To date, I have lost count of the number of media articles and experts' commentaries proclaiming, "data is the new oil." Undoubtedly, ‘winning with data' has become the number-one competitive game in nearly every industry. Companies that use advanced analytics and machine learning are twice as likely to be top-quartile financial performers and three times more likely to execute effective decisions. When so much is at stake, it's obvious that every business leader wants a turn to piggyback on the data story—but there is a catch. Before data becomes an asset, it is a liability for companies and leaders that find themselves between a rock and a hard place with these torrents of data. They are struggling to decide what to collect and store, and what costs will be involved. It can be overwhelming. Consider these points:
- Data volumes have already gone beyond manageable levels. Companies are awash in data. On average, companies manage 386 terabytes of data, which is approximately 5.5 times the size of the 4.62 billion web pages online today. Companies predict an average annual growth in data volumes of 44% through 2020. So, it is no surprise that 70% of companies surveyed listed data volume/ variety outpacing the capabilities of their systems/tools. As a result, they are resorting to the public cloud or purchasing more on-premise storage capacity to store these staggering volumes. In such organizations, IT is more focused on reducing data storage costs, than harnessing value from data. Unfortunately, this creates a real-life Mission Impossible situation, as data volumes will continue to grow faster than their storage investments.
- Data without meaning is just noise. While data can grow quickly in scale and value, it can also be worthless, even a burden, if not viewed and managed correctly. Only 44% of the data collected is actually analyzed today, and only 17% of companies have created new products and services purely built on data. The irony is that companies are spending money to store data that they are not doing anything with. If your data is collecting dust in your data center, don't hesitate to wipe it clean because at this point, dirt just isn't valuable.
- Lack of corporate culture that trusts deeply in data. Decision-making is somewhat hierarchical in many organizations and is less effective at translating new data sources or types of data into key business decisions. Only 32% of companies surveyed said their company has changed its approach to strategic decision-making as a result of more data. In today's age, business decisions can no longer be hierarchically oriented or based on intuition. Senior leaders must stop asking their teams to just "fix the data problem" and instead ask them to "fix their decision-making quotient." Leaders need to say goodbye to gut-feeling leadership and capture the next tech wave of data-driven decision-making.
Turning data into actionable insight doesn't occur by accident—you need to establish and manage a "data supply chain" across the business. To stay ahead of the curve, businesses should set a target for the next 12 months to match their decision-making speed to that of the anticipated growth in data volumes. For instance, if you expect a 30% annual growth in data over the next 12 months, your organization's speed for making insights and applying data intelligence needs to accelerate by 30% in the same period. Anything less is going to impact the speed of doing business in this fast-changing world. You can read more about why speed to get insights is important here.
So the next time you hear people say, "Data is the new oil," it's not that they're wrong, they're just a bit ahead of themselves. Try asking them how well they are mining, refining, distributing and monetizing the data—it probably won't take long for them to realize that data is the new oil...but just not yet.