Is Effective Data Management a Key Driver of Business Success?
In our latest Executive Horizons survey, 89 % of respondents “totally agree” that effective data management will play an increasingly crucial role in the long-term survival of companies. But what are the main challenges facing organizations, and what are the key benefits for companies that get their data management strategy right?
The Key Challenges for Companies
For our Executive Horizons survey respondents the two biggest effective data management challenges are “having employees with the necessary skills to select structure and analyze the data available” and “collecting the right kind of data to address the specific challenges of the company.” To meet these challenges, it is therefore essential to build a data mindset into the very fabric of the organization. Employees not only need to be able to interpret and analyze data, but they also need to be able to step back and see how it fits into the bigger picture.
Another challenge is the speed of data growth versus the decrease of available storage space. Data is growing at a rate of 48.7 % annually, according to statistics cited by Information Age, and companies say that more than 50 % of their stored data is of an "unknown" nature. Shifting from a “save-it-all” mentality to a system that stores only relevant and valuable information may present a challenge to companies, but it will ultimately put them in a strong position to thrive in the long run. Organizations should do more than just store data – they should use it to accomplish business goals such as establishing a data-driven culture and collecting the right kind of data to tackle specific company challenges.
A further challenge that companies face is contending with the current shortage of highly skilled and talented data professionals. It can be expensive for a company to train data scientists or data analysts at the entry level. It can also be difficult for companies to keep up with the growing variety of big data sources, which can come from audio and video files, social media streams, email systems and many other places. In response, companies are looking to new technology solutions such as integration technology and data analytics software to build insights. More and more organizations are turning to AI - IBM's Watson, for example, already performs services for almost every data science task.
The Key Benefits for Companies
For the majority of our Executive Horizons survey respondents, the key business benefits of effective data management are “a greater understanding of their customers and the ability to target them more effectively” and “the ability to adapt products, services and business models to the changing needs and expectations of customers.”
The more customer insight you have, the easier it is to engage new audiences and connect with potential consumers. Being able to streamline and capitalize on the wealth of data available can therefore help organizations make more informed business decisions.
One company that has succeeded in gaining customer insight in order to create more targeted campaigns is Netflix. The video-on-demand service, which has 100 million subscribers, uses viewers' past search and watch data to suggest the next movie they should see. This type of data targeting can give companies real competitive advantage in highly competitive markets.
Effective data management can also help companies anticipate potential operational and reputational risks, before it is too late. In industries such as the financial sector, the ability to capitalize on data to identify, measure, monitor and manage risk is crucial. Singapore-based UOB Bank, for example, has developed a sophisticated data management system that can calculate value-at-risk in just a few minutes.
The ability to harness advances in technology and use data effectively will become even more critical in the years to come. Ultimately, companies that see data as a strategic asset will thrive, while businesses that ignore the data revolution run the risk of being left behind.