Helena Schwenk, Market Intelligence Lead, Exasol, explains why being able to process and use data can make a big difference to improving business performance.
More than three quarters (77%) of respondents in a recent survey of 1,000 IT Directors ranked data as their organisation’s number one most valuable asset.
Working for a company that provides an analytics database, you’d think that stat would be music to my ears and you’d be right (well partly at least). The fact that businesses are recognising the potential of data and the role it can play in improving business performance is fantastic progress.
However, it’s vital to remember that in itself, the data is not the be-all and end-all. Without the right strategic investments in people, skills and a robust, human-centric data stategy any organisation will struggle to derive any real value from its prize asset.
Noted author and data champion Caroline Carruthers talks about the concept of ‘data hoarders’. She believes that most businesses today have become preoccupied with wanting to get their hands on as much data as possible. However, they lack the in-house talent and skills to process and use that data; to the extent that the questions needed to improve data use are not being asked within organisations. The data is available but those without experience in data handling don’t know what they don’t know, so they can’t use it to its full value.
This inability to generate insights through the analysis of data can have a negative financial impact — something 72% of respondents in the previously referenced survey recognise.
The rise of the CDO
Addressing these people-centric demands has given rise to many new organisational roles, the most senior of which is the Chief Data Officer (CDO). A strong CDO can rapidly become one of his/her organisation’s most valuable business leader thanks to the rare skill of being able to both understand data and apply insights to business operations.
Over the last few years, the number of organisations with a CDO has seen a big spike. According to Forbes, in 2012 only 12% of Fortune 1000 companies had a CDO but by 2018 this figure had increased to 67.9%. The CDO has rapidly become integral to business processes and performance. KPMG finds that businesses with a CDO are twice as likely to have a clear digital strategy. Forrester states that a CDO is present in 89% of companies that have systematically harnessed data to improve their differentiation in the market and invested accordingly.
The value of a CDO is that they can drive the business forward on multiple departmental levels – advancing innovation, operational efficiencies and revenue growth – while bringing people together across the organisation, from HR and marketing to sales and finance. The CDOs breadth of expertise means he/she can develop a strategy and infrastructure that is built upon every department having access to the data insights they need.
It’s this data-driven, people-centric enterprise-wide approach that gives the CDO many business skills that many traditional executives do not have:
- The ability to see how core data can be used logically to improve business practices
- Selling the idea of change to stakeholders throughout the organisation (and them receiving it positively)
- Owning the implementation of the transformation to become a data-driven business
Human-driven data intelligence
In companies without a CDO it’s typically the CIO and/or CEO who own ‘data’. However, in something of a cry for help, Deloitte found that 67% of business executives do not feel comfortable accessing or using data from the tools in their organisation and feel they lack the skills needed to make insights actionable.
With C-suite roles already full of many varied responsibilities, it’s unrealistic to expect a CIO or CEO to easily get to grips with data. Organisations need trained data strategists to interpret data and recommend how to make the best use of it — not unskilled guess work.
The CDO can therefore play another key role in demystifying data and facilitating its use at a functional level. By making data less scary and more open, not just every significant decision-maker, but also every employee, can understand the value of data-driven strategies.
This new found data intelligence can ripple through an organisation informing business processes and efficiencies, for example allowing the marketing department to identify new customer demographics, the finance team to see new ways to drive economies of sale or the logistics team to find a new way of working.
Empowering people through data is the real way to drive truly meaningful business change.
