Data Woes Are Widespread and Common Across Business Sectors
Executives grasp the importance of data management but struggle to turn it to technological and competitive advantage, according to Dun & Bradstreet survey
Wednesday, July 3, 2019
By Katherine Heires
Information-centric industries such as financial services are not alone in grappling with data management challenges. A survey commissioned by Dun & Bradstreet reveals that they are causing headaches across the entire business landscape.
As reported by D&B in The Past, Present and Future of Data, majorities of respondents view effective data management as critical for financial forecasting (73%), mitigating risk (73%) and understanding and managing employees (66%).
However, 28% consider effective data management to be their biggest challenge, 42% admit that they have struggled with inaccurate data, and 46% acknowledge that they haven't employed the right or most appropriate technology to take full advantage of their business data.
The report, released on June 24, is based on a poll in March of 510 decision-makers in the U.S. and the U.K. in multiple business sectors including finance, manufacturing, retail, marketing and IT.
“In the next decade, businesses must perfect their data strategies to realize the new opportunities of the increasingly digital world, or risk being left behind altogether,” says Anthony Scriffignano, chief data scientist at Dun & Bradstreet. He adds, in an introduction to the report, “We've spoken with business leaders to understand how their relationship with data has evolved in the last decade, the challenges they still encounter, and their plans to transform by 2030.”
Shortcomings and Costs
While 57% agree that they have had an effective data management strategy in place across the organization, 55% say that they have not maximized the power of data to gain a competitive advantage.
Poor data management has contributed to such costs as regulatory fines, with 12% having been fined or disciplined by regulators for data issues. What's more, 42% believe that currently, if a regulator looked closely at the way that data is handled within their organization, they could be exposed to fines or penalties.
There are also reputational consequences: 17% report a hit to their reputation due to working with a supplier or customer involved in malpractice; and 16% have run into regulatory issues due to a lack of information about a supplier or customer.
Twenty-five percent of businesses with more than 500 employees report having lost customers due to incomplete or inaccurate data; that number climbs to 32% of businesses with 250 to 500 employees. Nearly one in five (19%) have lost customers for using incomplete or inaccurate data about them, and 15% failed to sign a new contract with a customer for the same reason.
Eighteen percent in the survey say they have lost money by offering too much credit to a customer due to a lack of timely information about them - a figure that goes higher for larger businesses. Of firms with more than 500 employees, 23% have been impacted in this way, compared with 29% at firms with 250 to 500 employees.
Almost one in five (19%) say financial forecasts have been inaccurate due to poor or unreliable data - 16% in the U.S. reported this problem, versus 22% in the U.K.
Who Is in Charge?
The survey identifies what appears to be a key hindrance in advancing data management goals: 41% say that at present, no one in their organization is ultimately responsible for data management.
The respondents are divided on who in the C-suite is most responsible for data-related matters: 20% identify the CEO, 16% the chief operating officer, 15% the chief information officer, 14% the chief technology officer, and 12% the chief financial officer.
“Around one in ten [surveyed] don't know where data ownership has sat or will sit in the future,” the D&B report says. “This is something that organizations must define to support a coherent, valuable data strategy.”
Structural challenges persist for whoever ultimately assumes data management responsibility: 43% say that data is too siloed for business groups to make any sense of it, and 41% contend that there is simply too much data in their organization.
There are, on the other hand, some positive trends.
Sixty percent of the decision-makers say their organization would benefit from a more effective, centralized master data strategy. Two-thirds (67%) are excited about the potential of data to help grow their businesses, while 51% say that data will become more important than business relationships in the future. Strikingly, 50% believe that their company will not be able to survive without top-quality data.
Another positive sign is in investments to support effective data management. Technologies including data management software (68%), machine learning (53%), blockchain (44%) and edge computing (42%) are said to be on the agenda. “Businesses are investing in these new technologies today to help them to get more from their data,” the report says.
Meanwhile, different and potentially more nuanced issues are expected to emerge, particularly around the ethical use of data. Fifty-four percent of respondents are concerned about the ethics of data usage, and 47% worry that artificial intelligence could lead to bias or discrimination in the analysis of data. Fifty percent of U.K. executives cite this concern, compared to 44% in the U.S.
The report highlights the fact that people or proper staffing will be critical in reaping the rewards of data management, in both technological and general management roles. Twenty-nine percent of the executives agree that people are key to maximizing the value of data, though at present, only 25% have individuals dedicated to the management of data and 23% say that they have the right people to implement effective data management.
The survey also reveals that it is difficult to find the necessary expertise. In the U.S., 24% - and in the U.K. 20% - say it is becoming harder to find the right people with the right data and analytics skills. “For the organizations to be successful, businesses will need to incorporate appropriate and ongoing upskilling and recruitment in to their data strategies,” the report states.
Respondents indicated that the prospect of further regulation, whatever form it takes, is a worry: 54% of U.S. executives, versus 60% in the U.K., are concerned about data privacy rules. But only 17% of U.S. executives cite regulatory compliance as one of the biggest challenges, well below 31% of U.K. leaders, which the report says “may reflect the challenges of British organizations in meeting the requirements of the European Union's General Data Protection Regulation (GDPR).
Summing up the key takeaways, D&B's Scriffignano says, “The first is that digital disruption is going on, and there is collective awareness of that. Practitioners understand that data and related technology will be vital to their success.”
Second, the chief data scientist goes on, is that the stakes are going up, and to be competitive and reap the full benefits of data and the age of digitization, companies need to get better at all the components of effective data management.
“In order to be ready for the future, it's not just what sort of new talent you hire to better manage data, but what you do within the organization to upscale the skill set of your employees,” he says, adding that all of these elements will be under scrutiny in the future and need to be acted upon if data management efforts are to fully succeed.
Katherine Heires is a freelance business and technology journalist and founder of MediaKat llc.