Five Ways Your Business Can Transform into a Data Innovator
My company, Splunk, recently partnered with ESG Research to uncover the true value of data to businesses. With the COVID-19 pandemic, the lessons from this research have become more important: Companies that have a grasp of their data and can innovate will be able to open their doors and get back to business faster than those who don’t.
Our research (which you can access here) identified three distinct stages of data maturity, defined by a company’s sophistication in discovering and operationalizing all data. We called them Data Deliberators, Data Adopters, and Data Innovators.
Data Deliberators are the least mature. Often, data silos and isolated information exists within these organizations, rendering it “dark” to the rest of an organization. They know that they need to start their digital transformation, but often don’t know how to accelerate those initiatives to create business outcomes.
Two-fifths of companies surveyed fall into the next category: Data Adopters. For Data Adopters the mission is clear: uncovering data is their organization’s most important IT priority. Better yet, they’re dedicating the resources necessary to make the most of their data, and 80% of Adopters have a chief data officer (CDO) or equivalent leading the charge.
Finally, the most sophisticated data organizations are Data Innovators.
What IS Data Innovation?
So, what are the advantages of being a Data Innovator? Why spend so much time and resources orienting an organization toward data maturity? It’s simple: Smarter data use improves bottom-line outcomes for organizations.
Data Innovators are twice as likely to exceed customer retention goals. Data also allows companies to innovate faster, driving 20% of revenue from newly developed offerings. Research has found that Data Innovators are three times more likely than Deliberators to make better decisions than their competitors. As we look at the global restart of businesses, we might see a Data Innovator, maybe in manufacturing, looking at supply chain data to decide where and how many people to bring safely back to work. They have recognized that data used for one thing before the crisis can be put to use doing something entirely different now. That’s data innovation.
Despite this obvious advantage, only 11% of organizations across all industries have achieved Innovator status. There is a huge cross-industry opportunity to improve.
So, You Wanna Be a Data Innovator?
There are five core actions that every organization can take if they want to harness the power of data.
1. Invest for Success
Stop leaving the value of data on the table. Fund analytics initiatives. Hire, train and retain staff with the skills to investigate important business questions through data analysis. Data Innovators allocated more than 20% of their IT budget to data and analytics initiatives.
2. Establish a Leadership Team to Translate Vision into Reality
At the top of your list of hires should be a data leader and point person who can establish a vision and strategy for data use, and has a mandate to make that vision a reality. Moving to a Data-to-Everything mindset will upset the status quo. Strong leadership is needed to excel at designing initiatives, securing budget, building the analytics team and changing the company culture to be data-centric.
3. Democratize Analytics Tools
Companies that empower as many employees as possible to make the best decisions, faster, will win the day. The research shows that successful organizations democratize their analytics tools, meaning they make their data investigation tools available to many of their employees.
4. Automate Everywhere
Of all the forces driving the economic value of data, the increasing use of automation, may prove to have the most profound impact. Automating key performance indicators like sales trends, operational output, system and application performance eliminates the need for your analysts to ask repetitive questions, reduces human error and allows data analysts to focus on higher-value tasks.
5. Measure Your Opportunity
As the old saying goes: it’s impossible to improve what you can’t measure. Organizations need to understand where they stand on the data maturity spectrum to know what they stand to gain by improving their commitment to data, their analytical tools and skills and — ultimately — their effectiveness in using that data to create business value.
COVID-19, Digital Transformation, and Data Innovation
In light of the COVID-19 pandemic, it’s clear that understanding data maturity, fluency and innovation is critical for more than just business. Data can help you do more than boost your bottom line. Data can help save lives by determining where, when and how to prepare for and respond to a crisis. Moving forward, data will not only help organizations safely and effectively restart as we come out of this pandemic — it will help them build greater resilience to withstand future disruptions.
In my lifetime, the world has never been more in flux than it is right now. As we move forward, I’m seeing that COVID-19 has accelerated the digital transformation that was already well under way. We’ve been speaking to organizations that are completing in months what they’d thought would be three-to-five-year undertakings. Organizations that invest the most time and resources in finding and using their data will survive and be stronger at the end of this.
About the author: Andi Mann, chief technology advocate at Splunk, is an accomplished digital executive with global expertise as a strategist, technologist, innovator, marketer and communicator. For more than 30 years across five continents, Andi has worked with Fortune 500 corporations, vendors, governments, and as a leading research analyst and consultant. Andi has co-authored two books, blogs at Andi Mann – Ubergeek and tweets as @AndiMann.