Big data is the new currency of business, and organizations are scrambling to make the most of it to optimize outcomes and meet business goals.
Knowing how to gather data is one thing but knowing what to do with it to transform your business is an altogether different story.
Here, we’ll examine the increasingly critical role that big data is playing in business, the type of data professional that may benefit your organization most, and specific steps you can take to transform your business.
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Embracing the Critical Role of Data
In "Big Data: Changing the Way Businesses Operate," Ernst & Young notes: “Big data will fundamentally change the way businesses compete and operate. Companies that invest in and successfully derive value from their data will have a distinct advantage over their competitors a performance gap that will continue to grow as more relevant data is generated, emerging technologies and digital channels offer better acquisition and delivery mechanisms, and the technologies that enable faster, easier data analysis continue to develop.”
As the world has become more digitized, the role of data has become increasingly critical to maintain a competitive edge. It’s why Accenture cites digital ecosystems as the new framework of business and organizations like Microsoft are willing to pay $26.2 billion in cash to acquire assets like LinkedIn.
Although the price tag for the acquisition isn’t the norm, the trend toward scooping up as much data as possible is. However, only the most digitally savvy of organizations are accustomed to taking such risks and that’s because they know they have the right data capabilities in place.
Acquiring the Right Capabilities
In order to keep up with the competition, McKinsey & Co highlights the need for companies to “… move beyond experiments with digital and transform themselves into digital businesses.”
To do so, these experts cite several traits of effective digital enterprises, and one relates to acquiring the right capabilities: “The skills required for digital transformation probably can’t be groomed entirely from within. Leadership teams must be realistic about the collective ability of their existing workforce.”
However, it can be difficult for legacy organizations without advanced digital competency to determine what type of data professional they need. Two common titles are “data scientist” and “business analyst.” Although the two terms are often interchanged, they’re definitely not the same. Both are experts in the use of data, but they use their expertise in different ways. Data scientists have backgrounds in computer science, mathematics, and technology and use statistical programming to create and implement algorithms to do the work.
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They work at foundational levels, by mining data and writing machine learning algorithms to support the decision-making process. In contrast, business analysts are educated in specialties like business and humanities, and extract data from a variety of sources to evaluate past, present, and future business performance. They then use this interdisciplinary data analysis to develop business insights and create tangible resources to support business decisions.
In a 2016 publication, McKinsey & Co notes the increasingly critical role that business analysts are playing. A recent survey of 714 companies around the world revealed that in contrast to earlier results which indicated delayed ROI for investments in analytics, “When we evaluated its [business analytics] profitability and value-added productivity benefits, we found that they appear to be substantially similar, in fact, to those experienced during earlier periods of intense IT investment. Our results indicated that to produce these significant returns, companies need to invest substantially in data-analytics talent and in big data IT capabilities.”
However, the researchers also urged patience, noting that “broader performance improvements from large-scale investments in data analytics talent often don’t appear right away.”
Steps Toward Transformation
In addition to ensuring that you have the right capabilities within your ranks, experts also recommend a number of other key strategies for using data to transform your business.
- Build data competency. This involves switching from application-based frameworks to a data-centric architecture, which overcomes the limitations encountered as applications have exploded and business has become more complex.
- Extend the use of data. This includes analyzing business from a 360-degree perspective, sharing data across company silos, using data to develop new products and services and keeping the big picture in mind as you do all three.
- Use digital creativity. In addition to developing new products and services, make the most of the creativity to produce results in digital marketing and digital enterprise integration.
Regardless of where you are today, you can begin to transform your business with data. By understanding the increasingly critical role it plays in the enterprise landscape, ensuring you have the right capabilities within your organization, and deploying specific strategies to enhance its effective use you’ll make the most of the new currency of business to maintain a competitive edge for your organization.