In the report Insights-Driven Businesses Set the Pace for Global Growth, Forrester Research notes that organizations using more and better data to gain business insights are creating a competitive advantage for future success. They are growing at an average of more than 30% each year, and by 2020 are predicted to take $1.8 trillion annually from their less-informed peers.
What are transformative organizations such as these doing around data to widen the performance gap between themselves and the average company? Here are ten things data-driven companies do differently:
- They incorporate data and analytics into their core strategic vision. They think through the role data will play within their organization, which department will be the primary manager, how it will affect and be used by other departments, and how it will play a part in their culture.
- They choose tools and technology based on their use and planned use of data. If not a digital native, they’re changing existing technology and systems if needed so that they can capture more value from data and analytics.
- They make sure leadership not only supports data’s use and impact, but evangelizes it. According to the CDO Club, there are now more than 2,000 Chief Data Officers serving at organizations worldwide.
- They focus on hiring top talent. They also build teams to include analytics professionals with extensive business experience to more quickly surface actionable insights and make better business decisions. In a recent Business Higher Education Forum (BHEF) survey, 59% of employers said data science and analytics skills would be required of all finance and accounting managers by 2020; 51% said these skills would be required by all marketing and sales managers; 49% said they would be required of all executive leaders; and 48% said they would be required of all operations managers.
- They don’t silo data. Data-driven organizations value ongoing sharing and collaboration and build cross-functional processes to do so. An EY report shows that while 81% of organizations support the notion that data should be at the heart of everything they do, just 23% have implemented an organization-wide data strategy.
- They use data not just to improve core operations, but to create new business lines and new business models. According to the report Are Businesses Really Digitally Transforming or Living in Digital Denial, 85% of enterprise decision makers feel they have a timeframe of two years to make significant inroads on their digital transformation before suffering financially and/or falling behind their competitors.
- They use data to improve the customer experience. As customer experience becomes a leading brand differentiator, data-driven organizations know how customers use and don’t use their products and services. They analyze and react to feedback faster. They know when service is down or when a product is out of stock and send proactive alerts. They predict what the customer might need or want next and they offer it. The McKinsey Global Institute indicates that data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain customers, and 19 times as likely to be profitable as a result.
- They make data collection a primary activity across departments, empower employees with analytics, and measure and reward adoption. A recent survey by Gartner shows that average BI and analytics adoption stands around just 32% of employees in an organization, an average far surpassed by data-driven organizations.
- They’re learning about and investing in machine learning. This will help data-driven organizations solve business problems, predict customer needs and do much more faster.
- They’re learning about and investing in the Internet of Things. They’re using mobile devices and sensors to capture and leverage more data from more places. In a Retail Systems Research report, 80% of retailers worldwide say the Internet of Things will drastically change the way companies do business in the next three years.
Are there other things data-driven organizations do differently that should be added to this list? Add your observations in the comments below.