncertainty, the survey found. They are very effective at using data for improving customer experience (48%) and for delivering product innovation (39%)—all key to successfully navigating through a difficult economy.
USING DATA FOR TRANSFORMATIONAL PROCESSES
However, when it comes to some of the more transformational uses of data, the study found that businesses aren’t performing as well. For example, less than 40% are very effective at adopting or inventing new business models and driving new revenue streams.
It’s also notable that of the total sample of organizations, only 10% of them use data very effectively across three key transformational processes: adopting or inventing new business models, entering new markets, and selling data to third parties. The ability to use data in these ways will be critical to navigating the post-COVID-19 reality. Many businesses will want to adapt quickly and adopt new business models indefinitely as a result of their understanding and appreciating the value of their data.
A common denominator of data-savvy companies is a strong data governance culture, the study found. How organizations approach data governance is one of the key behaviors that could help them manage their data to get the most value from it—and ultimately set them apart from the rest of the competition.
CHALLENGES TO GETTING THE MOST FROM DATA
Even data-savvy enterprises face a range of obstacles as they try to get the most from their data, the researchers noted. These challenges stem from the same technical and human issues—data silos and leadership—that organizations have faced for the past 2 decades that continue to hinder agility and efficiency.
“Whether it’s been too difficult to implement, not the right time, or too costly, now is the time to bridge the chasm or risk falling into it,” the authors observed. “COVID has exposed the importance of solving these issues once and for all to support a data-driven strategy. For example, the COVID crisis has put pressure on companies to continue communication not only to their employees and customers but to their suppliers, as well—something made difficult with poor data quality and silos of disparate data.”