The Role of Data in Decision Making
Digitalisation has had a profound impact on organisations’ economic systems, competition, customers and values. In the current digital world, data is the new raw material. According to Forbes 2018, about 2.5 quintillion bytes of data are being generated globally every single day. At the beginning of 2020, the total amount of data in the globe was predicted to be 44 zettabytes, and is predicted to reach 463 exabytes globally by 2025 (Seedscientific 2021).
Emerging technologies, such as the Internet of Things (IoT) have significantly increased the rate at which data is being generated. Research shows that over 90% of the world's data was generated in the last two years, and that the rate at which data is being generated is growing exponentially.
So what does this all mean for businesses?
Most organisations use data to make strategic decisions about their future. However, given the sheer amount of data being collected and stored, there are a number of questions that we should be asking;
- How effectively are organisations using data?
- How strategic are organisations in harnessing this gold mine?
- What is the value placed on these data?
- Are organisations experiencing the full benefits of data?
Figure 1: Amount of data generated per minute by Daily infographics
Data - a priceless asset
Data is one of the most untapped and valuable assets that organisations are sitting on. It can be strategically leveraged to ensure continued business viability and relevance. While data was previously mainly used for assessing, forecasting, and making decisions, new technologies now enable businesses to uncover unexpected patterns in business activities. They are able to unlock new sources of value, playing a key role in how organisations differentiate themselves from their competitors.
The importance of using data effectively
Organisations are increasingly dependent on data and information; they are crucial in everyday operations, from customer insights to product development, as well as understanding consumer behaviours. Effective use of data can be the difference between business success and failure. Similarly, an organisation needs consistent, accurate and reliable data to maximize its business performance. A well thought-out data strategy allows businesses to gain a thorough grasp of their customer's needs, offering a 360-degree-view of personalised products and services, as well as intelligent market segmentation and consequently, different business models.
Data’s strategic potential
Companies have become more conscious of data's strategic value as a result of the tremendous growth in data generated by both humans and machines ( ECIS 2021). MIT researchers have identified three principles to guide companies as they shape their data conversations. The principles include:
- clarifying the data’s value proposition,
- charging the owner of business outcomes with data ownership,
- curating the data that matters most to the firm.
Insight from this research shows that 85% of respondents indicated that their firms see data as a strategic asset, but only 45% of firms act that way.
So how can data be most effectively mobilised as a strategic asset to support business goals?
Data governance and data security
One of the most critical foundations in this mobilisation is to start trusting data and to establish a data culture. This often means organisations have to rethink their data management practices. The explosion of data has resulted in a need for data governance - the process to standardise business data and related metrics throughout an organisation. This includes data definition, propagation, ownership and quality. In other words, it’s to ensure data standards, consistent, high-quality, curation, and relevancy of data throughout the organisation. Businesses can no longer achieve success without data. Yet, many businesses miss the basics of managing their data. That is, treating data as a strategic asset requires an effective data management strategy, not just new technology.
Data for strategic decision-making
The government initiative within the national data strategy (NDS) framework includes striving to use data for strategic decision-making. The National Data Policy (NDS) is a bold, pro-growth strategy that seeks to propel the UK toward creating a world-leading data economy that ensures public confidence in data use. Your decisions are as good as the data that you have, hence data quality is the bedrock as well as the cornerstone.
Similarly, data is used to drive evidence-based decision-making, reducing the risk of errors and poor strategy. Data is crucial for enhancing policymaking, service design and performance management. To achieve this goal, governments must view data as a strategic asset, create strong policy frameworks, implement reforms to ensure the availability of high-quality data, and permit trustworthy access, exchange, and use to help erode policy and service silos. The Digital Government Index (DGI) survey shows that there is a significant gap between the availability of standards and the implementation of initiatives to strategically manage data in the public sector.
Summary
Organisations have access to an infinite amount of data, but it’s what they do with it that matters. A well thought-out data strategy is a must. One that outlines the defined data value proposition, data ownership and specified quality requirements. Only then will an organisation truly understand data as a strategic asset.
Sopra Steria’s data-leading solutions
Sopra Steria delivers a comprehensive suite of innovative data-leading solutions enabling organisations to realise significant business value from data. The data insight and intelligence (DI&I) team of experts at Sopra Steria helps organisations across Europe to leverage data effectively to make strategic data-driven decisions.
Sopra Steria's data-leading solutions