CEOs: Firms That Best Leverage Data Will Beat Their Competitors – But To Do So They Must Overcome These Risks
A recent survey of CEOs conducted by PricewaterhouseCoopers, the largest professional services firm in the world, reveals that American businesses are actively engaged in a race against one another, battling to be the first in their respective lines of business to extract sufficient value from the mass collections of data within their possession in order to establish major competitive advantages – creating optimized products, improving customer experiences, and establishing new revenue models.
In fact, of the 300 CEOs at US companies with revenues of $500 million or more who were polled, nearly 9 out of 10 believe that in 2019 their organizations have the potential to pull ahead of their rivals in the data-value-extrapolation race; while, obviously, 90% of firms will not succeed in achieving leadership positions versus their competitors, CEO expressions of such optimism and determination indicate a widespread cross-industry commitment to making valiant attempts at leveraging data in order to do so.
Such an approach is not surprising: Data is quickly becoming the lifeblood of the modern economy, a strategic resource that has evolved into perhaps the most valuable marketable commodity. Businesses that choose to ignore the amazing potential power of data to wisely guide business decisions will likely suffer from serious competitive disadvantages in the not so distant future.
What types of data do CEOs at leading firms consider most important?
The PWC survey results depict a clear consensus: Consumer data – especially as it relates to both current and predicted consumer preferences – was, by far, viewed by CEOs as the most valuable type of information to businesses. Such a result is not unexpected: properly understanding consumer data allows an organization to directly and dramatically improve its products, sales efforts, and marketing campaigns. Furthermore, as increasingly powerful artificial intelligence systems appear on the market, the value that organizations can extract from robust, comprehensive, and accurate data sets is likely to grow dramatically.
Ironically, perhaps, despite the fact that nearly all the CEOs polled considered consumer data to be important or even critical from a business perspective, only 15% of those polled believed that their organizations already possessed sufficiently comprehensive data sets in such areas – a likely indicator that many firms will seek to collect significantly more consumer information than they have obtained in the past.
Even after collecting data, organizations face obstacles in using it. One of the greatest challenges to extracting maximum value from data is that in order to make decisions based on data, an organization and its management must be able to fully trust the data and the data analysis process. If there are questions about the integrity, reliability, completeness, robustness, or security of the data itself, or questions about the competence or other areas of trustworthiness of the human and technical resources involved in collecting and analyzing the data, or if there are technical problems that cause data in some systems to be unable to be shared with other systems that could benefit from seeing it, or if outdated technology in use within data systems causes any one or more of a myriad of potential issues, incorrect conclusions may be drawn from the data, and flawed business decisions may be made.
Likewise, if anything involved in the data collection and analysis processes undermines the trust of the public (as we have seen occur in several social-media related incidents in recent years), or erodes the credibility of the firm in the eyes of regulators, data usage efforts may potentially harm the organization more than they help it. The regulatory issues are especially challenging because privacy-related regulations are still evolving – and are evolving differently in different geographies and amidst different cultures – creating a complex environment of disparate rules subject to frequent changes. Additionally, the dearth of legal precedents set forth in court rulings means that today’s understandings and interpretations of existing rules may not necessarily be those in place even in the near future.
The bottom line is that in order to be competitive in today’s world, organizations must start leveraging the true value of their data – and, if they do not have enough data in order to extract sufficient value, they must find a way to legally, ethically, and politely obtain the missing information. That said, any efforts to collect, analyze, and utilize data in order to realize its true maximum potential benefit will only succeed if the process, information, and systems involved can be trusted. Failing to address the issue of trust can not only undermine projects, it can cause a firm to fall behind its competitors in a race for success, potentially causing a disastrous failure in an era of data-based “survival of the fittest.”
This article was sponsored by PricewaterhouseCoopers. To learn more about PricewaterhouseCoopers’ trusted data optimization efforts, or to obtain a copy of the survey mentioned in the article, please visit: https://www.pwc.com/us/trusteddata