Business leaders agree that digitalization is changing their commercial models and creating unique opportunities for growth. The vast majority of C-level executives in our global study (87%) say that data has greatly disrupted their organization’s operations over the last 12 months. Despite the obvious value that data can deliver to businesses, we see that many are struggling to put their data to good use. Organizations large and small are dealing with a deluge of information that is putting a critical strain on existing processes for managing and governing data.
Listen to this webinar to learn about key findings from our unique global research study of more than 1,000 data practitioners. You'll walk away with a better understanding of the challenges and opportunities in the data management and data quality markets, including:
Hi everyone, thank you for joining us on today’s webinar “Leading in the digitalized economy: Trends in global data management practices.” My name is Jenna McAuliffe, and I help lead our thought leadership program here at Experian. I’ll be moderating today’s webinar. During this session, we are going to talk about a subject that is very relevant to many of our businesses. That is how DATA is becoming an increasingly critical component to the digital ecosystem in which our businesses participate. Of course, how you MANAGE and GOVERN that data is a large part of that conversation, as our practices in these areas ultimately help us to keep pace with the quickly evolving market.
On the line with me, I have Erin Haselkorn and Sean Coombs from Experian’s data quality and data management business. Erin leads our global analyst relations and market insights programs, and Sean leads global market research and thought leadership programs. Thank you both for being here.
On the next slide, you’ll see the agenda for today’s session. At a high level, we’re going to discuss some findings from our annual global data management benchmark survey, which center around the themes you see here. First we’ll cover off on how data continues to drive business priorities. Next, we’ll discuss how the growing demand for data is creating new challenges for organizations. After that we’ll talk about this question of “who owns the data,” which is quickly becoming an inflection point for many businesses. And, lastly, we’ll cover where we see data-related investments in the next twelve months.
We will save some time at the end of today’s webinar to answer some questions, so please feel free to submit your questions using the Q&A box on your screen.
With that, I’d like to hand it over to you, Sean, to get us started.
Thanks so much, Jenna. I am very excited to be here today to share some interesting findings from a global study I recently conducted. But before we jump into the findings, I wanted to talk about the study itself to give you some background. Each year, we conduct a global survey of data practitioners to ask them a series of questions around data management practices and trends. Some of the questions are unique to that year’s study while about half of them are repeats, which give us nice year-over-year comparisons.
So about six months ago, we surveyed a thousand data professionals from the four countries you see here: the US, UK, Australia, and Brazil. Among those we spoke to, almost a quarter work in an IT-related sector, 16 percent were from finance/insurance/accounting, 12 percent from retail, and so on… As you can see it’s a pretty diverse population. And when it comes to these folks’ level of seniority, 17 percent were C-level and about 71 percent were either at the director or manager levels.
So now that you have a little background on the study itself, I wanted to talk about this concept of “digitalization,” which is a big topic of conversation lately. Regardless of the industry vertical you work in--from education, to finance, or retail—I think we can all agree that digital processes are having a big impact on the way that we do business. They make us faster and more efficient in what we do, allowing our business models to scale much more quickly. But this drive for digitalization also comes from our customers' expectation that our products and services will be available to them in real-time and across all their devices, including mobile.
It goes without saying that the era of digital transformation is starting to define business priorities. And, underneath it all, organizations are looking to their data as a driving force underpinning these priorities. On the slide, here, I wanted to share some high-level trends that we are seeing in the market. The first is that business priorities are driving significant changes in data management strategies, and customer experience is starting to take center stage. Whether it’s looking to make customer interactions a little more seamless or to better personalize the experience, organizations are looking to use their data to increase the loyalty and retention of their customers.
Despite the needs around data, our research is showing that current data management strategies are simply not good enough, or rather, they’re not able to scale with the growing demands around data. So as the volumes and variety of data continue to grow, it’s putting pressure on organizations from an operational standpoint; which is only exacerbated by the growing pressures from the business to have access to that data for real-time decisioning. As these processes continue to hinder digitization progress, we are seeing organizations struggle with demands around data transparency and governance—a particularly important topic in light of the recent GDPR regulation. And when you consider that many organizations today are unable to define who owns their data (whether that’s the business or IT), it’s clear that there’s much to do.
