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A major gap exists between how CEOs and lower-level managers view big data, according to the findings of a new study sponsored by big data and marketing applications specialist Teradata.
The study indicated that CEOs tend to look at big data through rose-colored glasses while lower-level managers appear to have different expectations.
The study showed that while 47 percent of CEOs said they believe that all employees have access to the data they need, only 27 percent of all respondents said that they do. Similarly, 43 percent of CEOs said they think relevant data is captured and made available in real time, compared with 29 percent of all respondents.
In addition, 38 percent of CEOs said that employees extract relevant insights, compared with 24 percent of all respondents and only 19 percent of senior vice presidents, vice presidents and directors.
“The survey is clear that organizations succeed when the data-driven vision and leadership are shared, and the benefits of data initiatives are consistently tracked, promoted and, most importantly, linked to corporate goals and business results,” Chris Twogood, vice president of products and services marketing at Teradata, said in a statement.
The survey, conducted by The Economist Intelligence Unit, showed that data-driven companies are more likely to outperform their competitors when it comes to profitability. However, only one in four companies gives financial rewards to employees who readily adopt the use of data.
Although many companies have invested significantly in gathering vast amounts of data, they still struggle to extract insights, put them to work for the business and create truly data-driven organizations, the study showed. When it comes to capturing and disseminating important business data, 57 percent of respondents said their companies do a poor job. The issue is significantly more pronounced among underperforming, less-technology-reliant companies. There is little disagreement that the access to necessary data and the ability to convert it into actionable insights are the greatest obstacles to data adoption and use.
However, the study indicated that data is not equally available, even within the most data-driven and top-performing companies. Two-thirds of respondents said some departments in their company have much better access to data than others. This situation is particularly acute among companies with $500 million in annual revenue or more.
Although CEOs are less aware of the problem, lower-level managers are very vocal about it. Eight in 10 senior vice presidents, vice presidents and directors agree that data is unequally available. At the same time, 42 percent of respondents said they find access to data cumbersome and not user-friendly, which further exacerbates the data-availability problem.
Moreover, respondents reported an abundance of useful internal, daily transaction data. But external data like customer demographics, behavioral patterns and market data are less widely available.
However, top-performing companies tend to be data-driven, according to the survey. Among top performers, 63 percent said data initiatives are launched and driven by their corporate leadership and 41 percent have a centralized data and analytics group responsible for introducing and implementing data initiatives. Of those who say their companies underperform in profitability, those numbers are 38 percent and 28 percent, respectively.
“Opportunities for analytics are expanding every day,” Teradata Chief Analytics Officer Bill Franks said in a statement. “Transforming from gut-led to data-driven requires cultural changes, and because companies are struggling in this area, they are missing opportunities.”
Additionally, the study showed a high correlation between a company’s tendency to rely on data when making decisions and its profitability and ability to innovate. Data-driven companies are more likely to generate higher profits than their competitors reporting a low reliance on data. Access to data and quantitative tools that convert numbers to insights are two to three times more common in data-centric companies. Plus, they are much more likely to reap the benefits of data initiatives—from increased information sharing, to greater collaboration, to better quality and speed of execution, the survey showed.
Companies that outperform their competitors also are much better at extracting the benefits of data. Seven in 10 of them said information and knowledge is shared quickly and freely in their company, compared with one-third of underperformers.
The Teradata-sponsored survey, conducted in the fall of 2014, reached 362 respondents: 47 percent from North America, 26 percent from the Asia-Pacific, and 27 percent from Europe. Respondents held a variety of functional roles: 29 percent were in general management, while 16 percent were in finance, 16 percent in marketing and sales, and 14 percent in strategy and business development, among others. Fifteen percent of respondents were chief executives or presidents; 29 percent were in other C-level roles; 25 percent were managing directors, executive directors or heads of business units; and 31 percent were vice president, senior vice presidents, or directors.