WHAT IT'S ALL ABOUT...
In this blog, Laura Timms explores why the data maturity journey matters so much to organisations.
Data, data, data. The word that’s on everyone’s lips – but why exactly is it so important?
Data is something that every organisation produces. It comes from the web, our mobile phones, payment systems, surveys, social media and so much more – and it’s estimated that by 2020 there will be more of it than there are grains of sand on the earth.
Data is increasingly becoming a crucial corporate asset for organisations and has even been hailed by some as the currency of the 21st century.
But it’s not simply just having data that makes it an asset, it’s what you do with it. And this is where the whole idea of data maturity comes into play.
Data maturity is essentially the extent to which organisations utilise their data to get the most out of it. The more highly data is esteemed and the more sophisticated the techniques to analyse the data are, generally, the more data-mature the organisation is.
Likewise, an organisation that does little with the data they produce is likely to only be in the very early stages of their data maturity journey.
Do you know your organisation’s stage of data maturity? This article will explore why data maturity matters and why advancing in your data maturity journey should be top on your list of priorities.
Better equipped to identify opportunities and threats
Opportunities are everywhere, but how do you identify them?
We’ve all experienced the frustration of spotting an opportunity only to realise it’s too late. The ‘should’a, could’a, would’a’ syndrome kicks in and we fantasise about all of the wonderful things we could’ve done if we had just taken action whilst the opportunity was ripe.
Data mature organisations have the advantage of being able to spot opportunities way in advance whilst they’re still invisible to the human eye. Through leveraging the power of predictive analytics, organisations are able to use their existing data to anticipate what will happen in the future.
This enables them to anticipate everything from which candidate will be the best fit for the job prior to handing them the contract, to understanding which products are most likely to go down well with their customer base.
It also allows organisations to foresee potential threats such as when an employee is at risk of leaving the organisation, and which months in the year they can expect to see sales decrease. This allows them to take preventative action to ensure that they’re prepared for whatever they face.
As organisations advance in their data journey, they may even start using technologies like artificial intelligence to get even more out of their data. This takes insights to a new level by highlighting issues prior to them even being considered.
Competition is fierce and the pressure to keep up has never been more real. In today’s social world, sub-par standards won’t go unnoticed.
To differentiate from the competition, it’s essential that organisations strive to become the best at what they do.
Many leading companies understand this, and are using their data not only to improve their core operations, but to launch entirely new and improved business models.
This is equipping data-driven organisations with insights that supercharge their own efforts, allowing them to break free from the limitations that would otherwise hold them back.
A survey by MIT and IBM found that organisations with a high level of data maturity had 8% higher sales growth, 24% higher operating income and 58% higher sales per employee.
Advanced data maturity is creating an uneven playing field in many industries, with data-driven organisations stealing the majority of the market share in some hyper-competitive markets.
Research shows that organisations that use analytics to analyse their data get paid back $13.01 for every dollar spent.
Similarly, in Deloitte’s Analytics Advantage report, income production or cost reduction was reported to be the most valued outcome of using analytics to better understand data.
Organisations that utilise analytics benefit from:
- Increased sales
- A better understanding of innovation opportunities
- Forecasting financial performers
- Understanding of financial drivers
Take this example: HP had the issue of high management turnover which was leading to revenue loss due to the loss of productivity and the cost of having to re-recruit.
Using analytics to analyse their historical data from the previous two years, HP we were able to identify the risk factors that ultimately led to employees wanting to leave.
This insight enabled them to develop strategies to retain their employees, which resulted in savings of $300 million.
The moral of the story is simple – data maturity equals better control over your organisation's financial health.
A survey by Deloitte found that nearly half of all respondents reported that better decision-making was a key benefit of unlocking their data using analytics. Another 16% reported that its greatest benefit was better enabling key strategic initiatives. Whilst nearly two-thirds of respondents said that analytics capabilities played an important role in driving business strategy.
In essence, analytics allows data mature organisations to put data at the forefront of all decision-making. They don’t have to rely on guessing games or intuition to figure out how the five new marketing roles align with the financials for the next quarter. Nor do they have to worry about launching a new product without truly understanding how this is likely to perform.
Instead, they can empower their decision-making processes by relying on the data to tell them the facts.
More connected business
Let’s face it, silos aren’t something that most businesses are stranger to.
When the sharing of information between business areas dwindles, departments can become focused introspectively rather than on the overall vision of the organisation. This can lead to data throughout the business becoming out of sync; ultimately resulting in localised, disconnected decision-making.
Many data-mature businesses have a centralised data store along with defined data standards. This gives them a birds-eye of their entire organisation so that activities in different areas of the business can be aligned.
As data becomes more and more highly esteemed in an organisation, breaking down organisational and technological silos becomes easier and this unlocks new insights and models.
Hopefully you’ve been convinced of the power that data maturity holds in shaping your overall potential as a business, the next step is to take action.
Take our free data maturity quiz to find out where you are on your data maturity journey and understand the exact steps you need to take to move forward.
Laura Timms -
Product Marketing Manager, MHR Analytics
Laura Timms is Product Marketing Manager at MHR Analytics and a data maturity advocate. With a background in Psychology, Laura has managed research and strategy for business technology products for the past three years.
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