Not Waving but Drowning - The State of Data in 2015
0 likes285 views
The 'State of Data 2015' report reveals a growing recognition of data as a business asset, yet only 29% of organizations believe they are utilizing it effectively. Key obstacles identified include quality, strategy, and cultural alignment between leadership and data management, suggesting a cultural shift is necessary for better data application. The report emphasizes the importance of human elements such as collaboration and soft skills in optimizing data management strategies to enhance operational efficiency and drive business value.
Not Waving but Drowning - The State of Data in 2015
- 1. Not waving but drowning The state of data 2015 March 2015
- 2. The state of data: where are we now, and more importantly – where are we going? When we conductedour survey of business professionals, we set out to achieve three key objectives: • take a snapshot of the current state of the world of data • uncover some of the most pressing issues facing the Information Management industry • get a sense of what changes may be on the horizon What we found was enlightening, and in some cases, quite surprising. More than ever, data is the engine driving business. As recruiters specialising in the field of Information Management and BI, we know first-hand that the number of businesses across all sectors that consider themselves to be ‘data driven’ is growing every day. We expected to discover that robust, accessible, useful data is being harnessed for a myriad of purposes: operational improvements, increased understanding of customers, or positive business outcomes such as increased revenue. Instead, what we heard from survey respondents was jarring: only 29% believe their organisations are using data well, dropping to 19% amongst senior professionals. In an age where everyone knows that data is the new oil, where are we going wrong? We’ll take a closer look at this question, but one thing is clear: The rise of big data has been nothing short of revolutionary. But more is needed. A seismic shift in culture and strategy is required if we are to truly view data as an asset rather than a liability. And the shift has to start at the top, with more business leaders ‘getting’ data. Sales and marketing teams are already reaping the benefits, as a 360-degree view into customer behaviour is one of the most common applications for data. (Not to mention it’s a win for the consumer as well.) Whilst the use of data to improve commercial outcomes is coming into its own, it’s evident to us there’s a huge gap in using data to improve operational efficiency internally. We consider this one of the biggest areas of untapped potential as data adoption approaches maturity. What will the successful implementation of an IM strategy entail in the future? As many technology-driven trends as we may see emerging, the human element is more important than ever. Organisations need highly specialised employees who possess not only technical ability, but influencing skills and emotional intelligence as well. Overall, the survey confirms to us that any barriers to optimising the power of data lie not in hardware or software limitations, but in putting together a team that can collaborate to create value for your organisation. Mark Dexter ... Managing Director KDR Recruitment
- 3. We’ve got the data – why aren’t we using it well? With the majorityof survey respondents rating their use of data from ‘average’ to ‘poor,’ there is clearly a disconnect between the gathering of data and its application – or at least, there’s the perception of one. More worryingly, this is more true for senior management including IT Directors, CIOs and Heads of BI and Data. So where is this disconnect happening? What are the perceived obstacles to successful data application? Three strong themes emerge from the comments made by survey respondents: • Quality (Is the data clean, robust, reliable?) • Strategy (What is the data’s purpose?) • Culture (Are IT, Information Management, and the C-suite all on the same page?) We believe this to be the most critical issue the world of data is currently facing. Without meaningful analytics and application, data exists in a vacuum and will not help an organisation make better business decisions. Companies will struggle to quantify the value data adds, whilst the executive suite will lose confidence in KPI reports and business cases. The world of data is at a tipping point. Never before have we had such technical power to gather, process, and store data. The clear next step is making sense of it all, but to do this, Information Management and the executive suite must be aligned in their objectives. ‘Data is often an afterthought but needs to be central. Linking data to business processes (through both purpose and content) remains a challenge.’ Survey respondent PROBLEM SOLUTION QUALITY Decentralised data; unrestricted access Increased standardisation, governance and security STRATEGY Too much data Alignment of business objectives; focusing on agility rather than quantity; scalability CULTURE Lack of buy-in from management Knowledge sharing, influencing skills, realistic expectations Other respondentsSenior professionals% Extremely well Fairly well About average Fairly poorly Extremely poorly How well does your organisation use data
