Organisations are spending millions to become data-driven, but many are failing to see the value of their investments
Many organisations claim to be data-driven but the truth is that most are failing to maximise their return on investment on data. Indeed, Gartner estimates that 97% of data sits unused by organisations.
This is clearly at odds with the huge investments in data teams and processes that organisations are making to secure an advantage in an increasingly competitive landscape. Research by Fivetran found that 98% of companies are using business intelligence (BI) and 71% plan to hire more data analysts based on growing BI teams over the next 12 months.
Guro Bergan, vice-president and general manager for EMEA at Fivetran believes the gap is down to a failure to extract value from an asset – in this case, the data. “Data teams are seeing a lot of investment. But are companies challenging themselves to ask, ‘what decisions is that actually helping us make?’”
This gap between intent and reality eventually could lead to conflict within the C-suite, says Bergan.
“In a few years’ time the CFO might turn to the chief data officer and ask, ‘What’s going on here? I’ve spent millions of dollars with your data team, your infrastructure, your architecture – but all you’re doing is reporting or data visualisation.’ The ROI simply isn’t there,” they explain.
“There’s so much data out there about customers, employees, the companies you work with, vendors – all of that data is wonderful, but only if you get value out of it.”
The power of data democratisation
Key to maximising ROI is empowering employees through data democratisation, argues Bergan. This means recognising that the power of data analytics is often best placed in the hands of those closest to the data.
“You’re not getting ROI if it’s only a small subset of people doing data visualisation. But if you open it up to allow other decision makers to use the data, you will start moving closer to a positive ROI,” they say.
“Organisations unlock their purpose when they have better access to data. It means they can do better, grow faster. It enables them to achieve all the key priorities they need to move forward.”
As a result, organisations should be providing data fluency training: teaching employees how to pull, manipulate and visualise data themselves, rather than relying on the data team.
There are also tools that make it user-friendly for all business functions to tap into the power of data.
Make data ‘as simple as electricity’
Another problem organisations face is how to harvest the enormous business value of all the various types of data siloed across the organisation. This, in many cases, is stopping companies fulfilling their purpose; they simply can’t get to the core intelligence they need to help them achieve their goals.
Fivetran says its mission is to make data as simple and reliable as electricity. The company will pull all data sources into one central location to provide customers with the ability to analyse it.
“It’s about trying to remove those silos because you can’t get anything done when the data is in lots of different locations,” says Bergan.
“It’s making it simple and easy to get to that intelligence, to get the information you need. And also making it reliable so you know that the data is always up-to-date, accurate and consistent.”
This is hugely important when you consider that only 9% of execs actually trust the data they have in their organisation, according to data from IBM.
“Think about the value you could unlock if you move the dial from only 3% of data in use to 15% or 20% or 25%. There’s a huge amount of value that sits in that,” says Bergan.
Nandos is one company that was able to unlock the value of its data. Together with Fivetran, it reduced the time spent moving data over to build campaigns from 80% to 20%. This freed up the data team to work on higher value tasks, while the integration of data sources delivered profitable new insights to the company.
Elsewhere, publisher Condé Nast was able to improve its data workflows so it can now pull data from pretty much anywhere and put it anywhere, providing a 360-degree view of its customers and gaining valuable insights into its audiences.
Don’t reinvent the wheel
Another reason why companies often don’t extract true value from their data is that their data teams try too hard to ‘reinvent the wheel’. For example, Fivetran research shows data analysts can spend up to a third of every workday just trying to access data. Ninety percent said their work was slowed by numerous unreliable data sources.
The problem is data professionals often focus their efforts on recreating solutions that already exist instead of focusing on the problems that are unique to their business, says Bergan.
“That’s the top 20% of value; that’s where business leaders will start to buy into what you’re doing in your data team because it’s customised and relevant to what they’re doing,” he adds. “ They don’t want their data teams spending time getting all of their marketing data into one place. They want them focused on whatever they want to know about their business.”
Ultimately, organisations need to embrace a culture of using and interpreting data, otherwise they will struggle to achieve the highest possible ROI on their data investment.
