Data on the State of Data-Driven Decision Making in IT Enterprises

eWEEK DATA POINTS: Among other issues, a recent study found that effective communication among departments and from management to employees is lacking in many areas, causing conflicts that shouldn't happen in the first place.

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During the first week of February—prior to the COVD-19 pandemic lockdowns—Quantum Metric fielded a study of 500 full-time employees at medium (34%), large (31%) and very large (35%) companies working with and across departments to develop and build digital products better and faster. The topics covered opinions on how well companies were doing competitively and how much collaboration and conflict they had internally and how their organization’s made decisions.

The study also found that effective communication among departments and from management to employees is lacking in many areas, causing conflicts that shouldn't happen in the first place.

Here are the key findings:

Data Point No. 1: CEOs May Have Been Too Optimistic About Performance

Around half of all respondents believed their companies were outperforming other organizations in market share, speed at adjusting to customer demands, revenue, customer focus, diversity and inclusion, and being a great place to work prior to COVID-19 company lockdowns. Positive sentiment was largely driven by chief executives, with C-suite staff more likely to say they are outperforming on market share and being great place to work. Middle management, in particular, was more concerned about customer focus and speed of adjusting to customer demands.

Data Point No. 2: Technology Companies Are Their Own Worst Enemy

More than 80% of the employees in the tech sector believe they are better than their competitors at delivering digital products that customers find acceptable, with more than 50% of them saying they are “much better.”

Data Point No. 3: Customer Service Team Isn’t Feeling the Love

C-suite (77%) and IT (76%) believe departments across the organization have equal responsibility and are truly collaborative on ways to improve the customer-focused information they receive. Meanwhile, the nearly 40% of teams closest to the customer, such as customer service and marketing, think that their organizations are just “OK” and don’t always make it a priority to collaborate on customer-focused data.

Customer service appears to be the most data-disenfranchised, reporting that they are 57% less likely to have their own data analysis system and are the most likely department to report a lack of access to centralized data.

Customer service teams are nearly 20% less likely to say they work fairly well with developers than employees in other departments. They are 8% less likely to work well with product management. The frustration is probably related to the high percentage of trouble tickets closed without a fix or the number of requested enhancements that fall on deaf ears.

Data Point No. 4: Data Accessibility Is More Important Than Data Centralization

About one-third of organizations report that more than 80% of their data is centralized, but there is no relationship between that centralization and the ability to make better data-driven decisions. There is, however, a relationship between data accessibility and better data-driven decisions. Here again, the customer success team is more likely to report less data access.

Respondents who answered that more than 80% of data is accessible to all also reported a higher association with a positive collaborative environment. For those who find accessibility a problem at their organization, there is a steep cost to the business losing ground to competitors in terms of learning and adjusting to customer demands.

Data Point No. 5: The C-Suite Has Been Swimming in a Sea of Cognitive Dissonance

With more than 75% of C-suite respondents indicating they believe all departments are collaborating well and feeling equal responsibility, more than 60% of them also say they observe at least some conflict across every department. As leaders of the organization, C-suite members are responsible for enabling a culture of cooperation and collaboration, so they seek to maintain an internal consistency of cognitions and to avoid a state of tension. But when asked separately about the level of conflict, they recall conflict-filled meetings and conversations, which pierces the veil that the vision of their organization creates.

Data Point No. 6: Conflict Is Probably Underappreciated

The tech sector, which is weathering the COVID-19 downturn and has been delivering far superior stock market performance than most business segments, consistently ranks higher than any other industry in acknowledging higher levels of conflict. The retail industry, on the other hand, reports the lowest overall conflict. For example, the technology sector reports nearly double the amount of conflict between developers and customer service than the retail sector.

Data Point No. 7: Confusing Data Is Costly

Those who report that they cannot agree on what the data is telling them to do are 33% more likely to think they are losing ground on customer focus. And those who say they have difficulty interpreting how the data represents the customer point of view are 43% more likely to say they are losing ground on comparative performance around customer focus.

Confusing data is commonplace. Nearly 60% of employees say they frequently have debates over which data is correct across different departments and two-thirds of decisions that depend on cross-department alignment often have data that points in different directions.

Data Point No. 8: Data Has Been Weaponized by the Hierarchy

More than three-quarters of all employees (regardless of department) say that data is sometimes used by their managers to prove a point or support a department leader’s point of view rather than being purely objective. When asked to rank the ways decisions get made, more than one-quarter (27%) of all respondents named seniority as the top or second most method of making decisions in their organization.

Respondents who said decisions are made by seniority were:

  • 30% more likely to say they are losing ground to the competition in revenue
  • 59% more likely to say they are losing ground on market share
  • 78% more likely to say they are losing ground on customer focus

Data Point No. 9: Dictatorships Are Devastating

The “loudest person in the room” decision-making paradigm is the most likely to cause companies to lose ground to the competition in nearly every way. Respondent were far more likely to say:

  • they are losing ground to the competition in revenue
  • they are losing ground on market share
  • they are losing ground on customer focus
  • they are losing ground on speed at learning/adjusting to customer demands

The consequences of this style of decision-making are indeed devastating as this style was associated with a 71% increase in likelihood of employees' leaving their role in the next 12 months.

Data Point No. 10: Lockdowns, Layoffs Will Create More Employee Turnover in All the Wrong Places

Just as companies have been forced into massive digital transformation, many of their key change agents will take flight. Prior to COVID-19, nearly 50% of employees said they were likely to change roles by February 2021, with almost one-third saying they were “very likely” to leave. While that may be OK as companies look to cut costs, the problem will be that those charged with digital transformation, IT and development indicated they are the most likely to churn. Sixty-one percent of IT and 52% of development were expecting to leave.

Those who say they are losing ground to the competition are generally 30% more likely to say they expect to leave their role soon. Conflict and data disagreement are also leading causes.

Methodology

  • 500 U.S. professionals completed this online survey and incentivized with points
  • Fielding took place between Feb. 25 and March 1, 2020
  • Respondents were: employed full-time, work at an enterprise with 500+ employees
  • Margin of error is +/- 4.4 percentage points at the 95% confidence level.

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