The data directive - The EIU report on how data is driving corporate strategy

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The data directive is an Economist Intelligence Unit (EIU) report which seeks to explore the degree to which the ongoing data revolution within business is delivering truly strategic change within companies, as opposed to more incremental optimisation gains. Although many of the issues discussed here stray into the realm of so-called “big data”, this report is not explicitly focussed on that topic and not deal with any technology-related issues. Instead, it seeks to explore how the wider trend toward a greater reliance on data is affecting the strategic management of businesses at a C-suite level, across a range of industries. There is also a supplement to this report available that focuses on the strategic impact of data on CFO's and the finance function. http://bit.ly/thedatadirective_mt

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The data directive - The EIU report on how data is driving corporate strategy

  1. 1. The data directiveHow data is driving corporate strategy—and what still lies aheadAn Economist Intelligence Unit reportCommissioned by
  2. 2. 1© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadContentsAbout the research 2Executive summary 4Introduction: The data revolution: optimisation gain, strategic strain? 7 Case study: Turning digital risk into opportunity at Universal Music 8Functional gains: The organisational data leaders 10 Case study: Optimising sales at Anheuser-Busch 15 Case study: Rethinking customer value at a retail bank 16Insight-led business? A sector perspective on data 17 Case study: Transitioning from physical products to data services at Xerox 20The outliers: Who’s ahead on the data game? 21Noise, overload and trust: The data challenges 26 Case study: Building a data-centric business at Samsung 29 Case study: Cargill, strategy and the rise of the so-called super quants 30Conclusion: The leadership considerations ahead 31Appendix: Survey results 33
  3. 3. 2 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadAbout theresearchThe data directive is an Economist Intelligence Unit (EIU)report, commissioned by Wipro. It seeks to explore the degreeto which the ongoing data revolution within business isdelivering truly strategic change within companies, as opposedto more incremental optimisation gains. Although many ofthe issues discussed here stray into the realm of so-called “bigdata”, this report is not explicitly focussed on that topic anddoes not deal with any technology-related issues. Instead, itseeks to explore how the wider trend toward a greater relianceon data is affecting the strategic management of businesses ata C-suite level, across a range of industries. The findings andviews expressed in this report are those of the EIU alone and donot necessarily reflect the views of the sponsor.The research draws on two primary inputs:l The first is a wide-ranging survey of 318 C-suite executivesor their direct reports, divided between CEOs (13%), CFOs(20%), COOs (13%), CIOs (12%), CMOs (9%), and other C-suiteroles. From an industry perspective, all major sectors wererepresented, with the largest being manufacturing, includingchemicals and aerospace (18%), retail and consumer goods(11%), technology, media and telecommunications (15%),financial services (10%), and professional services (9%).Regionally, respondents hailed from North America (48%),Europe (29%) and Asia-Pacific (24%).l The second key input is 20 in-depth interviews with businessexecutives and experts, as listed below. In addition, weconducted extensive desk research into the broader topic.James Watson is the author of the report and David Line is theeditor. Kim Thomas, Sarah Fister Gale, Priyanka Mehra Dayal,and Fergal Byrne assisted with further interviews. We wouldlike to thank all survey respondents and interviewees for theirtime and insights (listed alphabetically by company name):l Rajendran S, chief marketing officer, Acer Indial David Johnston, group chief operating officer, Aimial David Almeida, vice-president: sales, Anheuser-Buschl Philip Clement, global chief marketing officer, Aonl Irvin Newbitt, vice-president: enterprise IT, AstraZenecal Rudy Puryear, director and global head: IT practice, Bain Col Julian Gray, chief information officer, BP Alternative Energyl Professor Andy Neely, director, Cambridge Service Alliancel Mike Balay, vice-president: strategy and businessdevelopment, Cargilll Ged Brannan, head of Coutts Experience, Couttsl Greg Nichelsen, head of business intelligence, ING Directl Christian Nelissen, director: customer analytics anddecisioning, Royal Bank of Scotlandl Asim Warsi, vice president: mobile, Samsung Indial Jason Trost, chief executive officer and co-founder, Smarketsl Michel Allé, chief financial officer, SNCB Holdingl Kenneth Cukier, data editor, The Economist
