Emergence of Data

By Hannah Mills Posted November 22, 2018

THE EMERGENCE OF DATA AS AN ASSET

Through new technology and extensive developments in data science, businesses now have access to vast amounts of data. In 1996, digital storage became a more cost effective way of storing data than paper. Since then, the world has generated over 4.4 trillion gigabytes of digital information, and that volume is set to increase 10 times over by 2020. Even more significantly, a lower cost of access has made it a new, valuable asset. Businesses have unprecedented potential to derive differential value from data, using it to solve business issues and deliver outcomes that matter.

Some of the world’s most successful businesses are doing this already, exploiting data to generate accurate customer insight and power real time, insightful decision-making. Most other organisations understand that harnessing data as an asset is crucial to success. Research shows that 81% of businesses think data should be at the heart of every business decision. The appetite for data analytics has clearly landed.

Management Consultancies have reacted accordingly. EY spent $500 million developing a Global Analytics Centre of Excellence, and PWC have recruited 1,000 new Data Scientists over the last two years to enhance their Data Analytics offering. These and many other Consultancies have made significant investments to acquire or establish expertise in Data Analytics and Big Data, enabling them to extend these capabilities to their clients, and embed data at the heart of their clients’ businesses.

Given that 81% of organisations want to put data at the heart of their business strategy, we might expect Data Analytics to be key to most of the work that Management Consultants do for their clients, but this is not currently the case.
If they want to, why aren’t most businesses making the most of their data?
Not withstanding the actions of Management Consulting firms, for the most part, business leaders’ objectives regarding data have not yet translated into action. Statistics show that despite good intentions, the majority have not succeeded in changing behaviours, organisational structures or developing robust, powerful data analytics capabilities which enable the execution of business strategy.
of businesses describe themselves as “data-driven”.
The intent might be there, but most businesses have not yet galvanised their data analytics capabilities or unlocked the value of data as an enabler for performance improvement and decision-making.
of executives are still using intuition as their primary motivator when making decisions.
The FT Leading Management Consultants 2018 list shows that businesses are not engaging Management Consultants to help them develop these capabilities. Just 14% of the leading Consultancies were rated by their customers in the Data Analytics and Big Data consulting category.
of data gathered by organisations is currently considered business critical.
Of the 187 leading Consultancies listed by the FT, only 26 were rated in the Big Data and Data Analytics category. If we read the number of Consultancies rated in each category as an indication of where clients are focusing their attention and investment, this number is surprisingly small considering 81% of organisations say they want data to drive business decisions.

Given the volume and value of data being generated across all industries, it is all the more surprising that there are ten categories larger than Data Analytics and Big Data. How can Consultants specialising in IT Strategy and Financial institutions and Services, for instance, do so without also being experts in data analytics?
If 81% of businesses want to put data at the heart of all business decisions, why aren’t they asking their Management Consultants to help?
The Data Analytics and Big Data category is still smaller than expected because we are in a transition phase, marked by the emergence of Data Analytics and Big Data as a category in consulting. Despite this, there is still prevailing ambiguity about what Data Analytics and Big Data actually is, and how to incorporate it into business strategy. This is preventing business leaders from building a robust data strategy, or developing the right vocabulary to demand it from their Management Consultants.

This uncertainty may also be precluding business leaders from recognising that Data Analytics and Big Data already underpins some or all of the work being done by their Management Consultants. Even as Management Consultants stretch their own analytics capabilities during this transitional phase, the number of ratings in the Data Analytics and Big Data category will not grow until business leaders are able to recognise and celebrate it as a key component to the work produced by Management Consultants in all categories.
Consultancies rated in the Data Analytics and Big Data category vs. those rated in the "Data Preparation" categories
■ IT implementation, IT Strategy and/or Digital Transformation
■ Data Analytics and Big Data
The FT research suggests that this may not be far off. A larger proportion of the leading Management Consultancies are helping their clients establish digital capabilities, enabling them to generate, store and access data. Nearly a third of the leading Consultancies were rated by their clients in one or more of the three categories covering this activity – IT Strategy, Digital Transformation and IT Implementation. These are “Data Preparation” categories, giving businesses the tools to access and curate their own data, and help to clear up questions like “What data do I have access to?”, “What does analysing it actually mean?”, and “How do I go about doing that?”.

Businesses must know the answers to these questions, or at least be thinking about them, in order to articulate what they need, and how they want to put data at the heart of their businesses. Once these ambiguities have evaporated, Data Analytics and Big Data will be critical in all consulting categories.
The end of the transition phase
The culmination of this transition phase will be the end of Data Analytics and Big Data as a singular consulting category, which will become a prerequisite for Management Consultants across all sectors and services. Without it, leading Consultancies will fall behind competitors who can harness the value of data to achieve the outcomes that their clients need.

To give an example of how significant this value can be, Amazon’s superlative position in the retail market has derived from real time supply chain management and scrupulous customer analytics on a vast customer database. The result is a ubiquitous reputation and the capacity for the global distribution of over 1.5 billion items from just 200 fulfillment centres. Amazon leverages data to minimise fulfillment costs and timeframes, and can predict and prepare for customer demand even before an order has been made.

Even in categories that have not traditionally been digitized, like People & Performance or Organisation & Change, leveraging data can enhance successful recruitment, talent identification and organisational change management through HR and workforce analytics.

American airline JetBlue have used recruitment and workforce analytics to identify the key attributes presented in applicants that go on to be their most successful employees, and have designed the content and format of candidate assessments to help select for these. Having derived a relationship between applicants’ assessment scores and subsequent performance during training, they also raised their assessment thresholds to avoid excess attrition during the training process. The positive outcomes are clear. Attrition of trainee staff has fallen by 25%, and the airline was named America’s top employer in the transportation sector in 2017, and twelfth across all industries.
The age of Data Analytics and Big Data in business has arrived, and all Management Consultants must be able to curate and leverage data as an asset, using it to attack business challenges, target performance improvement and turn risks into opportunities for their clients.