It is clearly important to base your business decisions on valid and accurate data. Every year more and more companies are using data, implementing data governance initiatives, and benefiting from introducing a data culture to their business. Thus, it has now become best practice to instill a data culture in your business.
As of 2020, 50% of organizations worldwide are implementing data-driven decision-making. This is an increase of 12% in comparison to the two years previous (source Statista/Capgemini 2020).
There is still a long way to go before all companies are driving their decision-making with data but if your company does not have a data culture, why should you implement one, and what benefits will you see? Let us dive deeper…
Data culture is putting valid and accurate data at the center of your business, making it a core part of, not just IT, but also the mindset of every employee, with the availability of the data across all departments. This allows individuals, departments, and the business as a whole to make informed decisions based on data and not just gut feelings.
Despite half of the organizations having implemented data-driven decision-making, the establishment of a data culture is still in the initial stages of adoption. The percentage of organizations worldwide establishing a data culture has slowly increased from 2019 to 2022 and its trajectory is onward and upwards. This means, going forward, not establishing a data culture will put your organization at a disadvantage compared to those that have established one.
It is imperative that companies focus on implementing a data culture sooner rather than later as it can add significant value such as increasing revenue, cutting hidden costs, and improving productivity.
Two of the most vital roles in data and analytics activities are big data and artificial intelligence (AI) and many key factors have been driving investments in these areas in recent years. They can be categorized as either offensive or defensive. Offensive factors driving investments are transformation, innovation, and competitive advantage, while defensive factors reflect efforts to save costs and adhere to regulations.
According to Statista/NewVantage Partners, over the last few years investment in offensive factors has been reducing and, in turn, investment in defensive factors has been increasing.
In the past, data initiatives have focused on offensive factors but as part of your data culture, defensive factors must now, clearly, also be considered. While many companies are still primarily focused on the offensive benefits of investments, adding defensive factors to your strategy could be just what your data culture needs.
Data-driven decision-making has become important across many industries, but the banking industry still leads the way. It is important to note how industries such as insurance, telecom, life sciences and healthcare, and automotive all have rankings just above 50%, whereas energy and utilities, public services, retail, consumer products manufacturing, and industrial manufacturing all have between 43-48%. This proves that there is still plenty of room for the growth of data culture within all sectors but especially these latter ones.
And, despite its position as the leading industry, more than 75% of bank executives believe that outdated systems, data duplication, and manual processes slow down data handling, highlighting the need to invest in more effective data solutions (source Capgemini – 2021 PDF). Every industry and sector can benefit from establishing a data culture.
The advocation of data culture often comes from the C-level, or C-suite, such as the CEO. However, in 2021 Tableau/IDC discovered that 83% of CEOs still wish for their companies to become more data-driven. In the same research, it became apparent that this urge to become more data-driven was due to several important factors. Organizations with data cultures are more likely to use data in major decisions, daily meetings, their approach to work, and in support of their proposals.
Now, more than ever is the right time to start introducing, or refining, the data culture in your organization.
While CEOs champion data cultures, data and analytics leaders, such as chief data officers (CDOs) and chief digital officers, are often driving digital transformation initiatives from within. These initiatives will almost always go hand-in-hand with developing strong data cultures.
As of 2021, Gartner noted that 72% of data and analytics leaders were either leading or heavily involved in these sorts of initiatives.
However, their top objectives were still centered around data quality and data sharing.
Accurity takes data quality seriously having a dedicated solution as it is always an important part of any data culture. Recently we took a look at the latest data quality trends. In fact, if data quality improvements are your next milestone in establishing your data culture, download our How to Establish a Data Quality Management Framework whitepaper.
Data sharing in particular will become a key consideration in forming a strong data culture, with those companies doing so expected to outperform their peers across many value metrics as early as 2023 (source Gartner).
Businesses need to utilize technologies to help them achieve their business goals. The leading technologies are SaaS, big data, and AI/ML (machine learning), closely followed by the Internet of Things (IoT), robotic process automation, voice and wearable tech. Bringing up the rear, but still important, are blockchain, virtual reality, and augmented reality.
As most, or all, of these vital technologies will use and/or create data, having a data culture is paramount. Working with data and enabling that data to be used quickly, efficiently, and accurately are fundamental to data culture. Data culture needs to incorporate the company mindset, people, tools, and governance.
The rewards can be large. For data-driven companies that deploy strategies such as big data analytics, EBITDA increases in the range of 15-25% can be observed (source McKinsey – 2022). They also state “companies can get started with data-driven B2B sales regardless of their digital maturity and analytical acumen”.
Data culture starts with awareness, then leads to adoption, which leads to maturity, and finally reaches a level where you are leading the pack. But only 25% of those organizations that are on the data culture ladder are leaders (source Tableau/IDC).
Having a data culture results in many benefits including:
• Data-driven decision-making
• Real-time access to data
• Making data accessible to all employees and stakeholders (aka data democratization)
• Single source of truth (aka single point of truth)
• 360-degree view of a customer
If you’re interested in data culture, download our free infographic summarizing this blog post – go to our The State of Data-Driven Culture for Better Business Decisions download page to get it – no registration is required.
Find out the easiest way to define, monitor, and maintain data across your organization with the Accurity data intelligence platform. It is available on-premises or as SaaS, the latter of which is one of the technologies asserting the need for a data culture. If you are just starting on your data culture journey, we have many resources for you. If you are looking to adopt a data culture, why not schedule a personalized 1-on-1 demo of Accurity where one of our product analysts can assist you with adopting the right tool for your use case?
Sources for this blog post: Statista, Capgemini, NewVantage Partners, Targit, Tableau, IDC, Accenture, Gartner, Harvey Nash, McKinsey.