Having a well-defined data strategy drives financial performance ahead of peers and the more data which is put to work, the greater the chances of success with a big data initiative.
That is according to 35% and 38% of UK respondents in a SAS research programme which was conducted by the Economist Intelligence Unit. Despite this, 34% of UK executives believe they have little or no capability for using data to open up new markets and 31% can’t use data to speed up market entry. A further 25% are challenged by using data to develop new products and services.
This picture of UK plc and its data capabilities is both interesting and nuanced since it comes at a time when adoption and deployment of data and analytics is accelerating. When SAS ran the same survey in 2011, only 19% of companies in the rest of the world claimed a well-defined data management strategy. That has grown to 34% now, but the figure for the UK stands at 26%, somewhere in the middle of the cohort. More worryingly, while 24% of companies worldwide are making data sharing for decision-making a priority, only 16% of firms in the UK have the same view.
“It is very noticeable that there has been progress, but there is a large amount to be done,” Mark Wilkinson, region vice president, Northern Europe, at SAS told DataIQ during a debrief of the research. “Those who have adopted a very strategic approach have seen their financial performance improve significantly as a result of their use of data to develop markets and differentiate themselves from their competitors.”
Wilkinson acknowledged that, “a lot of companies have not made the progress they would like.” Data volumes appear to be one of the reasons for this, with the number of respondents saying they had so much data that they struggled to make sense of it tripling from 8% in 2011 to 24% now. In the UK, 17% mentioned this as a barrier. One real surprise is that while 16% of laggards in the survey blamed data volumes, so did 27% of leaders - the very group who might be assumed to have solved the issue.
“There is a long way to go to and one of the keys is to prioritise sets of data that give the biggest benefit. When you have got more data than the business knows what to do with, time spent assessing what to prioritise is a good idea,” he says.
An important dimension to this data challenge is that different industry sectors face differing opportunities and obstacles in their use of data. As Wilkinson points out, the banking sector has to deal with pre-defined data sets which it must report on to the regulatory, making its data and analytics landscape less flexible, whereas retailers have a lot of freedom in which to capture, analyse and deploy data on both sales and customers. In the survey, 90% of UK companies said they were focused on improving business processes through the use of data - 88% named improving the customer experience.
“The exciting thing about most markets is that there is never going to be an end to the amount of data available,” notes Wilkinson. “That means companies have the ability to source that data and get right in the game. The level of both adoption and sophistication in analytics has risen dramatically over the last five years, he argues, with even the public sector having embarked on the same journey.
He believes one reason why UK firms are lagging behind the rest of the world in some aspects is down to a “wait and see” attitude in the early days. US businesses were quick to experiment with big data and were unafraid to adopt the new technologies it required, whereas there was a more conservative approach in British business. Now, it is Asia Pacific which is setting the running, creating even more competitive pressure on UK plc.
One area where firms in the UK are ahead is in the presence of a chief data officer (CDO) leading the corporate data strategy - 14% of respondents here have one in place compared to 9% globally. This seems to reflect a shift away from giving chief information officers this responsibility, with 34% in the UK handing it to CIOs compared to 40% worldwide. Among those enjoying highly-successful data initiatives, 41% say it is because the CEO is the main executive sponsor.
“Companies where the chief executive has a positive view of analytics enjoy a large advantage because they get to execute their data strategy. The explosion of data is changing the role of CIOs because they used to be focused on delivering the right technology to the business. With big data, they are engaging as change agents. In most cases, those CIOs are now working closely with a CDO,” explains Wilkinson.
One role which has yet to emerge with any great presence is the chief analytics officer, which had been forecast to break out from the new interest and appetite for predictive analytics. SAS has not seen many CAOs, although there is a growing number of heads of anaytics in evidence.
What is also emerging very clearly is the skills gap and the survey can be interpreted to show a level of blindness to the problem in the UK. Although only 20% of UK firms said they lacked the skills to use data effectively, compared to 24% worldwide, only 25% of UK businesses are actively hiring and training employees who understand data and the business. Globally, that figure is 31%, suggesting British business may not realise where it is lagging behind.
SAS has created academies in both the US and the UK to support existing data practitioners to upskill for the new big data world and also to transfer knowledge into the management class which sets them their tasks. But Wilkinson notes that, “everybody needs to do a beter job at encouraging candidates to study data science. It won’t be too long before somebody with a data science background lands a place on the board of a company - and it will not necessarily be the chief financial officer, it could be a new role.”
From the findings in the latest report, that seems likely to happen in the US first, with the UK following on several years later. In terms of performance in the use of data and analytics compared to the rest of the world, it looks like British companies score an improving B.