The FINANCIAL — While 97 percent of organizations around the globe claim to use data and analytics (D&A) across the enterprise, only 19 percent are satisfied with the insights their D&A tools provide, according to Going Beyond the Data – Turning Data from Insights into Value, a new global report from KPMG International. The report highlights a growing gap between how businesses currently use D&A and their ability to apply it to untapped areas of rich opportunity.
“In the last two years we’ve seen a tremendous increase in D&A adoption and maturity across organizations; for example, more than 80 percent in our survey say they are making faster, more accurate decisions with D&A, and over 67 percent use D&A to reduce risk,” said Christian Rast, KPMG Global Head of D&A and a partner with KPMG in Germany. “Yet, we also know that business leaders face some critical challenges in realizing the full value of their data insights in the areas of revenue growth, serving customers and overall competitive advantage.”
Broad adoption with gaps of untapped opportunity
According to the survey results, 75 percent of respondents use D&A mainly in the areas of R&D, Supply Chain, Human Resources and Finance, with 47 percent of respondents confirming that improving productivity is the primary driver of their D&A strategies. Improving productivity was ranked highest for respondents in China (58 percent), and in the UK and Germany, generating growth edged out productivity at 42 and 39 percent, respectively.
Yet, the results point to some significant areas of opportunity that remain surprisingly underserved:
Less than a quarter say they currently use D&A to identify new revenue streams
Only 31 percent have used D&A to drive individualized marketing
Only 16 percent use D&A to predict future trends
While 92 percent say they use D&A for sales and marketing purposes and 81 percent have improved their understanding of customers, only 41 percent have created more tailored offers to prospective customers
“For organizations to successfully turn their D&A insights into value, businesses need to understand that insights do not come from data alone,” said Anthony Coops, ASPAC Data & Analytics Leader and a partner with KPMG in Australia. “The ability to apply advanced analytics that can map the data to the critical business drivers and issues calls for stronger alignment between the business and the analytics process. Those that are able to break down internal siloes and bring together the best of their data, people and technologies together from across the enterprise will reap the greatest benefits from their D&A applications.”
The key challenges that continue to prevent businesses from tapping the value from their D&A solutions center on data reliability and access to talent:
97 percent of business leaders say they already use D&A to manage risk, yet 58 percent still have difficulties evaluating data quality and reliability
Sufficient data skills is also a common challenge, with only 14 percent reporting they have all the talent and capabilities they need to fully leverage D&A
“While it’s evident that businesses are becoming more adept at evaluating data to gain actionable insights, it’s the transformation from insights to value that proves to be the greatest challenge,” Mr. Rast said. “Generating long-term value from data requires that organizations continue to move toward a robust, enterprise-wide D&A strategy that embeds D&A solutions and tools in every part of the organization. Making D&A integral across the enterprise is where the real value can be achieved – when it can be effectively used to address all priority business issues and drivers that are key to optimally managing risk, cost and growth.”
The importance of having an enterprise-wide D&A strategy not only tops the boardroom agenda, but is now influencing investment decisions in the capital markets, according to an upcoming KPMG LLP (US)/KPMG International report, Data and Analytics – A New Driver of Performance and Valuation. Specifically, the survey of 260 institutional investors and sell-side analysts indicate a rise in the strategic use of D&A in investment valuation and decision making in the coming years. The report will be available in mid-July 2015.
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