More than two decades after the term "big data" was invented, a majority of companies still do not have initiatives in place to create an analytics-driven culture, according to a new Deloitte survey, "Analytics and AI-Driven Enterprises Thrive in the Age of With™: The Culture Catalyst."
At the same time, the use of artificial intelligence (AI) and other advanced data-driven digital technologies are growing rapidly, as humans and machines collaborate (Loucks, Davenport and Schatsky, "State of AI in the Enterprise, 2nd Edition," Deloitte LLC, 2018).
The study, conducted in April 2019, examined 1,048 executives who work at large companies (501 and more employees) and interact with, create, or use data. The goal was to see how many organizations fall within the top two — "Analytical Companies" and "Analytical Competitors" — of the five categories found in the Insight-Driven Organization (IDO) Maturity Scale (see Figure 1). Finally, as we move into the "Age of With," a world where humans work side-by-side with machines and data coincides with actions, the survey also aimed to discover how organizations are currently using analytics and AI and what role culture and talent play in IDOs and data maturity.
"The results show there is a significant divide in how companies are approaching analytics. Many are finding that siloed initiatives, tools, and specialized talent are not enough when applied independently," said Ben Stiller, principal and strategy and analytics practice lead for the retail and consumer products, Deloitte Consulting LLP.
"To be successful in the 'Age of With,' companies must leap from being perpetual data 'dabblers' to becoming true analytics 'doers.' While the dabblers continue to execute informally disparate proofs of concept and pilots leading to minimum value delivery: The doers are systematically embracing data, adopting analytics, AI, and automation; and changing the way work is done across the enterprise," said Stiller.
Based on the IDO Maturity Scale, the survey found that fewer than four in 10 (37%) of executives believe that their companies are in the top two categories, and only 10% fall into the highest. While the remaining 63% are aware of analytics, they lack technology infrastructure, are still working in silos, or are expanding ad hoc capabilities. In addition, 67% of executives surveyed are not comfortable accessing or using data from their existing tools and resources.
While 76% of survey respondents report that their analytical maturity has increased over the past year, most are still using traditional tools such as spreadsheets (62%) and business intelligence programs (58% combined). Sixty-four percent rely solely on structured data from internal systems or resources, eliminating insights from unstructured sources such as social media comments, product images, and customer audio files. However, unstructured data can deliver a more comprehensive understanding of factors outside the organization that can impact business. In fact, the survey showed that executives who incorporate unstructured data into their approach are 24% more likely to have exceeded their business goals.
Of the 26% surveyed that use a single, common set of tools and methods across the enterprise for accessing and analyzing data, 80% exceeded their business goals last year. Adding to this, 37% of the companies with the highest level of analytical maturity on the IDO Maturity Scale, nearly half (48%) significantly exceeded business goals in the last 12 months.
This goes hand-in-hand with enlisting analytics champions: Executive sponsorship is vital to organizational change.
According to the survey, the CEO is lead champion in 29% of organizations surveyed and those companies are 77% more likely to have exceeded their business goals significantly. They also are 59% more likely to derive actionable insights from the analytics they are tracking.
"It's clear from our research that organizations want to lead with advanced analytics, and the adoption of technology like machine learning only underscores their efforts," said Tim Smith, principal, Deloitte Consulting LLP and technology strategy and business transformation practice leader. "However, this willingness is not always matched with the ability to turn insights into action. Data science has to permeate company culture starting from the top to see true benefits."
As companies continue to incorporate data in their operations, they must make business analytics a priority for all employees to exceed business goals. To create an IDO leaders should integrate culture, technology, and talent to gain a competitive advantage:
All signs indicate that large organizations need to focus on business analytics to continue to grow and be positioned for success. However, most are hindered by their culture.
Business leaders who deploy the responsibility of analytics more broadly and invest in an insight-driven culture will be poised to outperform their counterparts as well as be better prepared for the Age of With.