CEOs’ Rosy View of Data Initiatives, and Barriers to Data Access, Hinder Success
A new global study sponsored by big data analytics and marketing applications company Teradata Corp. has revealed an apparent disconnect between how chief executive officers see the current status and benefits of data initiatives and how lower-level managers see them. This and other disparities impede success and imperil the competitive advantage companies hope to realize.
"The survey is clear that organizations succeed when the data-driven vision and leadership are shared, and the benefits of data initiatives are consistently tracked, promoted and, most importantly, linked to corporate goals and business results," said Chris Twogood, vice president of products and services marketing at Teradata, in a news release.
The survey, conducted by The Economist Intelligence Unit, showed that data-driven organizations are more likely to outperform their competitors when it comes to profitability. However, only one in four companies gives financial rewards to those employees who readily adopt the use of data. Among the key findings:
- CEOs have a rosy view of data initiatives—Executives other than the CEO, and especially lower-level managers, see the current status and benefits of data initiatives far differently than the CEO. While 47 percent of CEOs believe that all employees have access to the data they need, only 27 percent of all respondents agree that they do. Similarly, 43 percent of CEOs think relevant data are captured and made available in real time, compared to 29 percent of all respondents. CEOs are also more likely to think that employees extract relevant insights from data—38 percent of them hold this belief, as compared to 24 percent of all respondents and only 19 percent of senior vice presidents, vice presidents and directors.
- Converting data into insights is still a struggle—Many companies have invested significantly in gathering vast amounts of data, yet they still struggle to extract insights, put them to work for the business, and create truly data-driven organizations. When it comes to capturing and disseminating important business data, 57 percent of respondents believe their company does a poor job. The issue is significantly more pronounced among underperforming, less innovative, and less technology-reliant companies. There is little disagreement that access to necessary data and ability to convert it into actionable insights are the greatest obstacles to data adoption and utilization.
- Data are unequally available even within data-driven and top-performing companies—Data are not equally available even within the most data-driven and top-performing companies. Two-thirds of respondents agree that some departments have much better access to data than others. This situation is particularly acute among companies with $500 million in annual revenue or more. While CEOs are less aware of the problem (only half agree it is the case), lower-level managers are very vocal about it. Eight in 10 senior vice presidents, vice presidents and directors agree that data are unequally available. At the same time, 42 percent of respondents find access to data cumbersome and not user-friendly, which further exacerbates the data-availability problem.
- There’s an abundance of internal data and a dearth of external customer and market data—Respondents reported an abundance of useful internal, daily transaction data. But external data like customer demographics, behavioral patterns and market data are less widely available.
"Opportunities for analytics are expanding every day," said Teradata chief analytics officer Bill Franks, in the release. "Transforming from gut-led to data-driven requires cultural changes and because companies are struggling in this area, they are missing opportunities."
The successful data-driven organization
Some clues as to why top-performing companies are more successful emerge from the survey: Among top performers—respondents who say their companies "significantly" or "somewhat" outperform in profitability—63 percent say data initiatives are launched and driven by their corporate leadership and 41 percent have a centralized data and analytics group responsible for introducing and implementing data initiatives. Of those who say their companies underperform in profitability, those numbers are 38 percent and 28 percent respectively.
There is also a high correlation between a company’s tendency to rely on data when making decisions and its profitability and ability to innovate. Data-driven companies are more likely to generate higher profits than their competitors reporting a low reliance on data. They are also twice as likely to report they have a culture of creativity and innovation. Access to data and quantitative tools that convert numbers to insights are two to three times more common in data-centric companies. And, they are much more likely to reap the benefits of data initiatives—from increased information sharing to greater collaboration to better quality and speed of execution.
Companies that outperform their competitors also are much better at extracting the benefits of data. Seven in 10 of them agree that information and knowledge is shared quickly and freely in their company, compared to one third of underperformers. Slightly more than half of the superior performers have seen better collaboration across business units and believe quality and speed of execution have improved, compared to three in 10 underperformers who believe quality and speed of execution have improved, and only one in four who say quality and speed of execution have improved.
- Hear how NCR uses data to quantify the best tools and techniques to maximize its margins (video).
- Hear how Siemens is using data from multiple sources (video).
- Hear how McCain Foods drives its business based on data and shares the information across the organization in a quest to double the size of the business (video).
The survey was conducted in the autumn of 2014. It reached 362 respondents: 47 percent from North America, 26 percent from Asia-Pacific, and 27 percent from Europe. Respondents held a variety of functional roles: 29 percent were in general management, while 16 percent were in finance, 16 percent in marketing and sales, and 14 percent in strategy and business development, among others. Fifteen percent of respondents were chief executives or presidents, 29 percent were in other C-level roles, 25 percent were managing directors, executive directors or heads of business units, and 31 percent were vice president, senior vice presidents, or directors.
Source: PR Newswire; edited by Richard Carufel