  4. 4. 3© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadl Paul Gathercole, vice-president: digital tools, UniversalMusicl Christa Carone, chief marketing officer, Xerox Corporationl Chief operating officer, Fortune 100 retail bankl Chief financial officer, Fortune 100 chemicals businessl Chief financial officer, Fortune 500 retailer
  5. 5. 4 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadIn July 1995, a former hedge fund executivelaunched a website that aimed to upend thetraditional way of selling consumer goods,starting with books but soon expanding into adiverse array of products. Dubbed Amazon.com,Jeff Bezos’s business went on to disrupt not onlythe way people typically shop, but also the bookpublishing industry itself, en route to becomingthe world’s largest online retailer. It now servesas a prime example of how technology canenable innovative companies to fundamentallyrethink the way business is done, as opposed tomerely optimising existing processes.In much the same way that the internet wasthe fundamental disruptive technology drivingcorporate strategic change in the 1990s,today the myriad forms of data emerging fromour internet-enabled digital world promise asimilar transformation. Very few executivesneed convincing that having more data abouttheir products, people and processes can beempowering—and profitable. But how far hasthe data-driven revolution gone? How manycompanies have followed pioneers like Amazoninto transforming their strategy—and potentiallytheir industry—through data-driven insights?This study seeks to examine the progress thatexecutives have made in using information totransform their business. It highlights some ofthe striking gains that are being achieved so far,as companies rush to capture all kinds of newinsights. From beer companies like Anheuser-Busch using data to understand where, how andwhen to place its products to optimise sales,through to businesses like Universal Music usingdata to better identify up-and-coming artists.But the research also uncovers how much workremains to be done, in terms of genuinelymaking use of the transformational potential ofdata within business. Right now, however, mostbusinesses are focused on using this to optimisetheir existing approaches and processes; farfewer have found wholly new ways of operating,or breakthrough opportunities.The report’s key findings include:l A strong relationship between earningsgrowth and strategic use of data. Althoughcorrelation does not suggest causality, this studyfinds sharp differences between “high growth”firms, based on their EBITDA performance overthe past three years, as compared to their “nogrowth” peers. For example, even though bothsets of firms collect lots of data, high-growthfirms make far better use of it, while no-growthfirms are more likely to find themselves swampedby the data they hold. Similarly, twice as manyhigh-growth firms consider themselves highlyeffective at extracting insights from data, ascompared to no-growth companies. High-growth firms have also done more to reformExecutivesummary
  6. 6. 5© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadtheir structures and leadership around data,suggesting greater internal maturity on thisissue. In particular, they are more than twice aslikely to have a well-defined data managementstrategy in place.l All C-suite functions are finding uses fordata, but so far data has proved most valuablefor marketing leaders. From better ways tosegment the customer base, to rethinking theideal product mix in a retail store, marketingleaders are finding wide-ranging uses fortheir data to help improve how they markettheir company’s wares. Already, 50% of chiefmarketing officers say they have tried and founda clear, positive difference in using data toimprove their understanding of customers, asjust one of a range of successful applications.This is a markedly higher proportion than theirC-suite peers.l The financial services sector, technologycompanies, and professional services firmsare most prepared for the data age. One of thekey indicators identified within the survey isthe degree to which a company has establisheda well-defined data management strategy.Considering this core metric, three sectors standout as being most prepared for the data age: thefinancial services sector (where 22% have this inplace); the technology industry (30%); and theprofessional services sector (40%). By contrast,data management strategies are least often foundamongst manufacturers (16%) or retailers (13%).l Many companies are unsure aboutthe extent of data-fuelled strategictransformation within their business.Companies of all kinds are finding impressiveways to use data to optimise their sales,marketing and other functions. Moreover,68% of respondents think their strategy hasimproved in the past two years as a resultof having more data. But only 18% see asignificant improvement in strategy, and fewhave found ways to use data to make a genuinelytransformational shift in the business. Some35% of executives agree that data has been moreuseful with operational