By now, just about everyone realizes the importance of data. It’s viewed as a competitive advantage and a source of powerful insights—and nearly 85% of organizations see data as their most valuable assets. Organizations want to be data-driven, but they’re finding it’s easier said than done.
Gathering data isn’t the problem. Most companies have more data than they know what to do with—however, they lack the insight necessary to access, understand, and use that data. Data without data literacy is about as useful as a screen door on a submarine.
To discover how businesses around the world are using data, Experian (the world’s leading global information services company) launched a global study of over 1,100 people across 6 countries. Their findings paint a grim picture of data management for a surprising number of companies, but the report also uncovers key solutions for moving data usage and supervision in the right direction.
Poor Data Is Spoiling the Whole Barrel
A number of important business initiatives are tied to data: machine learning, customer experience, operational efficiency, and more. However, organizations don’t trust their data enough to use it.
Businesses believe that almost 1/3 of their data contains some inaccuracies, and almost 1/2 don’t trust their CRM (customer relationship management) data. This is especially concerning given that 98% of organizations believe high-quality data is either extremely important or important to achieving objectives.
“Poor data is often entangling entire organizations with crippling effects, preventing timely decision-making and negatively impacting customer experience,” says Steve Philpotts, general manager at Experian. This high distrust makes even clean data unusable, wasting valuable resources and eliminating a powerful business asset.
To regain confidence in data, businesses need to demonstrate quick data-driven wins. They need to prove to their managers and employees how reliable data can achieve business objectives. Quick wins can help to transform company culture from data doubt into data confidence.
Data Debt Is Undermining ROI
Experian defines data debt as the “accumulated cost that is associated with the suboptimal governance of data assets…like technical debt.” Data debt challenges 78% of businesses, and 66% say existing data debt negatively impacts new management initiatives.
After all the effort of collecting, storing, and analyzing data, over 1/3 of companies can’t find value from new technology investments. And very few of these companies know what to do about it—they’re stuck in a spiraling cycle of debt, distrust, and no ROI.
For companies with a data debt problem, only 24% have a plan to deal with it. Close to 60% find it difficult to know where to start.
To remedy the cycle, Erin Haselkorn, head of market research at Experian, recommends painting a complete picture of bad data’s consequences. Understanding the impact of data debt can get everyone on the same page and make improvement a priority.
To eliminate data debt, companies need to invest in higher data quality—an investment that might seem counterintuitive. This decision involves improving standards, checks, and processes around how data is captured, maintained, and used. Increased trust in data makes it more usable and boosts its associated ROI, helping eliminate data debt.
Data Literacy Is Vital But Absent
Organizations want to be more data-driven, but they lack the skills and resources necessary to make it happen. 70% of businesses believe that a lack of data literacy skills reduces the value they see from their data and technology investments. The natural solution would be to hire more data-savvy employees, but a skills gap has led to more data roles to fill than qualified candidates available.
Due to the challenge of hiring for data-specific roles (analysts, engineers, scientists, etc.), businesses are turning to data literacy programs to educate their existing teams and change their culture. With hands-on tutorials and data storytelling, these businesses strive to make data literacy a fundamental skill for the whole organization.
Even with data management training, some technologies are just less user-friendly than others. Take a look at your existing tech stack and see if it’s usable by more than just the data pros. When your marketing and sales experts can start harnessing the power of data, that’s when you’ll start seeing more data-informed decision-making.
Data Dreams Can Come True
While there’s certainly room for improvement for how businesses manage and use data, the desire to make it happen already exists. Leaders see the value of data and want to harness its potential—they just lack the know-how to implement it.
By focusing on data quality and investing in new and current talent, businesses can rebuild lost trust in the numbers. Each small data win plays a big part in the collective mission to create a data-driven business—it won’t happen overnight, but data dreams can come true with the right strategic approach. To learn more about how organizations view data, take a look at Experian’s 2020 Global data management research.