Raw data is pretty much worthless to a business, but that fact doesn’t stop organisations from collecting ever-increasing amounts of facts and figures. The reason is simple – any business that can create something useful from raw data has a better chance of succeeding than its competitors.
The goal of any organisation today has become turning unstructured raw data, or Big Data, into small data, and to then turn that into insight. That three-stage process is best seen as a journey, where data is collected, analysed and eventually applied to business strategy.
Yet evidence would suggest many organisations find the data journey to be a tortuous process. International consultant Capgemini reports that while more than half (59 per cent) of c-suite executives recognise that data is becoming a core component of market value, almost two-thirds (65 per cent) acknowledge their business is at risk of becoming uncompetitive unless they embrace new analytical tools.
The global research suggests many organisations are getting lost somewhere along the journey. While they might be good at collecting raw data, some firms struggle to analyse information and produce useful insights. That lack of insight is leading many executives to hold their hands up in grudging acceptance that other organisations are getting ahead.
Capgemini’s research further says 64 per cent of executives believe Big Data is changing traditional business boundaries and as a result is opening the industry up to new providers. More than a quarter (27 per cent) of business leaders see competition coming from new players in other industries, while 53 per cent expect to face rivalry from data-enabled start-ups.
One high profile example is transport start-up Uber, which uses the statistical process regression analysis to analyse the social demographics of a neighbourhood. Uber uses the information to determine how service demands will fluctuate and how prices, and customer satisfaction, might be affected. The firm’s insight has allowed it to challenge – and in many cases to beat – traditional transportation specialists.
Organisations facing new challengers must adopt business intelligence and adapt their long-term strategy. Traditional utilities firms faced a new challenge in the form of Nest, Google’s smart thermostat. British Gas had gone head-to-head with the technology, using insight from business intelligence to develop – and to continue to hone – its home-heating device, Hive.
Access to analytics can also change an entire sector, such as the rapid IT-led transformation in the financial services sector. Real time insight is allowing leading-edge firms to increase the speed of electronic trading. The quality of insight is such that 64 per cent of data-leading firms express a high level of confidence in being able to create great trading strategies, compared with only 53 per cent of data laggards, according to finance specialist State Street.
The message is that, across all businesses and sectors, the need to create insight from information continues to rise. That critical role is only set to increase. In the long term, the analysis of raw data will not only help your firm compete but could guarantee its survival.