choices and actions,rather than strategic ones. Just 22% disagree,while 41% are unsure. Moreover, while 72% ofcompanies regard themselves as effective atextracting strategic insights from data, only12% of executives polled for this study considertheir companies to be “highly effective” in thisregard. Similarly, for what is usually a confidentexecutive audience, unusually high proportionsof survey respondents regard themselves asbelow average on this issue, including 20% ofCOOs and 17% of CFOs.l Businesses are stockpiling an ever-growingrange of data and expect data gathering tocontinue to expand rapidly. Whether socialmedia sentiment, machine-generated data viasensors, staff emails, market data or otherwise,firms of all shapes and sizes are now collectingmore information than ever before. At least sevenin ten companies collect syndicated third-partydata, such as weather information (72%), orgovernment data (70%), while many gatheranything from internal staff data (66%) to somekind of location-based information (41%), amongmany other types. Two-thirds of business leaderssay the range and types of data have expandedin the past two years, while about three-quartersexpect this data stockpiling to expand yet furtherin the coming two years.l Working out which data matters most is thetop challenge for firms, but there are wide-ranging issues to overcome. For companiesseeking to gain more strategic insights fromtheir data, many hurdles await. Whetherorganisational silos, a lack of skills, the usualdisconnects between IT and the business, orworries over data quality, few consider thechallenges and gaps easy to bridge. But clarityon which data matters most, amidst the datastockpiling now under way, is what tops the listof barriers, according to 40% of respondents.Furthermore, 34% of executives worry thatthe quality of their decisions are actually beingimpaired by data overload.
  7. 7. 6 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadl Those companies that claim to be bestat extracting insights from data are notnecessarily looking to their CIOs to lead on thisinitiative. While the CIO is the default leader ofchoice across the vast majority of firms surveyed,there is a spike to preference towards the CEO andother C-suite leaders among those companiesbest at extracting strategic insights from data.This group is also nearly eight times as likely tohave a data management strategy; and four timesas likely to have changed the way they makestrategic decisions. As with the high-growth firmssub-set, they are typically far more likely to seescope for radical transformation of the businessthrough better use of data.
  8. 8. 7© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadThis report agrees wholeheartedly that many ofthese new bets on data will pay off. However,for the majority of businesses, much evolutionlies ahead. Philip Clement, the global chiefmarketing officer of Aon, an insurance company,gives the analogy of how Amazon.com, in themid-1990s, promised to become one of thebiggest global retailers. It seemed like a joke atthe time, he says. “It was true, but it just took 15years longer than anyone imagined.”This is not to suggest that the issue of data isnot a priority in boardroom discussions today.This survey of over 300 C-suite executives,spanning a range of industries and functions,suggests that only a tiny fraction (3%) are notcurrently prioritising the collection of data.Whether social media feeds, machine-generateddata via sensors and telematics, call-centrerecordings, staff emails, syndicated information,or data from other more exotic sources, a highproportion of companies are storing increasing1“Big data: The next frontierfor innovation, competitionand productivity”, McKinseyGlobal Institute, May 2011The data revolution: optimisation gain,strategic strain?There is much hype about the strategic impact of data, and many new bets on it willundoubtedly pay off. However, while some companies are making strategic changes basedon data, as distinct from optimisation gains, many are yet to do so.IntroductionDiscussions about the transformational powerof data have been hard to miss in recent years.Indeed, speculation over the impact of all aspectsof data, including so-called “big data”, hasbecome so frequent and over-hyped that it isdifficult to separate the signal from the noise.It is now two years since the McKinsey GlobalInstitute released its landmark study on thesubject, which marked an inflection point forbusiness.1 McKinsey argued that the subject wasnow relevant “for leaders across every sector”,with business “on the cusp of a tremendous waveof innovation, productivity and growth” as aresult of data.In many respects, the current data gold rushis reminiscent of the latter part of the 1990sand the rush to get to grips with the emergingInternet era. Today, just as then, profoundpromises are being made about the strategicimpact of data, but for the time being examplesof the potential coming to fruition remain few.
