Big Data can yield many opportunities to create value, from providing insight about your customer base to generating new revenue streams. With an organisation-wide strategy in place, it can also be used to support decision-making, improve management of working capital, and create new services around existing business models.
Yet research conducted by EY shows that few companies are taking full advantage of these possibilities. In fact, 32% of respondents said they were overwhelmed by data.
The survey of 270 UK-based senior executives revealed that while 81% of those polled agreed that data should be at the centre of decision-making, only 31% have restructured their operations accordingly.
Just 23% of companies represented in the survey have implemented an organisation-wide data strategy, limiting the potential to improve performance and efficiency. Instead of a unified approach, the majority tend to use Big Data to address isolated issues as they arise.
Respondents said that the main drivers that would encourage them to implement Big Data analytics in their organisation include an opportunity to understand customers better (chosen by 73% of those polled), to improve products and services (72%), to improve the management of existing data (47%), and to create new revenue streams (41%).
However, in practice, applications vary slightly. One-third of businesses use Big Data in their strategic decision-making, and 20% of respondents said their organisation currently uses Big Data to improve customer targeting. Twelve per cent reported using it to improve cyber-security, 18% to improve regulatory compliance, and 10% to detect accounting fraud. Eight per cent use it to optimise supply-chain efficiency.
Adoption levels are higher among larger companies, possibly as a result of their ability to make greater investments in the projects.
Barriers to adoption and implementation
The survey found that organisational culture is a significant barrier to the adoption and integration of Big Data. Other obstacles include underinvestment in the structures, processes, and controls required to support value-driven decision-making. Furthermore, 41% of respondents said a key challenge with Big Data was finding personnel with suitable skills.
Concerns about the implications for compliance and risk are further barriers to take up. Nineteen per cent of respondents fear that misuse of data would result in reputational damage to the company, and 44% think Big Data would exacerbate data security risks. Seventeen per cent expressed concern about the complexity of regulations and the risk of noncompliance.
Challenges and recommendations
The findings suggest that, although respondents are largely convinced of the potential benefits of integrating Big Data into their business models, there is a lot of work to be done if companies are to take full advantage of the opportunities and drive competitive advantage. The report identifies four challenges for organisations to address:
- Creating the right organisational structure and governance framework to support value-driven decision-making.
- Analytics security and compliance.
- Delivering actionable insight across the organisation.
- Developing talent needed to convert data into business value.
The report’s authors suggest that concerns about the quality of data, cited by 50% of respondents, arise because of a lack of ownership of the data or accountability for its quality. Some organisations have addressed this by assigning that responsibility to the chief data officer and promoting data as being equally as important as any other asset held by the company.
The report also recommends that senior decision-makers forge closer working relationships with the teams who deliver Big Data projects.
“Analytics is changing how organisations make decisions and take actions. Data by itself has limited value, but when managed as a strategic asset, data can change how organisations compete and win,” Chris Mazzei, EY global chief analytics officer, said in the report.
—Samantha White (email@example.com) is a CGMA Magazine senior editor.