Lastly, our research is showing that organizations are now beginning to change their data management priorities and they’re starting to look for new things in the tools they purchase—like the ability to enable business users….
On the next slide, you can several key findings from this year’s study. As we delve into the data at a high level, it becomes clear that digitalization is starting to rock the boat a little. More than three quarters of the C-level executives we surveyed say that data has greatly disrupted their organization’s operations over the last twelve months….. That’s huge when you think about it—that data is really starting to upend business models and challenge the status quo. Often this creates opportunities for growth.
Further to that end, 90 percent of C-level executives believe that data is integral to building their strategies. So when it comes to actually planning business initiatives to keep pace with digitalization, we’re seeing an increased reliance on data assets by executives. And what are they focusing on? As you can see here, 60 percent of organizations say that improving the customer experience is a priority for the next year—and specifically one that data can help drive. So initiatives around customer retention, customer advocacy, customer loyalty are all stemming from our data.
Of course, basing decisions on data means that it needs to be managed and governed, right? So on the middle-right of the screen here, 84 percent of executives believe the responsibility of data assets should lie with the business—with the caveat that IT has occasional input. SO we’re not seeing a complete bifurcation, but more of shift in responsibilities with the bulk of it gravitating toward the business.
On the top-right you’ll see that organizations today believe that a third of their data is inaccurate. [pause] And that’s a huge number! This lack of data accuracy is undermining digitization initiatives, making processes less efficient, and diminishing the trust that we have in our data.
Lastly, on the bottom right here, you’ll see that 58 percent of businesses say that when it comes to developing their data strategies, data security is the biggest consideration. As data is becoming increasingly valuable as a corporate asset, we’re seeing a greater focus on safeguarding that data from bad actors. Not to mention that fraud and cybersecurity remain constant threats—and that can really undermine public confidence. So needless to say, there’s a lot riding on your data—but there are a lot of opportunities as well, especially when it comes to digital transformation.
Erin, could you talk to that?
In going through the research, I think it is important to start with how we are using data today or how we want to use it.
The role that data plays in strategic initiatives cannot be understated, and organizations across industry verticals are looking to their data as a primary driver of business opportunities. The largest data-driven opportunity we see in the next five years is around analytics. This is driven by organizations looking at data for daily operations and for strategic decision-making. This is a trend we’ve seen for a few years now as businesses are doubling down on investments in hiring analyst roles.
When we think about moving to digital business, analytics is really important. Without that personal touch or interaction, we need to use data to provide a more personalized and differentiated experience. Analytics are also crucial to optimizing those channels, not to mention more traditional optimization areas like supply chain.
Other key areas are real-time processing (again, very important with digital business), data as a service (which is an internal service to let people understand what is going on within the business), internet of things and automation. All of these are very important to achieve business objectives.
And what are those business objectives?
Over the next 12 months, the number one business priority is improving the customer experience. This chart shows the percentages and where they fall across the global group we surveyed and just the US. We think this is driven by digital transformation efforts and a shift towards proactive customer success models that place an emphasis on customer data.
Another key priority is talent and workforce development. It is a very competitive job market right now and businesses are competing for talent. When we look at it from a data management perspective, we often talk about people, processes and technology. While processes and technology can be fairly easy to control from and investment standpoint, the people who work for a company ultimately dictate whether processes are followed or technology is implemented. It goes without saying that having a focus on managing talent and developing a workforce is a critical priority for a maturing business. In fact, when we isolate out the c-suite responses, this is the number 1 business priority.
Then you see digital transformation and putting data at the center of the company as key areas that are directly called out by nearly half or respondents in the US.
In working on those areas, organizations are hoping to gain an edge against the competition. Data is a key way that organizations are looking to gain a competitive advantage.
We see from the research that organizations leverage data to improve their relationships with customers, to gain better insight for decision-making and also for more efficient business practices. All of these things, help them get ahead against the competition.
One area where we see data commonly being applied is around gaining a single customer view. This can help many of those business initiatives that we highlighted earlier, like improving the customer experience and gaining operational efficiency. Improving the customer experience requires a deep understanding of needs and motivations. While everyone has data on their customers, the silos between databases and flaws in the information can make understanding your customer difficult.