  9. 9. 8 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadamounts of data in the belief that it will be ofvalue to them. McKinsey’s 2011 report alreadyhighlighted that 15 out of 17 sectors in the UShad more data stored per company than theinformation contained in the US Library ofCongress.Moreover, while it is true that 72% of executivespolled consider themselves effective in translatingthese data sources into insightful informationthat can drive changes of strategy (Figure 1),only a small minority (12%) consider themselves“highly effective” in this regard. As this reportwill argue, there are many impressive examples ofhow companies are using data to optimise manyaspects of their business. However, there is far lessevidence that corporate leaders are systematicallyusing it to strategically transform their companiesor business models. “This is the continuum,”argues Kenneth Cukier, The Economist’s datacorrespondent and author of the recently releasedBig data,2 “By being a data-driven company, areyou using data to optimise what you’re doingtoday, or are you taking this information to dosomething totally new?”From data to insightsOrganisational effectiveness at translating new data sources/types of datainto insightful information to drive strategic change(% respondents)Figure 1Highly effectiveSomewhat effectiveSomewhat ineffectiveHighly ineffectiveNeither effective nor ineffective12602062Source: Economist Intelligence Unit survey2Big Data: A RevolutionThat Will Transform How WeLive, Work, and Think, ViktorMayer-Schonberger andKenneth Cukier, March 2013What a difference a few years make. Backin 2006, Universal Music made headlineswith a lawsuit filed against MySpace, theentertainment-oriented social network,for copyright infringement. Since then, theworld of music has gone increasingly digital,with wholly new music distribution modelsemerging, even as MySpace has faded. ButUniversal Music has been constantly evolvingover the past decade too, using data to help itshift from a defensive risk-oriented strategy toan offensive, opportunity-led one.In many respects, this is a very literaltransition: the same data team that onceworked to contain digital piracy risks has beentransformed into a source of insight for signingand marketing new hits. This Digital Tools team,lead by Paul Gathercole, has spearheaded thecreation of a powerful data platform, which nowhelps to guide executives on their decisions andinvestments. This platform draws on diversedata, from online music services’ streamingdata, to social media and web sentimentanalysis, to physical sales, to stars’ concert andTV appearances, among other things, and it isreshaping how the company works and thinks.“Our data team now handles queries fromall parts of the business, such as asking for aprecise breakdown of how popular a given artistmight be across various digital and analoguechannels,” explains Mr Gathercole.As this data platform has grown in scale andcapability, it is in turn changing the business.“The key thing that can change people’sperceptions is the nuance you can get fromthe data,” says Mr Gathercole. “It’s a longpath, but Universal has changed a lot in thelast three years and the degree of openness todata has changed dramatically. The questionswe receive are better and meatier, which isindicative of an organisation educating itselfand raising its ability to use and converseabout data meaningfully.”Case study: Turning digital risk into opportunityat Universal Music
  10. 10. 9© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadOf course, there are many examples of companieswho’ve made data the core of their businessmodels and who couldn’t exist without it. Thesefirms are predominantly within the high-techsector and financial services sector—whetherGoogle, Amazon, or one of many hedge fundsthat compete on their ability to uncover insightsfrom information. Overall, a small core ofbusinesses are genuinely rethinking what datameans for them, and how to organise themselvesaround it. But apart from these outliers, thereare relatively few that have worked out how totruly reshape their business around data. Quitesimply, for many companies today, the real datarevolution still lies ahead. “This is the breakoutmoment,” believes Mr Cukier. “Everyone has beenlearning about it, figuring out what it can do, butfor most companies, they haven’t done it yet.”
