Enterprises are just scratching the surface of data-driven opportunities, and many simply aren’t ready to leverage their data assets to lead their markets. There are concerns about the security of sharing data between organizations, as well as identifying and building platforms to accomplish a data-driven infrastructure. These concerns may abate as data-driven partner ecosystems and benefits develop.
That’s the word from a recent survey of 255 executives conducted by MIT Technology Review Insights. The survey found that 45% use data for only basic insights and decision making—meaning that they are “in process” in terms of fully competing on data. That suggests the data economy is still a wide-open frontier, with a large number of organizations just starting to explore how data can boost their business. This is not lost on executives, 70% of whom plan to increase their investment in building and executing a data strategy over the coming year.
One of the most important steps to removing the barriers to successfully compete in the data economy is to eliminate or minimize the data silos that characterize many enterprise data environments. There is some movement in this direction. More than one-third (35%) of respondents say they are collaborating with partners to exchange data.
There are tangible benefits to engaging more deeply with the data economy. These include improved collaboration with partners, faster innovation, and increased revenue. Two-thirds, (66%) of those sharing data assets internally and with partners are experiencing improved collaboration with partners and vendors. The rise of the data economy also has deeper implications. A majority of executives (53%) effectively sharing data assets also say leveraging data is leading to the development of new business models.
Data-driven approaches also boost innovation, according to 52% of survey respondents. “Traditional companies are facing unprecedented pressure from their digitally native counterparts to innovate and respond quickly to evolving customer preferences and market trends,” the survey report’s authors stated. “By harnessing data from a wide variety of external sources, organizations can discover innovative approaches to designing products, delivering services—and even solving the world’s problems.”
However, obstacles stand in the way. Challenges to embracing data-driven opportunities include concerns about data security, platforms, collecting data, and complying with data privacy regulations. “Sharing data securely” is the top concern, cited by 24% of respondents. “And for good reason,” the authors pointed out. “Security risks such as data theft, data leakage, denial-of-service attacks, and technology vulnerabilities can multiply in shared environments. At the same time, companies must comply with mounting legal obligations to protect personal and confidential data.” Additional challenges cited were creating platforms to support data ecosystems (21%), followed by gathering, handling, and processing data (18%).
Corporate culture plays an outsized role in readiness to get on a more data-driven footing. The authors offered recommendations to address this, starting with assessing their readiness to take advantage of data-driven opportunities. “Many companies don’t have the ability to share data seamlessly in a secure way,” they stated. “To determine data economy preparedness, companies first ascertain whether they have the required information to participate in the data economy, possess the mechanisms to share data, and can measure the economic value of monetizing their data.”
Opening up the organizational structure is part of the formula for employing data for greater insight and decision making. “The technological framework needed to share and commoditize data is an IT function,” the authors noted. “But, business leaders should be accountable for the value generated in a data economy. For some organizations, this cross-functional approach to data success requires training business leaders in best practices, including data visualization, governance, and quality.”