Deloitte Survey: Analytics and Data-driven culture help companies outperform business goals in the 'Age of With'
NEW YORK, July 25, 2019 /PRNewswire/ -- More than two decades after the term "big data" was invented, a majority of companies still do not have initiatives in place to create an analytics-driven culture, according to a new Deloitte survey, "Analytics and AI-Driven Enterprises Thrive in the Age of With: The Culture Catalyst." At the same time, the use of artificial intelligence (AI) and other advanced data-driven digital technologies are growing rapidly, as humans and machines collaborate (Loucks, Davenport and Schatsky, "State of AI in the Enterprise, 2nd Edition," Deloitte LLC, 2018).
The study, conducted in April 2019, examined 1,048 executives who work at large companies (501 and more employees) and interact with, create or use data. The goal was to see how many organizations fall within the top two "Analytical Companies" and "Analytical Competitors" of the five categories found in the Insight-Driven Organization (IDO) Maturity Scale. Finally, as we move into the "Age of With," a world where humans work side-by-side with machines and data coincides with actions, the survey also aimed to discover how organizations are currently using analytics and AI and what role culture and talent play in IDOs and data maturity.
"The results show there is a significant divide in how companies are approaching analytics. Many are finding that siloed initiatives, tools and specialized talent are not enough when applied independently," said Ben Stiller, principal and strategy and analytics practice lead for the retail and consumer products, Deloitte Consulting LLP. "To be successful in the 'Age of With,' companies must leap from being perpetual data 'dabblers' to becoming true analytics 'doers.' While the dabblers continue to execute informally disparate proofs of concept and pilots leading to minimum value delivery: The doers are systematically embracing data, adopting analytics, AI and automation; and changing the way work is done across the enterprise."
Today's business analytics landscape
Based on the IDO Maturity Scale, the survey found that fewer than four in 10 (37%) of executives believe that their companies are in the top two categories, and only 10% fall into the highest. While the remaining 63% are aware of analytics, they lack technology infrastructure, are still working in silos or are expanding ad hoc capabilities. In addition, 67% of executives surveyed are not comfortable accessing or using data from their existing tools and resources.
While 76% of survey respondents report that their analytical maturity has increased over the past year, most are still using traditional tools such as spreadsheets (62%) and business intelligence programs (58% combined). Sixty-four percent rely solely on structured data from internal systems or resources, eliminating insights from unstructured sources such as social media comments, product images and customer audio files. However, unstructured data can deliver a more comprehensive understanding of factors outside the organization that can impact business. In fact, the survey showed that executives who incorporate unstructured data into their approach are 24% more likely to have exceeded their business goals.
Culture is a catalyst (or culprit)
Of the 26% surveyed that use a single, common set of tools and methods across the enterprise for accessing and analyzing data, 80% exceeded their business goals last year. Adding to this, 37% of the companies with the highest level of analytical maturity on the IDO Maturity Scale, nearly half (48%) significantly exceeded business goals in the last 12 months.
This goes hand-in-hand with enlisting analytics champions: Executive sponsorship is vital to organizational change. According to the survey, the CEO is lead champion in 29% of organizations surveyed and those companies are 77% more likely to have exceeded their business goals significantly. They also are 59% more likely to derive actionable insights from the analytics they're tracking.
"It's clear from our research that organizations want to lead with advanced analytics, and the adoption of technology like machine learning only underscores their efforts," said Tim Smith, principal, Deloitte Consulting LLP and technology strategy and business transformation practice leader. "However, this willingness is not always matched with the ability to turn insights into action. Data science has to permeate company culture starting from the top to see true benefits."
Build an insights-driven organization
As companies continue to incorporate data in their operations, they must make business analytics a priority for all employees to exceed business goals. To create an IDO leaders should integrate culture, technology and talent to gain a competitive advantage:
** Culture: Companies should instill responsibility for analytics across the organization, regardless of job title or level, and enlist an executive sponsor, ideally the CEO, to spur change in mindset across management. In addition, to motivate employees to incorporate insights into everyday tasks, consider tying individual performance goals to meaningful use of analytics. This can be also be reinforced by executives who encourage trying and risk-taking even if failure occurs and reward a "fail forward" mindset within the domain.
** Technology: Expand tools to help incorporate both structured and unstructured data insights and implement a single master system for analytics across the organization. One dashboard that has a holistic view into all areas of the company will make it simple for employees to present information, make decisions and act on data.
** Talent: Eliminate the idea that only highly-skilled mathematicians or data scientists are the only ones responsible for business analytics. Spread accountability broadly and train all employees about the role of analytics in their respective jobs. In companies where all personnel have been educated about how to leverage data, 88% exceeded business goals, compared to just 61% of those with few trained employees.
All signs indicate that large organizations need to focus on business analytics to continue to grow and be positioned for success. However, most are hindered by their culture. Business leaders who deploy the responsibility of analytics more broadly and invest in an insight-driven culture will be poised to outperform their counterparts as well as be better prepared for the Age of With.
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The Insight-Driven Organization Maturity Scale
The five stages are: 1) analytics aware, 2) localized, silo analytics, 3) analytical aspirations, 4) industrializing analytics and becoming an analytics company, and 5) analytical competitor that uses analytics to manage performance and compete.
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