How to derive value from the ever-growing reservoir of data is one of the most important considerations for business leaders across all industries. The benefits of effectively collecting, analysing and utilising data from sources like internet-connected devices enabled by the internet of things (IoT) are universally understood.
The business value that can be derived from these data sources can enable organisations to enhance productivity and increase efficiency, while cutting costs in a move to better understand respective market audiences – the implications for customer service are monumental. Data, ultimately, provides businesses with the ability to gain actionable insight that allows them to keep pace with growing competition, while creating new business models that are leveraged by data.
Indeed, data is paramount in driving innovation in an increasingly disrupted business environment. In the manufacturing industry, for example, data from various on-site devices can be used to generate augmented reality (AR) experiences that help manufacturers improve the quality and speed of the services they offer.
Monica McDonnell, director of strategic business development at Informatica confirms that data is a strategic necessity in driving business innovation: ‘Data today is regarded as a strategic asset and a critical ingredient for business innovation. As the currency for digital transformation, businesses that don’t innovate will die, so embracing and using technology to best use your data is hugely important.’
The benefits extend beyond the traditional organisational structure. Healthcare, for example, can be revolutionised by amalgamating data with AI systems like IBM’s Watson and Google’s DeepMind to not only diagnose diseases but prescribe treatments. It is evident, therefore, that the potential for deriving immense business and social value from data – via analytics and business intelligence – is huge.
Despite this knowledge, use of data from the growing number of sources is currently not the main technological driver of value. During PTC’s LiveWorx conference Eric Schaeffer, senior managing director at Accenture, confirmed this. He said, during a panel discussion at the event, that 70-80% of value is currently being generated by the digitisation of internal and external operations.
At the moment, he suggested, only around 1% of value being generated comes from a data source. Indeed, Mike Fish CEO and founder of BigData4Analytics, suggests that very few businesses, and departments within businesses are ‘using and curating their data as a “Corporate Asset” with a joined-up approach to analytics throughout the organisation. Even some of the large consumer products companies have vast quantities of data as well as subscriptions to every third party data source imaginable, but struggle to make sense of it all in a holistic way.’
>See also: Big data vs. privacy: the big balancing act
Other than digitisation, Ana Costa e Silva, senior data scientist at TIBCO Software, reveals another line of value creation that is currently being adopted by businesses: artificial intelligence.
‘The biggest move in the market nowadays seems to be that companies are incorporating AI directly into their operations. This involves automating those decisions that can be automated, whilst ensuring that an AI platform is continually updated with the changing dynamics that are relevant to a given environment. This is where machine learning comes in, as a branch of AI. Companies today are searching for creating value – either for customers or within operations – by adding AI across their businesses.’
The possible opportunities created by emerging technologies, like AI, and new business strategies, like digitisation, are immense. However, their impact on an organisation can be increased dramatically by tapping the currently untapped data treasure trove that exists both in and outside a business. At the moment there are vast amounts of untapped data sources that include; internal data, open (government) data and most significantly, IoT-generated data.
The value from data will not be realised until these sources are exploited, and in order to do this an internal culture shift within organisations needs to be adopted. The key lies in collaboration, specifically between the IT department and the board. IT can’t be treated as a separate function, but as McDonnell points out ‘the board is increasingly partnering with IT to understand the value of their data. As a result, we’re seeing new roles emerge, such as the chief data officer (CDO), and the chief technology officer, who are providing that bridge between business operations and data…The CDO has been created as a bridge between business and IT, and it’s a role that has tremendous potential.’ The role of the CDO, continues McDonnell, is vital in helping businesses create order out of chaos, or rather, turn ‘scattered data silos to a holistic enterprise data environment’.
The most valuable asset
There is a growing shift within organisations, whereby placing data at the heart of operations is seen as a necessity. Future enterprise endeavours are now based on data acting as the main source of value. Neil Sholay, Head of Digital at Oracle EMEA explains that ‘the past few years have seen a dramatic change in mindset as businesses have begun to view data as their most valuable asset’.
>See also: The UK’s top 50 data leaders 2017
This mindset, as Sholay describes, is being seen across all types of businesses. Organisations are beginning to understand the real, tangible value they can gain from an intangible asset – data. This is why, suggests Sholay, there are ‘more M&A and partnerships in the technology sector as major players look to add data algorithms to their playbook or collaborate with companies to develop end-to-end solutions for businesses’.
It is evident that the enterprise now considers data its main source of value moving forward. But extracting it effectively, in order to turn it into actionable insight, presents a set of challenges. The majority of data created, estimated at 80-90%, is unstructured. This refers to data that is not contained within some form of database. It is unorganised and difficult to manage, let alone analyse.
The sheer volume, if left unmanaged, can be costly in terms of storage and presents compliance issues. As GDPR approaches regulatory bodies will expect organisations to identify and access specific data sets within the organisation, or risk facing crippling fines. So, a crossroads develops: scale back reliance on data in order to reduce risk, or take the risk and utilise the data to innovate and move forward. It is not really a choice.
>See also: Royal Mail’s data journey
Big data analytics is the crucial tool, according to Chris Stanley, Vice President and Head of Data Management & Analytics for Europe at Virtusa, in taking this necessary data journey. ‘Big data analytics is the key to unlocking insights from vast tranches of data – it’s why almost half of businesses are reorganising themselves to exploit the opportunities big data provides.’
Crucially, however, without the right people to utilise these tools, any data-led initiative will fall flat on its face. Eric Fanton, managing director of Insync explains that ‘all the analytical tools will not help you if you cannot make sense of the data with a business perspective.’
Business-minded data scientists, continues Fanton, are required to make sense of the data so that it adds value to the overall business strategy. After all, as Caroline Carruthers, Chief Data Officer at Network Rail, expressed at Information Age’s Data Summit, data should not be used for data’s sake. The value gained from data should be seen in the advancement of the business strategy.
Data, with a reliable data foundation, has the very real potential to lead the transformation of business operations. ‘Entire industries are being turned on their heads by data-driven disruption,’ confirms McDonnell.
‘From finance to healthcare, massive changes require every business in every industry to fundamentally rethink core strategies. Business processes are becoming increasingly digital, and platforms (social, machine, services) standardise and pool this data to provide more context and insight into both individuals and populations.’
Data is the new oil, the most valuable resource available. Understanding it can enable new ways of thinking, and can help guide a business strategy to success. Or, as Stanley suggests, ‘redefine business operations entirely…It’s why industry giants like GE and Siemens now consider themselves as data companies.’
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