Data is the language of business. Every enterprise speaks data and listens to data. Firms that hear the output and control the input are digital leaders, including the likes of Amazon, Facebook, Google and Apple.
Our respondents show a great understanding of this. Big data/analytics is the most frequently voted for (47 per cent) as a top five capability for investment. Not only that, but 58 per cent of respondents say they are beginning to utilize data-driven insight, which is starting to have a positive impact on time to innovation, but it is not yet a competitive advantage.
Moving to the next step has massive benefits. As a contributor to, and a by-product of, every decision the management of a firm makes, it is vital that data can be understood and retained. There are many potential missteps that firms can make in their efforts to achieve this.
For example, creating a “data lake” (in which a firm stores all data to create a unified picture across the business) risks becoming a “data swamp” if it is not managed effectively. Identifying which data can add value to a business allows the right prioritization of resource allocation. Here, judicious use of the cloud can offer a flexible approach to both storage and cost.
Our study reveals that companies are moving in the right direction in their transition to data-driven business models. Overall, over half of all organizations have begun the journey, reporting that data-driven insight is starting to have a positive impact on time to innovation. The next step will be developing this capability further and harnessing the power of data to achieve competitive advantage. While the general trend is positive, there are clear differences between industries in their adoption and maturity of big data and analytics.
At present, one in four manufacturing and aviation companies consider themselves to be achieving this advantage by successfully harnessing data-driven insight to deliver faster time to innovation. At the other end of the spectrum, 31 per cent of oil and gas firms are still in the planning stage, without the capability to utilize data-driven insight for innovation effectively.
However, the overall picture of progress is supported by 81 per cent having access to the right data to make successful business decisions today and plan effectively for the future.
The expectation of big data/analytics is also telling. It is seen as the most disruptive of digital capabilities – rated 7.2/10 by survey respondents – closely followed by automation, which is rated 7/10. However, the concentration of voting for automation is higher, with over 40 per cent rating it as 8/10 or greater. Broken down by industry, construction (48 per cent), aviation (48 per cent) and manufacturing (50 per cent) specifically rate automation as 8/10 or more in terms of its disruptive impact. On average, across industries, 32 per cent of respondents rate big data/analytics as 8/10 or more.
Not only is the existing level of data high, but the increased volume that is predicted as IoT rolls out will make big data/analytics an imperative for any digitally enabled firm.
The strength of technologies like big data and analytics is that they can wrap a product in a service, capability or offering, so that it cannot be compared on a purely commoditized basis with rival offerings. Providing capabilities by exploiting cloud services or analytics, rather than selling products, fundamentally changes the business model.
Not only are companies investing in the most disruptive capabilities, they are building the capability to handle digital disruption. Some 62 per cent of respondents see upskilling existing talent as the best way of doing this.
Maintaining alignment between a firm’s skills and technological capabilities should be a priority for senior management. Cultivating skills may not always be possible in-house. Firms should also consider working with commercial partners, universities and research bodies, or industry consortia. Third-party vendors – with experience across sectors – can also accelerate digital transformation, taking firms from digitally enhanced to optimized with minimal risk.