Study: Few Use Data to Improve Business Strategy

By Aliah D. Wright Mar 18, 2015
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“Big data” is more than just a buzzword for the many organizations that have leveraged their employee data to make their HR departments and companies run more efficiently. Yet according to a research report from Rosslyn Analytics in the United Kingdom, Data: The Art of the Possible—How to Create value from Your Different Data Sources, just 23 percent of business decision-makers purposely align strategy to data.

Additionally: “Our research shows that only 30 percent of business leaders explore data with a set question,” said Charlie Clark, chief executive officer of Rosslyn. “Understanding data is key to achieving data-business alignment, where data not only informs business strategy, but the business strategy also dictates the type of data owned by the organization.”

Research advisory firm Gartner estimates companies will experience an information crisis by 2017 due to their inability to effectively value, govern and trust their enterprise data.

This may represent a considerable missed opportunity, as a study by research scientist Andrew McAfee and professor Erik Brynjolfsson of the Massachusetts Institute of Technology shows that “companies that inject big data and analytics into their operations show productivity rates and profitability that are 5 to 6 percent higher than those of their peers,” according to an article in the Harvard Business Review. Both men co-wrote The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies; W. W. Norton & Company, 2014).

Harnessing all of the data that is out there may seem daunting, but it really isn’t—if companies first develop a plan.

“The missing step for most companies is spending the time required to create a simple plan for how data, analytics, front-line tools and people come together to create business value,” according to a McKinsey & Company article “Big Data: What’s Your Plan?

“Today, hardly any company sets off without some kind of strategic plan,” the McKinsey article states. “We believe that most executives will soon see developing a data-and-analytics plan as the essential first step on their journey to harnessing big data.”

Rosslyn’s research found that 44 percent of executives believed data was a strategic asset, with the report’s authors suggesting the importance of data has yet to be fully embraced by corporations.

“It’s shocking that most organizations continue to make decisions without data,” Clark said in a news release.

Other statistics identified by the research include:

  • 43 percent of respondents said the single biggest barrier was trying to figure out how to utilize data from far too many sources and of different types.
  • Poor quality of data was cited as the second biggest challenge to data being used within the organization.
  • Only 40 percent of respondents believe their organization effectively exploits its internal data to gain competitive advantage.
  • When asked to rate what type of data was most valuable to the organization, product data was considered, on average, the most valuable.
  • Customer data was rated as the second most valuable type of data; financial data and spend data were seen as the third and fourth most valuable, respectively; employee data was seen as the least valuable of the data categories.

Rosslyn Analytics’ report also details how data can be enriched to provide more value to a business.

For example, by combining financial data with other types of internal and external data, the answers generated can propel a company’s growth, increase profitability and help it to meet compliance standards. 

“Business leaders need to renew their efforts and focus on improving the accessibility and quality of data required to make informed decisions that are aligned to business objectives,” Clark said. “In today’s age of intelligent, self-service data technologies, there is no excuse for data not to be in the hands of every decision-maker.”

Aliah D. Wright is an online editor/manager for SHRM.

Related SHRM Article:

'Big Data' Offers Golden Opportunity to HR, Expert Says, SHRM Online Staffing Management, April 2014

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