Every large company is witnessing a rising tide of digital data that not only resides in their information systems, but also in the ecosystem that surrounds them. This includes the data of suppliers, distribution channel partners, and other stakeholders. In the past few years, the sources and types of data have increased exponentially. In fact, in the last two years alone, 90% of the world’s digital data has been created. The US, on its own, produces an average of more than 2.6 million gigabytes of internet data every minute, a number that is set to increase as the world of connected devices grows1.
Despite this growth in digital data, research indicates that most enterprises are neither getting enough from their current data, nor preparing themselves to tap into the new data that will be available soon2. While they possess the technology to capitalize on their digital data, they lack the capabilities to draw insights from them. This includes understanding what customers want, why they buy specific products, what they like and don’t like, and how the company can improve the overall customer experience.
Widespread weakness: A lack of data maturity
The root cause of this problem is lack of data sharing within organizations. Companies also don’t take full advantage of the data that their business partners collect. What’s more, enterprises with immature data analytics capabilities operate in ‘data fiefdoms’, where pockets of insight-generating analytics benefit only parts of the organization.
Reversing the weakness: Generating game-changing insights
So, what is the biggest challenge companies face in obtaining crucial insights from the mounting digital data? If you guessed technological shortcomings, you are only partially correct. Cultural barriers have a much larger role to play here.
The few companies that generate game-changing insights from their digital data follow different modus operandi than the rest. They adopt a top-down approach -- their leadership team prioritizes data analysis and accurate insight deduction. They determine how insights from internal and external data can create new opportunities, assess their organization’s data maturity, and map out how to reach the target state. This includes determining how to circulate valuable digital data insights across the organization and this often requires eliminating cultural barriers that preclude such sharing.
Three untapped sources of digital data
Existing, siloed data: Companies often have data that provide immense value to one business function, but it is not always shared with other departments that could gain similar value from it. According to a survey conducted by market research firm Vanson Bourne, disconnected data leads to duplication of efforts and missed opportunities. Seventy two percent of respondents believed that their organization is missing out on opportunities because of data silos3.
Missing internal data: Companies generally capture data that is easy to control, which means a substantial amount is lost. Further, many companies outsource their business operations to third-party vendors who do not share the data effectively. These vendors may also lack the technologies to collect all the relevant data points.
New kinds of external data: The data marketplace provides an array of information that can provide tremendous value, if used properly. For instance, taxi service in India can identify restaurants where people eat. This information can be shared with restaurants and businesses to increase sales of products and services.
New types of public-private partnerships are evolving in this age of abundant data. The possible constraints are most often just imagination and will.
Five cultural barriers and one technology management hurdle
Inaccessible data: Most departments are hesitant in sharing data for fear of misuse or tampering. The shared data may also reveal computing mistakes, erase competitive advantage, among others.
Too many data choices: While some companies may possess the potential to tap into multiple sources of external data, it may be difficult to identify the most valuable source from the lot.
Privacy concerns: To make use of available data, proper consent needs to be sought, and compliance to latest regulatory norms can be tricky.
Poor data sharing processes: The process of sharing data in some companies may be too laborious resulting in hesitation to share.
Lack of direction from the top: Absence of cross-functional sharing of data can sometimes be attributed to a mere lack of direction from leadership. A strategic top-down approach to digital data maturity is all that is required.
The abundance of data can impose a heavy burden on computation, storage, and communication in data centers. Task assignment, data placement, and data movement further influence operational expenditure.
The barriers to valuable deduction of digital data insights are not insurmountable. Company leaders only need to impose a transparent process of data sharing across the organization, thereby liberating data from its silos and unleashing a workforce to gain crucial new insights.