We see from the data that less than 5% of organizations say they have a consolidated view of their customers and 25% of organizations plan to undergo a single customer view project in the next year.
You can see from these charts two different perspectives, first the drivers behind these initiatives and then the reasons why organizations are struggling to gain that consolidated view of the customer.
We can see again, the top business priority coming through, customer experience, as a driver behind gaining a more consolidated view of the customer. Then we see customer retention, strategic decision making and sales coming through. These are areas that directly impact the bottom line.
So why don’t we all have this consolidated view of the customer. Well, the respondents say that they struggle with the variety of information, the wide variety of data sources, the volume of data and the lack of standardization. To be honest, most of these areas are not new and aren’t going to change any time soon. To make better use of our data, we need to update how we are looking at it and managing it.
But these are just a few changes. I will turn it over to Sean to cover off some of the other data challenges we see.
Thanks Erin. It’s really interesting to see how we’re using data today, and how we’re planning to use it to achieve practical business outcomes in the coming years. But, like anything in life, all of these really interesting business initiatives don’t come without their challenges.
While we can see from the research that businesses want to do more with data, they simply can’t. As I mentioned earlier, a third of data is believed to be inaccurate. This is really impacting the trust that organizations have in their ability to make data-driven decisions. And more often than not, we find that organizations are relying on gut-feeling to make decisions—even when that directly contradicts the data.
In addition, there are large concerns from the c-suite around data allowing them to provide a good customer experience (remember that is a top priority) and to meet regulatory obligations like GDPR. Of course, the penalties for mismanaging data can be severe, so organizations really need to get a handle on it before it’s too late.
The main reasons for this inaccuracy are items like human error, a lack of communication, and poor data strategies. Now some of those challenges come directly from the fact that we have legacy systems that can’t keep up with the way data is currently used. Others, like human error, continue to be the leading cause of inaccurate data year over year, and that can be a result of the data culture at organizations – or even a result of unclear data ownership. But also there is a lack of transparency around data usage and poor data governance practices internally contributing to these inaccuracies.
That can be an issue when it comes to regulation like GDPR where transparency is a key factor around data usage. We can see from our study, that there is a lot more businesses can do to improve transparency. Right now, 48% globally say their customers are fully aware of how we use data and trust them to use it responsibly. That level of confidence is actually lowest in the UK at 41%.
On the screen now are some of the challenges organizations face around data governance. They lack consistency, they aren’t sure which data to govern, they have a hard time justifying the investment. All of these are large issues that are common across many organizations.
Data governance programs are bespoke and are often developed slowly over a number of years. This can result in processes that are slow to adapt to critical market drivers. We can see this really manifest in the last row here called “processes are too rigid” which grew substantially over 2017. Many processes just aren’t able to scale with the growing volume and variety of data. We predict that in the coming years, organizations will be implementing data governance in tandem with data quality strategies so that the development of trusted data can happen as the demands of the business change.
These are just some examples of some struggles around data. Part of this is because the question around data ownership has still not been answered.
Erin, could you talk to that?
For data ownership, we need to think about who is responsible for the management of that information, but also who is helping to promote data across the business and who helps to make sure it is utilized to achieve some of those strategic objectives that I mentioned earlier like operational efficiency, risk and customer relationships.
In some organizations, ownership of data is unknown and a lack of authority are compounding the data-related challenges many organizations face. Where it is known, most of the time people think it sits with IT. That is the traditional way of managing data and as we can see, it has its problems because we aren’t fully leveraging data as we should.
Other people that are in charge of data include the CEO. I think this shows how important data has become and that it is really considered this key asset within businesses. But again, we only see that in about a quarter of businesses. We also see the CIO mentioned as the owner of data.
There are also a fair number who say ownership is divided between departments. This could be problematic when cross-departmental communication is cited as a primary source of data inaccuracies. Then you the rest divided between a data governance organization and the chief data officer, which is rising and we will get into that a bit more later.
But that is where data sits today. Where should it sit in an ideal world if we want to start moving the needle and get data in a better place. We need it to be trusted and we need to leverage it, that is going to take not only some investment in technology and processes, but more importantly, some organizational change.