  11. 11. 10 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadAcross the sweep of companies surveyed for thisreport, a diverse array of data sources are beingtapped into, as the rush to stockpile informationgathers pace. From syndicated third-party data,such as market data (which 72% of companiessay they collect; Figure 2), to open data suppliedby governments (70% collect), to staff emailsor messaging (66% collect), to contact centredata (62% collect), collection from all sourcesis on the rise. Customer-related information isalso increasingly common, from social mediafeeds (42% collect) through to location-basedinformation of some kind (41% collect).And this is hardly all. When asked to specifysome of the types of information collected,respondents listed examples ranging fromcompetitor information and web sentimentdata, through to point of sale feeds, machine-to-machine data, news and media, loyaltyinformation, search engine analysis, censusbureau data, and RFID tags, to name just a few.Overall, two-thirds (67%) of executives say therange and types of data they rely on to makedecisions have expanded over the past two years;and three-quarters (74%) expect this trend toFunctional gains: The organisationaldata leaders1So far, CMOs are reporting the most clear gains from their companies’ data strategies.From data to insightsNon-traditional data collection trends(% respondents)Figure 2Syndicated data from third-party data providers(eg, market data, weather, etc)Open data (eg, data released by governments)Contact centre data (eg, audio conversations,text chats, customer emails, etc)Machine generated data (eg, sensors, smartgrid, RFID, network logs, telematics, etc)Social media (eg, Facebook, Twitter, YouTube,blogs, etc)Location-based information (eg, GPS, mobilelogins, etc)Staff data (eg, Emails, calendars, instantmessaging, etc)72.2 12 11.7 4.170.3 9.5 15.5 4.765.5 10.8 18 5.762 11.1 23.4 3.551.1 29.212.7 742 3617.7 4.441 31.422.5 5.1Collects Plans to collect Does not collect Don’t knowSource: Economist Intelligence Unit survey
  12. 12. 11© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadcontinue over the coming two years. In short, it isdifficult to find examples of data that companiesdo not seek to squirrel away for possible use. Butwhich functions within the business are actuallymaking real use of this data?A marketer’s delightOf all the C-suite roles examined for this report,the function that stands out as the singlelargest successful user of data appears to bethe chief marketing officer. Of those polled,50% report having tested and seen a clear,positive difference in using data to improve theirunderstanding and segmentation of customers(Figure 3). A further 40% see similar merit inhelping to increase sales, among various otherbenefits. This degree of usage is well ahead ofnearly all other C-suite roles.This is consistent with the views of manymarketing and sales leaders interviewed forthis report. Ged Brannan, Head of CouttsExperience at the private bank, says that his firmhas invested significantly in a new technologyplatform to create the opportunity to capture andleverage data, as part of a new strategic focusunder its latest CEO. The opportunity arisingfrom this investment relates to significantlyimproving its ability to make use of bothfinancial and non-financial information to betterunderstand clients’ behavioural patterns. “Wewant to serve the clients in the markets we wantto be in, rather than trying to be all things to allpeople,” explains Mr Brannan. The core of this isstill coming in place, but Mr Brannan is workingto create a more evidence-based managementapproach. One example of the type of opportunitythat exists could be tracking the working habitsof high performing staff, to discern if any traitscan be more widely adapted elsewhere.At Aon, Mr Clement says the scope of how datacan improve marketing is “absolutely huge,”as he puts it. Automotive marketers would useanalytics to simply try to identify the typicalcharacteristics of consumers who might, say, beinterested in a car type - like muscle cars. “Now,it’s just the opposite, you literally know who theperson is that likes muscle cars,” he says. Across arange of interviews, many such examples emerge,especially within customer-centric organisations,of how data are helping improve customerunderstanding and, ultimately, sales.Even outside of the sales and marketingfunction, other executives are often involvedin supporting such initiatives. At Royal Bank ofScotland (RBS), some of the most high-profile,data-centric initiatives of the past few years haverelated to trying to gain a far more advancedunderstanding of customers. “There’s been ahuge shift in the