From the coronavirus pandemic to the semiconductor shortage and the blockage of the Suez Canal, large-scale business disruptions are happening with increasing regularity. Meanwhile, all businesses across the UK are grappling with a different disruption — that of the significant and well publicised skills gap.
Digital literacy in the UK is particularly low, and demand for digital skills far outstrips the supply. A recent report by the UK government estimated that there are around 234,000 roles to be filled which require hard data and IT skills, and almost half of businesses (46%) have struggled to recruit for roles featuring those very same skills which are so essential to successful digital transformation projects.
Today, it is data, not instinct, that is the main driver behind business decision-making. The days where decisions are exclusively made by the person with the highest seniority in the room are gone. Data-driven insights play a role in every major decision, but the exponential year-on-year growth of data, and its growing complexity, mandates the need for a digital cartographer - a chief data officer (CDO) - whose role will be to help prioritise the dissemination of data to improve data access and use across the business.
Mitigating disruption through effective CDO leadership
Many companies struggle with digital transformation because they focus on the first word - digital. They mistakenly believe that simply adding new technology into a broken process will add value. It is the second word - transformation - that delivers real value, but it is also the bigger challenge. Transformation is inherently linked to the human element of change, requiring both departmental overhauls and experienced specialists to drive that change forwards.
The initial priority for CDOs in mitigating this disruption is to spearhead data democratisation across the organisation - empowering staff to deliver data-led insights and providing them with the right data tools to make that goal a reality.
By providing access to data and analytics through these platforms, the CDO can create space for employees who want to up-skill and become skilled knowledge workers themselves. Democratising access to these resources enables more workers to discover data-driven insights, which are key to driving better real-time decision-making across all functions within a business. This will empower these departments to respond successfully to disruptive events in the future and accelerate the company’s overall digital transformation.
The next priority is to drive a culture of up-skilling by educating workers and developing their data literacy. Providing technology that helps knowledge workers go beyond spreadsheets is the right start, but should then be supplemented with training, as well as encouraging data workers to ask the right analytical questions to enable digital transformation. Employees must feel empowered to use analytics for forecasting, anomaly detection and basic analysis in order to have a direct bottom-line impact and optimise business processes.
The benefit of creating this culture is that data-driven businesses can begin to up-skill their current employees to build their own internal pool of talented data workers with the skills, desire, knowledge, and analytical expertise to be successful. A McKinsey study found that 84% of executive leaders looking to increase their talent pool of data specialists saw disproportionate success when up-skilling their existing workforce. Just 16% succeeded when hiring externally.
Putting the data team to work
Once the CDO has created a culture of change, prioritising the addition of data skills across the business - a culture where analytical processes are equally as accessible as email - it is time to find a problem for the data team to solve. While most analysts will have plenty of use cases to automate and to which analytics can be applied, the team can also prioritise low-hanging fruit to go after. Consider which processes are less effective than they could be and how data analytics might produce results.
For example, imagine your company needs to automate Salesforce because it is having difficulty predicting the commission expenses for the sales team. If you can forecast what the sales expenses will be at the end of the quarter, it is much easier to calculate and project total expenses or operating margins. If you have invested in your data team and the right technology, this is a straightforward task. The team will be able to pull data from the right sources and produce useful insights that would not have surfaced otherwise because of the breadth and variety of the data.
The same approach can be applied to any department in the company. For instance, workers in the finance department are often stuck using outdated legacy systems. According to IDC, $60 billion is wasted every year due to data workers such as finance professionals spending hours buried in spreadsheets, manually inputting, sourcing and analysing data. However, by empowering these professionals and providing access to data science tools and modern analytics, the finance department can complete forecasts 74% sooner, make decisions 25% faster, and improve financial report accuracy by 16%.
Covid-19 has shone a spotlight on today’s data problems and the need for better, faster digital transformation. It has forced companies to take a closer look at their technological capabilities and approach the realisation that transformation must be moved up the priority list.
In order to future-proof business, the CDO is essential and the course must be set in advance. With this vital technical and human infrastructure in place, led by an effective and forward-thinking CDO, businesses will be infinitely more prepared to weather and react to the next crisis.
Alan Jacobson is chief data and analytics officer for Alteryx