Effective data usage can help lead to big cost savings and faster, more informed decision-making. More strategically, it can uncover new insights into customer needs and desires, and help companies stay ahead of and adapt to changing market conditions. But many businesses are struggling with both internal and external barriers when it comes to making use of the ever-expanding amount of data flowing through their organizations.
The Business Reality Check, developed by The Economist Intelligence Unit and commissioned by American Express, recently identified effective use of data as a top business impediment among C-suite executives, a finding that is in line with broader market research.
“Data on its own is not that valuable,” says Brendan Walsh, executive vice president and general manager, global commercial services at American Express. “You can have all the data in the world, but if you don’t know how to analyze and understand it to produce insights, you’re not going to get any value out of it.
” Walsh’s experience working with customers of American Express’ commercial services business mirrors wider trends. “When we talk to CFOs and treasurers, they don’t want pages and pages of information. What they want is two or three tangible insights that will change the trajectory of their commercial payments programs for the better,” he says.
Taming the Data Deluge
Some of the biggest obstacles in converting data to insights lie within companies: 32 percent of executives surveyed cited sharing of data between departments as the top barrier preventing them from more effectively using their data. “There’s a big difference between the companies that are effectively and efficiently leveraging data and making strategic decisions, and those that simply have a lot of data,” says Walsh.
Smart data usage can translate into more effective revenue growth and cost control strategies, driving bottom line results. In many cases, data is still siloed, or stored in incompatible formats or systems. A business’s culture may stymie sharing as well, if data is viewed as proprietary. Departments may also be tracking different data or interpreting it differently from their peers.
Technology, such as artificial intelligence, machine learning and blockchain, can help streamline data sharing among disparate groups. But sorting through potential technological solutions presents its own challenge. Innovating in response to data was the second biggest obstacle to effective data usage, cited by 30 percent of respondents. That’s not surprising, given the top-level challenge of keeping up with the pace of technological change uncovered by The Business Reality Check.
Businesses also face external challenges when it comes to data, such as meeting the shifting expectations of their customers and maintaining their trust—two barriers that were also highly cited by respondents. In an age when consumers can look at a personalized information feed, order something online and have it delivered within the hour, the bar is being raised for customer experiences.
Personalization and speed are highly prized.
Security is also top of mind these days. “Businesses cannot ignore or be oblivious to the importance of data security and governance,” says Walsh. It’s not just consumers. Businesses, too, are demanding the same.
Breaking Through the Data Barrier
Business executives are taking a number of steps to address these barriers and to make better use of data: Almost half (49 percent) of those surveyed said they are working on improving internal collaboration. According to Walsh, that process starts with focus and consistency.
“Ensuring people are seeing the same information in the same way is what’s going to drive a more collaborative environment,” he says. While diversity of thought and perspective can lead to optimal business outcomes, it is important that data is being analyzed consistently. When companies are clear on what data they want to measure and why, they can analyze a smaller set of data for rich insights, without spreading themselves thin, he adds.
Companies are also investing in software (46 percent) and hiring talent (43 percent) to improve their analytic capabilities.
That may include AI and visualization software, which Walsh says can help glean insights and drive operating efficiencies, as well as attracting talent with the right combination of understand data and human behavior. The key, says Walsh, is visualizing the data in the right way.
That means “bringing it to life for people in a way that is simple, easy to digest and intuitive, which will allow more people to easily interpret it to make the right decisions for their businesses,” he says.
Companies also must be proactive in providing secure, accessible and timely information for customers.
Customers are only facing a need for increased and improved use of data. By investing in the right technology, people and practices, companies may be able to tame the data deluge and deliver valuable insights.
Some opinions expressed in this article may be those of a guest author and not necessarily Analytikus. Staff authors are listed https://businessrealities.eiu.com/
