While business leaders have long recognised the value of data to their organisations, most do not treat it with the same care they give to physical assets, according to new research.
Just 34% of IT executives polled for the Data Leadership Report, commissioned by consultancy firm Anmut, say their data is managed to the same professional management standards as other critical assets such as software, hardware and business infrastructure.
Those companies that do treat data as an asset can spend the majority of their data budget on creating value, the authors of the research claim, while the other 66% are primarily concerned with resolving issues.
“This is a big problem because it means most businesses are running on data that isn’t fit for purpose,” the report says.
How data underpins digital transformation
Successful digital transformation initiatives often require significant investments not only in the infrastructure that houses data but also the processes and practices that allow companies to extract the greatest value from it.
Energy multinational Equinor, for example, has put data at the heart of a digital transformation programme, which aims to create $2bn in additional value by 2025, reduce capex spend by 30% and opex by 50%. New digital initiatives helped generate $400m in cashflow in 2019, Equinor says.
Åshild Hanne Larsen, CIO and SVP for IT at Equinor, says all the projects in the company’s digital roadmap “depend on data to succeed” and deliver the value they have promised.
Back in 2015, it started working on Omnia, a data analytics platform that is now central to the company’s digitisation efforts. “Access to data is a key element in our entire innovation and transformation journey across the business, including the digital initiatives,” Hanne Larsen says. “We had to get our ducks in a row and create that central hub where data could be captured in one place.”
Speaking at a Virtual CIO symposium organised by New Statesman Media Group, Tech Monitor’s parent company, she added: “To accelerate this culture shift to data-driven insights, we have also focused on defining clear governance and data management principals, so that we can transform how the organisation treats data so that they view it more as a strategic asset.”
Better data management required
Anmut polled IT leaders from organisations with combined revenue of more than $1trn spread across five continents, and found many of these businesses are not treating their data with the same care and attention as physical assets.
Although 91% of those surveyed said data is critical to the success of their business, and 67% said their boards consider data to be a material asset, this is not reflected in the way it is managed. Just 34% of respondents said that data is frequently or always treated with the same standards shown to other assets.
Of those 34% of respondents, 67% say most of their data budget goes on creating additional value from the information they have. For the other 66%, this figure drops to 33% of the budget, with a larger proportion (47%) saying most of their money is being spent on fixing bad data, suggesting that if you manage your data well, it will bring greater business benefits.
What’s more, though IT leaders say they recognise the importance of data, it is overshadowed by tech in their organisations when it comes to attention and spending.
How to get the most out of your data assets
The vast majority (87%) of tech leaders polled by Anmut say being able to put a monetary value on data would help their boards understand it better. The authors propose a professional standard for handling data to match those which operate in other areas of business, such as ISO 55000, the international asset management standard.
While putting a monetary value on data is not always realistic, advanced analytics could help convey its importance in a different way. IT analyst company Gartner expects 75% of businesses to deploy AI in their data and analytics infrastructure over the next four years to deliver insights from a variety of complex business situations. Traditional data dashboards will be phased out and replaced by dynamic, customisable “data stories” allowing a visual, point and click exploration of the numbers and their significance, Gartner expects.
“To innovate their way beyond a post-Covid-19 world, data and analytics leaders require an ever-increasing velocity and scale of analysis in terms of processing and access to succeed,” says Rita Sallam, distinguished research vice president at Gartner.
For companies that value their data and can extract maximum insight, the benefits are clear. Equinor’s Hanne Larsen says its Omnia platform has grown into an ecosystem of apps that help teams across the business use their data effectively.
“From humble beginnings, Omina is now firmly established as the platform to realise data availability, compute and storage across Equinor – it has become a brand in itself within the company,” she says. “We’re proud of the journey and the foresight we had in designing this and also having it in production before our digital roadmap.”
Featured photo by WhiteMocca/Shutterstock.