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In today’s fast-paced and volatile economy, businesses need to be smart with their data. Across industries, data provides the digital fuel for every business – having the talent and infrastructure to use it effectively and ethically is critical. The UK government recently published its UK Digital Strategy which highlights why data is central to the digital economy. This strategy will help the UK to strengthen its position as a global science and technology superpower if data is made a priority by business and technology leaders, who need to start laying the right foundations now. However, EY research for The Department of Culture, Media, and Sport (DCMS) has identified a significant gap between data’s potential and its actual ability to drive short-term economic and long-term social value in the UK. This gap is caused by a number of factors. These include consumers who lack trust in sharing their data; limited access by technology leaders to the relevant skills needed in their workforce to store and use data effectively and ethically; as well as challenges with legacy IT infrastructure.
To support the government’s goals to boost the digital economy, and unlock growth opportunities for their business, CIOs need to be clear about the value of harnessing data and how to use it effectively. These goals can only be achieved with solid data foundations.
Use your data – and use it wisely
Today, data is power and unlocking its value is essential for the success of individual companies bouncing back from the COVID-19 pandemic, as well as to create long-term value and prosperity across the global economy.
Among the positive signs we are seeing, businesses have recognised the value of data. EY’s survey found that almost all organisations (80%) consider data to be important to their success and believe that improving data foundations can deliver significant value through increased productivity.
While data’s value is often assessed in terms of inputs (for example, how much data do we collect and what is the cost of collection?), its true value is only obtained through its outputs and impact, such as business intelligence, identifying new product development opportunities, and market insights that fuel innovation. Data-driven customer-centricity can increase the effectiveness of pricing decisions and improve customer retention and acquisition – all of which have clear and measurable business value.
While the cost-of-living crisis and inflationary pressures might cause businesses to be cautious when it comes to new investments, activating data will provide immense value to their overall business now and for years to come.
Harnessing data effectively
The first step to obtaining value from data is through laying the right foundations. This means ensuring that the organisation’s data is fit for purpose, recorded in standardised formats on modern systems and stored efficiently. These actions also help organisations comply with ever-changing data regulations and compliance requirements.
If data foundations are not properly laid down then efforts made by businesses to build new services and products, or to transform their processes and ways of working, will inevitably be undermined. It could be that a system prompts a call-centre agent to recommend the wrong product or refuse a loan for an eligible customer. Or businesses also run the risk of
compromising trust in data – whether it's via a lack of adequate protection for their data against cyber-criminals or by not being able to locate customer data quickly when requested.
Solid data foundations are crucial to business success because they allow the benefits of data to be unlocked and businesses to be transformed as a result.
In addition to this, businesses should also look at their workforce to ensure that employees have data skills in areas such as governance, architecture, analytics, cybersecurity and ethics. Currently, existing workforces in many businesses lack appropriate digital skills, with 62% of UK employers admitting that their workforce only has some of the required digital skills or face severe shortages.
This shortage of talent means that businesses cannot use or analyse data effectively. It can also be difficult for them to find employees that possess deep technical skills alongside commercial and entrepreneurial expertise to maximise its value. There are ways to ease this pressure, whether by developing apprenticeship opportunities or building training programmes to upskill existing employees.
Secondly, challenges with existing IT infrastructure can prevent organisations from understanding the full benefits their data can provide them. In many cases, disparate legacy technologies can’t enable the wide access and sophisticated analysis needs of data today, such as the use of artificial intelligence. Older infrastructure may also make data sharing between different areas of the business more challenging.
While there are no shortcuts to improving data foundations, legacy infrastructure does not help the business use insights as effectively or as ethically as it could. Even when companies invest heavily in the latest technology and tools, if this isn’t supported by a flexible underlying infrastructure, the ability to capitalise on the data they have, tap into new commercial opportunities or serve customers better will simply not improve.
The power of a strong data foundation
Whether we notice it or not, data facilitates almost every aspect of modern daily life, in both personal and business worlds, and we can only expect to see this increase in the future as customers want more personalisation, and businesses find new ways to gather and process data. Organisations need to make sure that they are moving rapidly to achieve digital maturity; success will rely on making sure that data foundations are established and scaled in the right way.