- 4. Using data to improve performance: what’s ahead? Overall, data ismost commonly being used to deliver insight around three areas: profitability, customer behaviour and cost of sales – not particularly surprising, given these are areas that present strong ROI for data infrastructure spending. Broken out by sector, we see some differences: • Retailers focus on customer data • Financial services are more concerned with costs and compliance • IT/software sector are leveraging data for new product development Fairly predictable, but it leaves us to wonder whether a narrow focus on one area could be restricting the ability of companies to truly harness the full power of their data. We see an opportunity here for employers to recruit from outside their sector to bring in fresh new perspectives. Sales and marketing remain the clear focus in 2015, as enterprises deploy data as a strategic asset to increase customer engagement and explore options for growth. However, it’s noteworthy that internal operational issues – such as the HR function, the supply chain, process engineering, fraud detection or inventory – trail well behind externally focused areas. Going forward, enterprises must make data as critical to operations as it is to sales; unlocking the untapped potential to improve efficiency in-house can contribute just as much to the bottom line. ‘Businesses are still developing their understanding around the power of intellectual supplier spend and market data. I tend to encounter a lot of businesses who have no consolidated supplier performance reporting. This means they don’t identify synergies, efficiencies or inefficiencies and don’t realise the benefits of consolidation or a complete strategic change.’ Procurement Director Hub Strategic Communications Understanding customer behaviour Understanding profitability Understanding cost of sales New product development Setting pricing To ensure legal compliance Monitoring competitor activity Managing staff retention Other Where do you use data to improve performance? 0 10 20 30 40 50 60 70 80 %
- 5. Where is data most used to improve performance by sector? Manufacturing 18% to measure profitability Retail 25% to understand customer behaviour Energy/ utilities 24% to understand customer behaviour Financial services 18% to measure cost of sales IT/software 20% to develop new products
- 6. Where should we be using data? Where data is being used vs where respondents think it should be used Between 50 and 60% of survey respondents are using data to understand customer behaviour and profitability but nearly 80% believe they should be. Of course, the two are linked in that better insight into your customers should lead to improved profitability, as long as those insights translate to product or service development, more compelling propositions and appropriate spend on most and least valuable customers. Many analysts struggle with the challenges of customer data whilst sales and marketing departments recognise the need for hyper- personalisation but lack the skills to implement such strategies. Those who are successful in this area are able to pinpoint the customer characteristics that lead to profitability (previous buying behaviour, original lead source, brand engagement and so on) and filter out the red herrings. They’ll then use this information to improve the customer experience, whether that’s as simple as using the communication channel of their preference or a game-changing new product launch. 0 10 20 30 40 50 60 70 80 % Current use Should be used Understanding customer behaviour Understanding profitability Understanding cost of sales Setting pricing New product development Monitoring competitor activity To ensure legal compliance Managing staff retention Other
- 7. Overcoming roadblocks calls for a change in culture What are thebiggest barriers to implementing an Information Management strategy? Whilst lack of resources or budget can be a matter of cost constraints, they can also be a result of the most common answer: lack of buy-in from the C-suite. The perception that management doesn’t “get” data is still prevalent, and in light of some of the comments left by respondents, we see evidence of a divide between IT and Information Management as well. All signposts point to cultural change as a key driver for data adoption going forward – the hurdles are not technological, but are centred around creating alignment of purpose and process among senior management, IT and data management specialists. These are gaps that call for increased investment, not in hardware or software, but in the human element. Enterprises must focus on creating a culture that places value on influencing skills, emotional intelligence, communication and collaboration in order to propel their data efforts forward and realise real results. CULTURE f “IT push back” f “IT think IM is bogus, that if it’s not technology, it’s not IT” f “No one understands the business requirements as they’re too broad to get your head around” SCALABILITY f “The size of the organisation is the biggest barrier” f “The complexity of disparate data in a diversified group” PROCESS f “Poor data quality is the biggest barrier to wide-scale adoption” f “There’s a disconnect between data process and understanding” Lack of buy-in from C-suite/leadership Lack of resources Lack of budget Lack of skills IM doesn’t understand business requirements Lack of buy-in from BI users Hardware issues Software issues Other 22.6% 20% 18.3% 11.3% 8.7% 4.3% 2.6% 2.6% 9.6% The barriers to implementing an informational Management strategy ‘An organisation that has successfully embedded IM strategy into its 5 year growth plan is Nationwide Building Society. The Executive Board acknowledged the need for a best-in-class IM function and made it one of their 10 building blocks for success. One of the benefits has been that customer- facing employees now get a complete and accurate picture of clients, allowing them to proactively suggest products that make sense for them.’