organisation, driven by anunderstanding of how customers bring value tothe bank. It might sound obvious, but once youstart seeing these values, you start to actuallyWhere data delivers for CMOsTop strategic aspects of role in which data has made biggest positivedifference(% respondents selecting in top three choices)Figure 3Increasing customer understanding andsegmentationIncreasing salesImproving return on marketingOptimising marketing mixImproving cross channel experienceOther, please specifyNone of the aboveImproving pricing optimisationIncreasing cross-selling effortsImproving customer serviceHelping assess potential demand for newproducts/services504037272317171713707Source: Economist Intelligence Unit surveyGaining better grasp of competitive landscape
  13. 13. 12 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadFigure 4: Where data delivers…Top strategic aspects of role in which data has made biggest positive difference(% respondents selecting in top three choices)CEO % CFO % COO %Geographic expansion 40.0 Improving scenario planning and forecasting 40.3 Improving operational efficiency 48.8Identifying new business models 35.0 Improving financial close management 33.9 Improving product research and/ordevelopment39.0Gaining better insights into thecompetitive landscape32.5 Improving profitability 32.3 Improving product/service quality 36.6CMO % CSO % CIO/CTO %Increasing customer understanding andsegmentation50.0 Identifying new business models 31.8 Managing/controlling IT spending 45.8Increasing sales 40.0 Identifying new revenue streams 31.8 Allowing for better business processes 44.1Helping assess potential demand for newproducts/services36.7 Identifying new markets 31.8 Improving identification of risks / riskmanagement28.8Source: Economist Intelligence Unit surveyFigure 5: …and where it has greatest potential to deliverTop strategic aspects of role in which data has potential to make biggest difference(% respondents selecting in top three choices)CEO % CFO % COO %Improving risk management 32.5 Improving financial risk management 24.2 Delivering process innovation 31.7Improving organisational productivity 30.0 Improving corporate reporting / dashboards 22.6 Improving resource usage 31.7Identifying new revenue streams 25.0 Identifying cost efficiencies 21.0 Improving inventory management 24.4CMO % CSO % CIO/CTO %Increasing cross-selling efforts 33.3 Improving medium-/long-term planning 36.4 Identifying business transformationopportunities25.4Optimising marketing mix 26.7 Improving scenario planning 31.8 Improving support for data-enabledstrategic decisions across the business23.7Improving pricing optimisation 26.7 Gaining better grasp of competitivelandscape27.3 Improving scenario planning andforecasting22.0Source: Economist Intelligence Unit surveyunderstand all sorts of interesting things,”explains Christian Nelissen, the bank’s directorfor customer analytics and decisioning. This helpsthe bank rethink how it incentivises behaviourinternally, to focus more on building the valueof the customer relationship through meetingtheir needs and working to keep them within thebank. “This means staff become interested inhow happy the customer is, which changes thedynamic,” says Mr Nelissen.Professor Andy Neely, director of the CambridgeService Alliance, a group of companies andacademics, adds that data provides vastopportunity to innovate on service delivery andsales. “It will go a long way beyond ‘how do I sellmore strawberry pop tarts’ to actually ‘how do Ireally deliver value to my customers’,” he says.Back-office boostMarketing is currently the most immediatelyvisible user of data but other functions in thebusiness are making wide-ranging use of datato support myriad initiatives. As businessesglobalise, for example, data has made a clearpositive difference to CEOs in how they planfor geographic expansion (40% say they’vebenefitted from this). For four in ten CFOs, it’sopened up a raft of possibilities around scenariosand forecasting. Nearly half (49%) of COOs saydata has helped to bolster operational efficiency,
