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Organisations today understand the potential value that big data – and more specifically, actionable insights – brings to their business, but few of them are ready to take full advantage of it.
The fact that data is creating massive value for organisations is irrefutable. In a KPMG survey, almost 70 per cent of all C-level executives said that data and analytics (D&A) would be important to their revenue growth. A recent survey by EMC, a global data management company, found that the majority of UAE respondents felt their organisations would make improved decisions with better use of data. With Dubai’s plans to become a fully integrated smart city by 2021, big data will play a very significant role in the future.
While the potential value of D&A may be clear, many organisations continue to struggle to take advantage of their D&A capabilities. In a survey by KPMG, almost all executives (96 per cent) agreed that they could be better at using D&A in their organisations.
One of the challenges of harnessing big data is that it is continuously growing, not only in size and scope but also in complexity. Another major hurdle is that data is often trapped in silos, inconsistently labelled or locked behind access controls or with an outsourced entity, making it difficult to gain access to in a cost-effective manner. In many instances data is also dirty (incomplete or corrupt).
These challenges make it difficult for organisations to even take the first step in data management. The initial investment appears costly and the lack of prior experience and internal capabilities dampens the efficacy to deliver the required return.
Another issue, after the initial efforts bear fruit, is the ability to scale the initiative across the organisation and ensure the existing processes, policies and employees are geared up to enable a true insight-led organisation.
Lastly, transforming into an insight-led organisation is not the end; the ability to constantly find new and innovative applications of data to create delightful customer experiences and differentiated products is key to developing a competitive advantage in this digital world.
Based on our client experiences, we have observed the following best practices:
• Focus initial efforts on customer outcomes and start with the data you have to deliver quick wins. Focusing the initial investment on areas that provide the most value for customers and integrating existing data sets help to deliver quick wins and generate the required stakeholder support. A UAE bank started its big-data journey by using customer transactions and payments data from its existing systems to aim offers at increasing product usage or reactivating dormant customers. After realising the benefits, it invested in advanced capabilities to capture and use clickstream data from its website and other online data to fine-tune its offers based on customer preferences and needs.
• Develop the transformation blueprint based on a self-funding implementation to instil a strong discipline of benefits realisation. The transformation blueprint identifies the business issues being addressed and the key changes (people, process and technology) required to realise value. By sequencing the initiatives in a self-funding manner, the organisation is forced to build analytical capabilities in line with business priorities and focus on benefits realisation.
An Australian telecoms operator outsourced parts of its management information system and used the savings to invest in advanced analytical capabilities for the finance and marketing departments. An insurance company in New Zealand coupled the investment required to build foundational capabilities such as an enterprise data warehouse, for which direct financial benefits are difficult to quantify, with income-generating capabilities such as event-based campaign management. This helped to build up the data warehouse based on the campaign data requirements, and thus delivered some quick wins and reinvestment of the benefits to execute the transformation blueprint.
• Build a culture of experimentation to drive constant innovation. Implementing a culture of experimentation that recognises that some projects will fail and provides employees and business units with the right guidelines – and the flexibility – to safely test out new approaches is critical to drive innovation. A major South African bank has converted one of its branches to an innovation lab, which includes a high-tech testing facility along with “freethinking rooms” that allow staff and customers alike to pilot innovations and provide instant feedback.
• Create data governance models and an enterprise data management function to sustain value creation. Data governance provides flexibility to the business, while also giving consistency in the standards and controls guiding data usage. Enterprise data management acts as a bridge between IT, the business and the data to help ensure that the right information is being used consistently across the organisation. A US retailer appointed a chief data officer who reports directly to the chief executive and empowered the position to drive an insight-led transformation across the enterprise.
At the end of the day, the biggest technology risk for organisations is being left behind in the race to turn data into insights and insights into value. Our experience suggests that those who are able to transform into insight-led originations will win in this digital era. So how are you going to think big, start small and scale quickly? How are you going to build a culture of innovation, and who is going to drive it for you?
Farhan Syed is a partner at the financial consultant KPMG Lower Gulf.
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