10 Reasons Why Your Organization Still Isn’t Data-Driven
Whether you love or hate the term “data-driven,” it is something most organizations aspire to become. Essentially, it means your company is oriented to make strategic and tactical decisions based on data rather than opinion or gut instinct. In some cases, that may even mean actions are taken in an automated manner without human intervention (e.g., product recommendations, loan approvals, and so on).
Whether you prefer “insights-driven,” “data-informed” or some other variation, the intention is the same—to make better decisions and optimize your business performance by fully embracing data. Today, most firms use data in some fashion for decision making, but many can’t claim to be fully “data-driven.” In fact, in the annual NewVantage Partners executive survey, only 24% said they had “created a data-driven organization.” Being data-driven means you lean into the numbers and rely on them even when it’s not easy or convenient to do so. If you’re a data-driven organization, you’ve developed a data culture that permeates the entire firm—not just at the executive level or within certain functional areas.
According to the NewVantage survey, 99% of firms have invested in data initiatives and 92% reported the pace of investment is accelerating. If these statistics are representative of reality, why aren’t we seeing more data-driven organizations? Clearly, most companies are making significant investments in analytics, business intelligence, and other data technologies. Interestingly, the NewVantage survey identified the principal challenge to becoming data-driven was not the technology (7.8%) but the people, business process and cultural aspects (92.2%). Delving deeper into this latter area, I will share 10 common reasons why your organization isn’t yet data-driven:
If I look at the hundreds of companies I’ve had the opportunity to work with over my analytics consulting career, executive sponsorship and buy-in have always been key determinants in whether an organization was on the path to becoming data-driven or not. In a 2016 executive survey by McKinsey, it was seen as the biggest contributing factor to analytics success. If the key decision makers within your organization are not committed to embracing data, how will you convince everyone else to do so? Your company must have executives and managers who can lead by example and not just give the data initiatives lip service, or worse, blatantly disregard the data. In a 2021 Talend survey, 36% of executives were setting the wrong example by relying on intuition to make the majority of their decisions.
In the NewVantage survey, only 30% of companies reported having a well-articulated data strategy. If your goal is to drive better business outcomes with data, what’s being measured and reported by your analytics systems must be closely aligned with your business strategy. Without a well-defined data strategy, there’s a higher likelihood people won’t have the relevant, useful data they need for their roles and responsibilities. The moment the data isn’t tied to your key business objectives or key priorities, you invite people to make important decisions without it.
In an Accenture study, only 33% of firms reported they trusted “their data enough to use it effectively and derive value from it.” It’s difficult to make much progress with your data initiatives when people don’t have faith in the numbers due to data quality issues. While data will never be perfect, people need to have a certain level of confidence that the underlying data accurately reflects what’s happening. If you see your data as a business asset but don’t address ongoing data quality issues, you can’t be surprised when the data isn’t being used on a regular basis.
In a 2019 report by Arm Treasure Data, 47% of marketers indicated their data was “siloed and difficult to access.