- 8. The Data Manager of the future A data managermust meet very specific, highly specialised technical requirements. But as is becoming clear, a truly robust organisation thrives on communication, teamwork, problem-solving and project/process management. That’s why enterprises are keen to build teams that can bring those values to the forefront, and are increasingly interested in a candidate’s soft skills. It’s a brave new world in which the old paradigm that power equals influence is being inverted – instead, as the traditional top-down management model gives way to a more lateral structure, those with influence will wield more power. The ideal data manager of the future is strong communicator, with a solid grasp of the organisation’s needs, sharp commercial acumen, and the capacity to comprehend big picture challenges – and visualise solutions. Where this falls down Due to this lack of communication skills, we see many organisations engaging external consultancies to build business cases for IM projects. The consequence is that the skills remain with the consultancy and aren’t transferred to the internal team. If this sounds familiar to you, consider how to include this knowledge transfer in your next scope of work. The importance of long-term vision We were interested to see a divergence in views on this topic. While 24% of respondents considered it the most important quality for data managers to have, 13% thought it least important. We found it worrying that nearly 1 in 7 respondents appear not to think data managers need to understand the context of their work and how it contributes to the organisation at large. By continuing to engage in recruitment practices that focus solely on technical skills, companies will miss out on the unlimited potential of their data efforts. Technical skills Data science Architecture Analysis SQL Big data Soft skills Influencing Long term vision Listening Questioning Adaptability
- 9. Optimising data quality – it’s not just about process Tighter controls, stewardshipand governance, clear methodologies and benchmarks – these are some common answers to the question “What can we do to improve data quality?” As might be expected, these types of answers offer valuable insight into process improvements that must be implemented in order to optimise data quality. Whilst quality control over the sourcing, input, processing and storage of data obviously will remain essential, it’s noteworthy that the two most effective ways to improve were not process-oriented, not technological in nature, but once again called for the human element. Engaging users is considered critical to the success of the data function, as is creating clear definitions of the business purposes of data. As we’ve said before, data is not just about gathering as much information as possible – it’s about using good information to inform business decisions that will drive your success as an organisation. Enterprises must ensure that valuable resources are being allocated in such a way that data is given the proper framework and context to drive results. This cannot happen without communication, consensus and collaboration from a team with a shared vision. When data is used well, it creates a momentum, one that will see more stakeholders on board with the concept that data quality should be the gold standard for the entire organisation, not just the IT and IM departments. These results clearly show that organisations are becoming more mature in their approach to managing data quality, but data professionals shouldn’t rest on their laurels yet, as there is clearly still some educating to be done. It is encouraging that people are realising that throwing money at the problem does not improve data quality and engaging the users of the data is now recognised as one of the most effective methods. However it is slightly disappointing that organisations are still not fully understanding the strategic value in implementing data governance/appointing a data stewardship function and it seems that the short-term tactical fix of cleaning your data is still more popular than it should be (as opposed to fixing the underlying cause of the problem). Nicola Askham The Data Governance Coach Engaging users of data Clear definition of what data is needed Tight controls on how data can be input Clean your data Use of a data dictionary Appoint a data stewardship function Ensure you have benchmarks for measuring change Being careful about the use of inputed data Investment What are the most effective ways to improve data quality? Rank 1 2 3 4 5 6 7 8 9
- 10. Software vendors: make it easy, or lose the sale In analysing oursurvey results, we didn’t see much to indicate that technological issues were behind any obstacles to successful adoption of a data management strategy. Nevertheless, we wanted to explore what those in the industry were looking for when choosing new information software. One thing became abundantly clear – new software must integrate easily into existing infrastructure and systems. This is far and away the most important consideration for users, who also want that same flexibility to extend to customisation options and reporting functionalities. Traditional standards such as pricing, the reputation of the vendor, and additional consulting services are deemed far less important in this new climate. This could be the result of a plethora of available products on the market, or a trend toward increasing budgets for data spend. Within the self-service data integration market, established players such as IBM with their PureData offering, Informatica’s Rev product or Microsoft’s Powerquery for Excel have the marketing clout to give the specialists such as Trifacta, Paxata and Matillion a run for their money. Whatever the technology choice though, without establishing and working within an IT led governance framework, you risk ending up with silos of data in a similar way that multiple versions of conflicting data are often found within most businesses’ Excel estate. Ease of integration Amount of customisation possible Reporting functionality Price Speed of integration Reputation of vendor Availability of external consultancy What is most important to you when selecting new information software? 50% 7.9% 7% 5.3% 12.3% 16.7% 0.9%
- 11. About the survey KDR created a survey of the UK’s business professionals across sectors and job functions, which ran throughout January and February of 2015. We received 124 responses, many of which were from high-profile influencers in the industry. Of our respondents, 34% were senior level (CIO, IT director, head of BI or data); 41% were other data professionals (data analyst, business analyst, data architect, modeller, project manager, developer); and 25% answered ‘consultant’ or ‘other.’ The seniority of respondents was reflected in their average salary levels, with 37% earning over £75,000 p.a, a further 25% earning between £55-£75k and only 8% earning less than £25k. Contributors were spread across industry sectors, with financial services (17%), IT/software (13%) and retail (11%) representing the largest segments. About KDR Recruitment KDR Recruitment are specialist recruiters for the Information Management and Analytics industry, supplying talent to this vital sector since 2003. We take pride in finding permanent and contract candidates with the right skills, relevant experience and cultural fit for any organisation. We believe in developing long-term relationships with our clients, borne out of a belief that chasing short term targets can lead to less than desirable behaviour amongst recruiters. Our company values are that we always act with integrity, deliver on promises, work as a team and practice active listening. We’re proud to work with some of the UK’s leading advocates of the use of data, including Tui Travel, Nationwide Building Society, Virgin Media, Dyson, Teradata and Barclays Wealth. Call 01565 651422 | Email enquiries@kdrrecruitment.com | Visit www.kdrrecruitment.com Sign up to receive our monthly newsletter here KDR Recruitment, Caledonian House, Tatton Street, Knutsford, Cheshire WA16 6AG © KDR Recruitment Ltd 2015