“It’s a data democratisation journey, not a data democratisation day trip. It’s not something that you do in a few minutes or a few days,” says Bergan. “This is a one- or two-year programme of work.”
Not just for enterprise
Solutions like Fivetran’s also lead to democratisation of the data itself. In the past, building data pipelines would have required a huge amount of investment and tended to be very customised. This meant they required a lot of time and effort just to maintain them.
“Having access to all this data used to be something that only really large corporations with a lot of cash flow were able to invest in,” says Bergan. “Now it is so much faster and easier – we’re actually democratising it for companies. That means smaller companies which don’t have access to that same investment are able to access the data, become more agile and see the same advantages as the enterprise.”
Q&A: How data empowers companies to fulfil their purpose
Q&A with Guro Bergan, vice-president and general manager, EMEA for Fivetran
One of your mission statements is that you believe ‘data empowers companies to fulfil their purpose’. What does this mean?
We all know data is key to unlocking enormous value for businesses. Yet when it’s siloed across the organisation, it becomes tricky to capitalise on the resource. If business leaders and analysts are unable to access data in its entirety, they will continuously fall short of reaching that core intelligence they need to achieve their company purpose.
To give you an example, customer retention is usually a top priority for any business. One indicator of this, the risk of customer churn, reveals itself in diverse ways for different departments – be that sales, marketing or finance – and if not seen in a holistic light, often goes unnoticed. Being able to access, operationalise and act on this data in a timely manner is key to fulfilling the company’s purpose and potential.
What’s stopping organisations from leveraging the value of their data?
The main obstacles organisations come to us to solve are dismantling data silos and centralising data. This means moving data from disparate sources – think email marketing software, ecommerce sites and social media – to a central location where it can be analysed. This process can require dozens, if not hundreds, of data pipelines to be built. At the start, companies will often employ data engineers to create bespoke pipelines, but as they grow they find manual build and maintenance becomes a futile endeavour in the face of rising data volumes.
Wasting valuable time on just getting the data, rather than analysing it for its intended purpose, is demonstrably eating into companies’ competitiveness and bottom line. In fact, companies spend, on average, half a million dollars every year on this ineffective process. Conversely, when organisations have the right data integration processes in place, they can reposition data engineers and analysts into the roles they applied for, transforming data into the intelligence it has the potential to be.
How can Fivetran help solve this problem?
Fivetran provides an automated data integration service designed to make access to data as simple and reliable as electricity. Imagine if you had to ‘configure’ a new phone charger or lamp before plugging it into the mains – this is sadly the reality of most businesses when it comes to data and this is where we come in. Fivetran’s pre-built data pipelines help businesses connect new data sources to the organisation without skipping a beat. Our technical engineers also take care of maintenance 24/7, enabling your data team to focus on value-added tasks such as analysis, reporting and building machine learning models.
The results our customers see are nothing short of brilliant. Having eliminated the burden of data centralisation, they can scale rapidly, democratise the access to data within the organisation and trust that any decision, made anywhere in the businesses, is backed by up-to-date, accurate and reliable data.
Can you provide any advice or best practice for a chief data officer looking to get more value from their data?
If data leaders take one piece of advice home from this, it should be: invest in your knowledge workers and in data governance.
The responsibility to investigate data doesn’t just lie with one team. It’s important that all stakeholders have access to the data that’s relevant to them and that they know how to get the insight they need themselves. Marketing, finance and customer success managers may leave valuable data on the table on a daily basis due to a lack of understanding. It’s the chief data officer’s responsibility to enable all relevant personnel to drive innovation.
Connected to this is the need for strong data governance, which is the process of assigning decision rights and accountability in order to properly manage and control how data is created and used. A successful chief data officer will work with their data governor to select the best tools that will help the organisation maximise the value of data, while ensuring compliance with ever-more stringent regulations. Focusing on these two areas will ensure that data democratisation and data literacy initiatives can go hand-in-hand.
For more information please visit www.fivetran.com
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