Beware of 2020 Data, Alation Says
As 2020 (mercifully) winds down, forward-looking companies are looking to get a jump on planning for 2021. Just be careful using data from 2020 as the basis for those projections, warns Alation in its latest State of Data Culture report.
“Because 2020 is considered anomalous, two-thirds of data professionals (64%) say they are concerned about relying on this year’s data for planning purposes,” the company says in the report, which was released today. “Even as companies are adjusting to ‘the new normal,’ they question
how to use what happened in 2020 for planning purposes. Adjust for it? Throw it out? Use other sources of data?”
Alation debuted the State of Data Culture in September as a way to measure the progress organizations are making in implementing a data culture. The report and associated survey aim to measure the maturity and pervasiveness of various components that, according to Alation, collectively comprise data culture, including things like data search and discovery, data literacy, and data governance.
Less than 10% of organizations have adopted those three pillars of data culture across all of their departments, according to the latest incarnation of the quarterly report. And there continues to exist a data culture “disconnect,” in which leaders of organizations think their data culture is better than it really is.
However, organizations may be forgiven for taking a purely data-driven approach to planning for 2021, thanks to the aforementioned anomaly that is 2020. In lieu of by-the-book data-driven forecasting and budgeting, organizations are taking an “all of the above” approach to guide their planning.
According to Alation, 55% of business leaders are using economic or financial news to drive their decisions, while 50% are tapping into data from 2019 or earlier. More than half are watching their competitors’ activities, while less than half are seeking third-party insights and news about the pandemic.
The study found that, overall, 15% of data professionals say their organizations were prepared to operate in a crisis, while the rest were somewhat unprepared, mostly unprepared, or completely unprepared. Among organizations with the lowest data culture scores, the fraction that were prepared for a crises drops to just 2%.
COVID-19 also contributed to a significant decline in “tribal knowledge” among organizations, with 66% of study participants saying they lost a lot or some critical knowledge due to staffing changes that were caused by the pandemic.
“The loss of this tribal knowledge can impact the company for years to come– causing confusion, and bad decisions based on misunderstood analytics,” Aaron Kalb, Alation’s co-founder and its chief data and analytics officer, says in a press release. “Companies must capture this knowledge and share it across the enterprise to become data-driven and achieve successful business outcomes.”
It wasn’t all bad news, however, and progress was made in the fourth quarter in the Data Culture Index (DCI), Alation says. The survey found that 35% percent of companies were ranked as having a top-tier data culture, up from 33% in the third quarter, and 30% were ranked as having a low-tier data culture, down from 35% previously.
There is also some reason to be optimistic about staffing plans for 2021. While the forward-looking projections may not be entirely reliable (for reasons explained above), 52% of survey respondents said they believed their company will be hiring in 2021, and 72% said they expect data and analytics budget to be fully restored next year.
You can find the Data Culture Report for the fourth quarter of 2020 here.