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Data-Driven Technologies Face Their Biggest Obstacle: Culture

Data-Driven Technologies Face Their Biggest Obstacle: Culture

Why is it so hard to become data-driven? It’s well understood that data provides cold, hard insights as to what’s going on in the business. And data-driven initiatives are delivering the goods. Is it decision-makers’ resistance to being one-upped by a machine? Is it a lack of full trust in data being provided? Is it confusion about the solutions out there? What human factors are being missed?

Let’s face it — the technology available to wring insights from data these days is amazing. We can predict what a customer is likely to buy, and when they’re likely to bolt. We can see ahead in supply chain disruptions. We can foresee when equipment or machines will break down.

However, as with many things associated with technology, buying or building data analytics or artificial intelligence and dropping them into an organization won’t magically transform a business overnight. Developing a data-driven culture has proven to be a vexing obstacle. In fact, things seem to be moving backwards in terms of building an intelligent enterprise. What should a data-driven culture look like?

These are the issues explored in a survey of 85 Fortune 1000 executives conducted by NewVantage Partners, in which 92% say the “principal challenge to becoming data-driven” is people, business processes, and culture. Only eight percent identify technology limitations as the barrier.

Overall, companies took steps backward when it came to moving forward with data initiatives, the survey’s authors report. “All questions relating to the long-term progress of corporate data initiatives exhibited declines from 2019 and 2020 levels, a disappointing development. Less than half of companies noted success in these key metrics of progress: driving innovation with data; competing on data and analytics; managing data as a business asset; forging a data culture; and creating a data-driven organization.”

It’s notable that only 24% have created a data-driven organization, a decline from 38% the year before. In addition, only 24% have forged a data culture, down from 27%, and only 39% are managing data as a business asset, a decrease from 50%

A number of companies have brought in chief data officers to lead them through the woods, but even that doesn’t seem to be helping. “Many are still struggling against not just legacy tech, but embedded cultures that are resistant to new ways of doing things,” Randy Bean, CEO and managing partner of NewVantage Partners, writes in an accompanying article in Harvard Business Review.

To move faster on the journey to data-driven nirvana, Bean offers the following recommendations:

Identify how data analytics will be used. “We see firms that invest in data capabilities and technology without a clearly defined business demand failing time and time again,” Bean says. “By starting where there is a critical business need, executives can demonstrate value quickly through quick wins that help a company realize value, build credibility for their investments in data, and use this credibility to identify additional high-impact use cases to build business momentum.”

Pay more attention to where your data comes from and where it goes. Too often, the handling of data has been an afterthought for many business leaders. “Data must be managed from capture and production through its consumption and utilization at many points along the way,” says Bean.

Have patience. “Data-driven business transformation is a long-term process that requires patience and fortitude,” says Bean. Businesses need to stick with their “investments in data governance, data literacy, programs that build awareness of the value.”

Not all is downbeat with the survey results. Despite the headheads of trying to intill data-driven thinking into their organizations, the NewVantage authors observed a “notable increase” in companies reporting successful results from their big data and AI investments – a significant increase to 96%, up from 70% in 2020 and 48% five years ago. “This suggests demonstrable progress. This rise in achieving successful business outcomes is matched by an overall feeling of optimism – 81% — on the part of corporate data executives.”

So being data-driven works. It’s a question of getting everyone on board.

What do you think?

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