To survive in today’s hyper-competitive environment, businesses need actionable customer insights, faster product innovation, and disruptive business models. The key for those racing ahead revolves around three As: data that is accessible, analyzable, and actionable.
A new Harvard Business Review Analytic Services Pulse Survey of more than 700 business leaders, however, shows that the majority of enterprise organizations aren’t racing ahead. They’re still living in the past, with one-third currently operating on static and backward-looking reporting. The three top organizational barriers holding them back from a data-driven future?
- Organizational silos
- Legacy processes
- A lack of data analytics skills
The HBR-AS study, An Inflection Point for the Data-Driven Enterprise, clearly reveals a digital divide between what organizations know is important for future survival and where they are now:
- While 86% of organizations responding say the ability to extract new value and insights from existing data/analytics applications is very important, only 30% are very effective at doing so
- While 75% say it’s very important to deliver actionable intelligence to employees across the enterprise, less than a quarter of organizations (24%) are able to achieve this
- Only one in ten organizations currently say they have embedded data and analytics into all processes and decision making, and even fewer have advanced to predictive analytics or automated decision making
- Just 28% of organizations are focused on new business model creation using data, which is the key to digital transformation
Analysts and influencers interviewed for the report, including Constellation Research Founder and Principal Analyst Ray Wang and analytics and digital transformation influencer Ronald van Loon, say companies that want to stay on the right side of digital disruption need to move fast and get serious now about their data and analytics efforts.
Constellation shows that digital business models are creating a winner-take-all market with digital leaders taking approximately 70% of overall market share and more than 77% of profits. “This is a top-down strategic business model decision that boards have to address,” notes founder Ray Wang. “Boards aren’t doing their jobs because they don’t understand the problem: they’re in a data war, and data is the weapon.”
The Disrupting Digital Business author warns that, “every board member and CEO needs to understand that data assets have to be managed the same way they manage any other asset. If they don’t, they will be disrupted.”
This charge for organizations to get their data house in order also includes a roadmap for technological and organizational evolution, and very importantly, an end to siloed approaches, according to influencer Ronald van Loon.
“Companies often start with front-end applications, and they are able to make some first steps,” says van Loon. “But it’s not the right route to get long-term results.” Companies may implement new data and analytics systems in certain customer-facing departments, but such siloed solutions won’t yield enterprise change.
“If you want to manage real transformation, you need to have a proper end-to-end data management, data security, data processing platform company-wide,” van Loon says.
The study also notes that organizations may have to take a step back to reassess and realign their data and analytics efforts to move ahead and truly become an Intelligent Enterprise. “This is not a revolution, although it looks like one because the pressure is so high,” says van Loon. “It’s a step-by-step approach, and it needs to be long-term and consistent. Companies must focus on the customer, create organizations that are flexible enough to adapt to these changes, put in place a platform to manage data, and have a clear view on strategy.”
To read all of the Harvard Business Review Analytic Service report, An Inflection Point for the Data-Driven Enterprise, download a complimentary copy.