  14. 14. 13© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadwhile about one-third (32%) of chief strategyofficers are using it to help identify new revenuestreams or markets or business models. And manyCIOs are using it to control IT spending or improvebusiness processes (see Figures 4 and 5 for a fulloverview).Across varying roles, there are wide-rangingexamples of how data are being used. The CFOof a Fortune 100 chemicals company, who askedto remain anonymous due to the sensitivenature of the work, says his function has beensignificantly increasing its use of data to improveits competitive intelligence and thus pricingstructures. “As we’ve begun to learn moreabout data opportunities, it’s allowed us tobetter analyse the competitive set that we playagainst in terms of pricing, cost structures, theingredients of their products versus ours, costpositions, and market approaches,” he explains.This is all analysed in the pursuit of competitivegaps. Further downstream, it also drives otherfinance-led forecasting, such as how projecteddemand is affected by price shifts, the ability tosupply that demand, and where excess capacitymight lie. “It gives us a better sense of ourcapacity to respond,” he says.At BP Alternative Energy, CIO Julian Gray notesthat his company is a huge user of data, acrossnearly every part of the business, from seismicmodelling in its upstream exploration, through toin-depth farming and meteorological data in itsbiofuels business. “All of those areas are growingimmensely,” he says. Inevitably, though, somefunctional roles take differing views on data. TheCFO, for example, is often closely engaged withdata issues, given the nature of the role. But asour survey suggests, CFOs often seek to act asthe voice of caution on data—many more see arisk that data overload provides false comfort tothe business, for example. They are also far morelikely to note difficulties in identifying which dataare truly relevant to strategy, and which to ignore(a subsequent report will examine the role of theCFO in more depth).Tactical or strategic?This chapter has highlighted a few of the keyareas where C-suite leaders are making use ofUncharacteristically uncertainUsage of data compared to industry peers(% respondents)Figure 6CIO/CTOCSOCOOCFOCEOCMO1.7 45.8 40.7 3.43.4 6.113.6 31.840.9 9.1 4.56.7 50 30 10 3.339 36.6 17.1 2.4 4.98.1 14.5 1.625.8 45.2 4.815.4 35.9 10.335.9 2.6Significantly above average Somewhat above average About averageSomewhat below average Significantly below average Don’t knowSource: Economist Intelligence Unit survey
  15. 15. 14 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheaddata today. But two things stand out from ananalysis of this. The first is that for a cohort oftypically confident and bullish executives, today’sleaders are unusually humble about their graspof data. Just 15% of CEOs consider themselves“significantly above average” in their use ofdata, while nearly the same amount think they’rebelow average (Figure 6). One in five COOs regardthemselves as below average, as do 17% ofCFOs—all unusually high proportions.The second, more important point that standsout from the survey, and which is confirmedby interviews for this report, is that the use ofdata today often centres on optimising existingprocesses and tactics, rather than drivinggenuine strategic transformation.For example, although one in two executivesagree that strategic decision-making hasimproved since they began prioritising data,there is far less certainly about the degreeto which data are more useful for day-to-dayoperational issues versus genuinely strategicones. About one in three (35%) agree thatgreater use of data has been more pertinentfor operational choices and actions, ratherthan strategic ones, while only about one-fifth(22%) disagree. The biggest proportion (41%)remains undecided. “It’s within the day-to-dayperspective where the data use is more heavilyfocussed right now, as opposed to the longer-term strategic planning,” says the chemicalcompany CFO.David Johnston, now group chief operatingofficer at Aimia3, a loyalty-scheme managementcompany, agrees that a lot of the data in businesstoday is being used to help optimise processes,versus more fundamental change. Nevertheless,he sees a growing number of examples where it ishelping spark new products, ideas or businesses.Take one of his company’s latest offerings, apartnership between Yahoo and Aimia’s loyaltybrand Nectar, which offers customers pointsin exchange for search-related advertisementsthat are far more precisely targeted. “We candeliver far more targeted adverts, because weknow your purchasing behaviour,” explainsMr Johnston. This also enables advertisers tomore explicitly match their before and afteradvertising performance against actual sales fora given audience. “This is one of several otheropportunities and new business models we seeout there,” says Mr Johnston.Data-driven strategyCorporate planning and decision making(% respondents)Figure 7Highly data-drivenOccasionally or partly data-drivenSomewhat data-driven32252125554245Source: Economist Intelligence Unit surveyRarely data-drivenStrategic planning Strategic decision making3At the time of beinginterviewed, Mr Johnstonwas the company’sexecutive vice president,president and chiefexecutive officer for EMEA.