While many argue that IT owns the stewardship and storage of data assets, the volumes of data and the shift to cloud-based storage services are changing this model. There is the question of where things are today, but there is also a question around who should own the data. More and more, organizations are asserting that business users should own the data. Now that is a big change from where it is today. They have the subject matter expertise to understand the context around data creation and, therefore, to know when and how it should be analyzed.
Ultimately, it is our believe that data ownership should sit with the business. And the c-suite agrees. 91% of c-level executives say that they believe the responsibility for data should ultimately lie within the business with occasional help from IT. In addition, 90% of respondents who work in IT agree that the business should retain responsibility for data programs.
But our research shows that owning the data and being empowered to govern that data across the organization don’t always go hand-in-hand. Globally, less than half of data owners say they have the budget and authority needed to enact new policies. In more than half, data is limited in some way, which can make it difficult to control data.
Organizations have a long way to go to empowering their data owners to implement necessary changes.
As Erin said, empowering data owners is really important, and it needs to be part of a larger investment and strategy around data—especially as we continue to grapple with a changing data landscape. On the next slide you’ll see the top factors affecting data strategies today.
Many organizations are focused on forming their data strategy and there are a number of factors they are considering. At the top of the list is data security, which I mentioned before. Really being able to treat data as a valuable asset means keeping it secure and away from bad actors. This is followed by customer experience, which we’ve seen time and again is a critical business driver today.
Next, and in my opinion most interesting, we see that the speed at which data is needed by the business is shaping how organizations build their data strategies. It clear that in today’s digital economy, we need to rethink the way we are managing and reporting on data in order to make it easily available for the business. You know, these legacy processes for requesting data can often take days or even weeks to prepare. Those are no longer an option. Now people want self-service capabilities and we are seeing data management strategies built around that distributed data. In fact, when choosing data management technology, 45 percent of customers say ease-of-use by business users is a key consideration.
Do you agree, Erin?
Thanks Sean. Now those factors are leading to a number of new investments this year.
Lots of businesses have data management projects in the next year. In fact, 98% of businesses are planning to buy data management technology in the next year. Across the board, the number of respondents saying they are planning projects increased by nearly 10% YOY.
The main projects are data integration and analytics. Both of these appear to be driven by putting data in the hands of the business users with that change of data ownership I talked about earlier.
Data migration is also up there. Many companies are migrating data as they move to more digital channels. They are moving data to the cloud or upgrading systems to handle the new volume and variety of information.
But with all of these projects, there are new considerations when picking technology.
Here are some of the top factors they are looking at when choosing technology. Ease of use is number one which we have talked about. But I was also interested to see reporting capabilities so high.
I was surprised that time to value was so low. To me, this is very important, especially for business users. However, maybe some of these businesses are not having to justify these purchases quickly and show a return on investment.
Thanks Erin. To summarize what we discussed today, I think it’s important to be in the mindset that we’re all going through this rapid shift to digital and our data is quickly become more and more critical to our success in this area. Key business initiatives, like improving customer experience, are hinging on our ability to leverage data appropriately.
Yet legacy ways of managing data simply cannot scale to meet the demands of data-driven business today, and inaccurate (or rather data that is perceived to be inaccurate) is eroding trust. We’re also seeing the responsibility for data start to gravitate towards the business, though not completely. This is resulting in new data leaders.
And lastly, businesses are investing in data management technology—but they really need to think about the bigger picture: how they can really weave together their people, processes, and tools in a scalable way to really be set up for success in the digital economy….
[pause – to Jenna]
Wow, it really sounds like there is a lot of potential presented by digitalization. Thank you Erin and Sean for your insight today, and for sharing these stats and trends. As I mentioned at the start of today’s webinar, we did reserve some time now for questions. We did receive a couple during the presentation, but please feel free to continue submitting questions and we will try to get to them. To get us started, Erin, we had a question come in for you …
It looks like those are all the questions we have time for today. If we did not get to your question, we will be in touch to answer it. On behalf of Erin and Sean, and the team here at Experian, I want to thank you for joining our webinar today. If you’re interested in accessing a free copy of the report that these stats are drawn from, you can download it from our website edq.com. When you’re there you’ll also find a host of related resources that you can access.
This concludes our webinar for today. Thank you.