Companies Are Failing in Their Efforts to Become Data-Driven

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 AI initiatives. Whatever the reasons for the failure to achieve transformational results from data initiatives, the amount of data continues to rise in business and society. Analytical decisions and actions continue to be generally superior to those based on intuition and experience. The companies in the survey are investing heavily in big data and analytics. In short, the need for data-driven organizations and cultures isn’t going away.

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’ , 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:

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 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 $50MM, 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.