Companies Are Failing in Their Efforts To Become Data-Driven
Becoming “data-driven” has been a commonly professed objective for many firms over the past decade or so. Whether their larger goal is to achieve digital transformation, “compete on analytics,” or become “AI-first,” embracing and successfully managing data in all its forms is an essential prerequisite. Consistent with these goals, companies have attempted to treat data as an important asset, evolve their cultures in a more data-oriented direction, and adjust their strategies to emphasize data and analytics.
We knew that progress toward these data-oriented goals was painfully slow, but the situation now appears worse. Leading corporations seem to be failing in their efforts to become data-driven. This is a central and alarming finding of NewVantage Partners’ 2019 Big Data and AI Executive Survey, published earlier this month. The survey participants comprised 64 c-level technology and business executives representing very large corporations such as American Express, Ford Motor, General Electric, General Motors, and Johnson & Johnson.
Here are some of the alarming results from the survey:
- 72% of survey participants report that they have yet to forge a data culture
- 69% report that they have not created a data-driven organization
- 53% state that they are not yet treating data as a business asset
- 52% admit that they are not competing on data and analytics
Further, the percentage of firms identifying themselves as being data-driven has declined in each of the past 3 years—from 37.1% in 2017 to 32.4% in 2018 to 31.0% this year.
These sobering results and declines come in spite of increasing investment in big data and artificial intelligence (AI) initiatives. 92% of survey respondents reported that the pace of their big data and AI investments is accelerating; 88% report a greater urgency to invest in big data and AI; and 75% cite a fear of disruption as a motivating factor for big data/AI investment. In addition, 55% of companies reported that their investments in big data and AI now exceed $50 million, up from 40% just last year. Further, companies are building organizations to manage their big data/AI initiatives, with a rise in the appointment of chief data officers from 12% in 2012 to 68% of organizations having created and staffed this role in the past 7 years.
Yet critical obstacles still must be overcome before companies begin to see meaningful benefits from their big data and AI investments. An eye-opening 77% of executives report that business adoption of big data/AI initiatives is a major challenge, up from 65% last year. Executives who responded to the survey say that the challenges to successful business adoption do not appear to stem from technology obstacles; only 7.5% of these executives cite technology as the challenge. Rather, 93% of respondents identify people and process issues as the obstacle. Clearly, the difficulty of cultural change has been dramatically underestimated in these leading companies — 40.3% identify lack of organization alignment and 24% cite cultural resistance as the leading factors contributing to this lack of business adoption.
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10 March 2020
06 March 2020