More and more businesses are waking up to the importance of data as a strategic resource. Yesterday, research released by the Economist Intelligence Unit reported that 60% of the professionals they quizzed feel that data is generating revenue within their organizations and 83% say it is making existing services and products more profitable.
After surveying 476 executives from around the world, it found that those based in Asia are leading the way – where 63% said they are routinely generating value from data. In the US, the figure was 58%, and in Europe, 56%.
This makes it clear that businesses are finding more and more ways to turn data into value, but at the same time, the report found, many are hitting stumbling blocks which are frustrating those efforts. Just 34% of respondents said that they feel their organizations are “very effective” at being transparent with customers about how data is used. And 9% say they feel that they are “totally ineffective” in this area, which can be very detrimental to building the all-important customer trust.
For businesses that are built around customer data (or those which are repurposing to be so), customer trust is absolutely essential. We have seen that people are becoming increasingly willing to hand over personal data in return for products and services that make their lives easier. However that goodwill can evaporate in an instant if customers feel their data is being used improperly, or not effectively protected.
The report states that ‘Big Data analysis, or the mining of extremely large data sets to identify trends and patterns, is fast becoming standard business practice.
“Global technology infrastructure, too, has matured to an extent that reliability, speed and security are all typically robust enough to support the seamless flow of massive volumes of data, and consequently encourage adoption.”
It also goes on to suggest that more and more businesses, taking cues from online giants such as Facebook and Google, are positioning themselves as data-first operations, built entirely around data collection, analysis and redistribution – as opposed to simply using it as a source of business intelligence.
59% of respondents said that they consider data and analytics to be “vital” to the running of their organizations, with a further 29% deeming it “very important”.
The increasing availability of cloud processing, analytics and storage services has undoubtedly opened the floodgates in terms of making Big Data driven analytics accessible to businesses of all sizes across many industries. But I feel this survey also backs up warnings that I, and others, have been voicing for some time. Data, particularly Big Data, is an almost infinitely empowering asset – but its use can be limited, or it can even become a liability if it isn’t backed up by a robust (and regulator-compliant) strategy.
Interestingly, just under half of those surveyed (47%) say that their data analytics is limited to data they have collected themselves – through internal processes, commercial activity and customer services. I would expect this number to shrink in coming years, as more and more organizations become accustomed to adding data provided by third parties such as data wholesalers and governments into the mix.
Another statistic which stood out to me was that 69% feel there is a business case with their companies to set up a dedicated internal data and analytics unit, with the purpose of exploring new ways to add value through data projects. This is probably driven by the fact that 48% feel that their organizations have, in the past, failed to take advantage of opportunities to capitalize on their data. I fully expect to see dedicated data teams and working groups become an increasingly vital piece of corporate infrastructure over the next few years, well beyond industries such as tech and finance where they are already commonplace.
Overall, it seems businesses are fairly confident about their ability to keep our data safe – with 82% saying that their data protection procedures are “very” or “somewhat” effective. However, we know that large scale theft of customer data from corporations is an ever-growing problem. Executives at organizations hit by this type of crime recently – such as Anthem, Talk Talk and the US Government – were presumably fairly confident that their systems were safe too – until they discovered that they weren’t. The report also makes it clear that data breaches are certainly not limited to the high profile incidents that receive coverage in the media. In fact, fairly shockingly, 34% of respondents said that their businesses had suffered “significant” data breaches within the past 12 months.
The EIU report, which can be read in full here, makes it clear that adoption of Big Data driven strategies has come on in leaps and bounds during the last year. However it is also equally clear that there is still a long way to go until every business is secure enough in its infrastructure to transition to a fully data driven business model.
This article was written by Bernard Marr from Forbes and was legally licensed through the NewsCred publisher network.