  16. 16. 15© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadWhile some companies are basing strategicplanning and decision making on data, someare yet to leverage data for strategic use. Aboutone-third of executives overall consider theircompany’s strategic planning to be highly datadriven, although 42% say it is somewhat data-driven (Figure 7). Fewer think the same withregards to strategic decision-making, wherejust 25% say it is “highly” data-driven and 30%reckon this is only occasionally or rarely thecase. This is not to say that they don’t recognisethe importance: four in ten consider increaseddata volumes to be “highly” important for suchstrategic issues, while only a tiny minority thinkit unimportant. Instead, this further showcasesthe fact that few companies have got to grips withhow to rethink their companies around data, evenas they rush to collect more of it.For global beer brand Anheuser-Busch, thescience of selling beer has long been asrigorous a process as its efforts to createcompelling new craft brews. As early as 2004,the company was cited as a leader for its effortto create BudNet, its data platform for trackingsales. But over the past two years, explainsDavid Almeida, the company’s vice-president ofsales, it has invested substantially to developthis platform further.“It now means that I can look at any givenaccount, see a detailed plan of the storeand all our SKUs [stock-keeping units], withrelated data on local households from a rangeof sources. I can then use the data to choosethe optimal assortment of beer for that store,knowing which SKUs will perform better, whatthe best display options are, and the bestconfiguration of brands for that demographic,”explains Mr Almeida. “We think this data willseparate us from our competitors.”Of course, as he readily highlights, there’s aconstant challenge of ensuring that this datadoesn’t overwhelm sales. Or, more crucially,that niche fads are not chased at the expenseof mainstream sales. “One of the biggestchallenges has been the move towards growingcraft segments, which leads to more SKUsand more choice, but which pose a complexitychallenge,” he says. By blindly chasing thishigh-growth, but niche, market, Mr Almeidasays the industry has hurt sales by crowdingout shelf space for mainstream brands. “Ouranalysis shows that even craft beer buyers onlybuy such brands 30-40% of the time. For therest, they’re buying premium or discount beers,so the craft infatuation loses shoppers whencore brands are out of stock more often.”All this has led to greater refinement of thefirm’s portfolio approach across its 500 SKUs.“I’m trying to generate an environment wherethe vast majority of our decisions are basedon data, and knowing what will work,” says MrAlmeida.Case study: Optimising sales at Anheuser-Busch
  17. 17. 16 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadAll businesses have a core of most valuableclients. The challenge lies in identifying whothese are, and then considering how best toreshape the business around them. This hasbeen one of several data-intensive exercisesthat a major European retail bank has gonethrough in recent years.“We all know the 80:20 rule, but we’ve reviewedthe distribution of our revenues across ourcustomer base, in order to split these intodistinct cells,” explains the bank’s COO, whoasked to remain anonymous given the sensitivenature of its work. The resulting findings were“pretty astounding”, he says, and have resetlong-held assumptions within the leadershipteam by showing the high concentration ofrevenue within a relatively small number ofcustomers. “It really highlights the fact thatabout half of your customer base essentiallygenerates no revenue,” he explains.Many companies segment customers like this,but today’s technology is allowing for fardeeper analysis. “We analysed the bottom 50%of customers, to see what products they use,how many ATM withdrawals they make and howmany phone calls we get from them. It provesthat these customers take up a substantialamount of operational capacity,” says the COO.“The normal reaction is that you always needthe volume to cover your fixed costs, but that’sabsolutely wrong. They simply do not generateenough revenue to do so.”This poses a challenge to management. Giventhat no bank could “fire” half of its customerbase, how can this issue be addressed? Howdoes the bank identify valuable clients fromthose who only use the bank as a secondaryaccount? And how do you restructure yourbusiness for those clients that do matter most?These are the kinds of questions that are nowbeing grappled with internally. But it is clearthat such insights have reset core internalassumptions: “Seeing results that no-onethought possible has really changed mindsets,”says the COO. “And we all have preset ideasabout what reality looks like.”Case study: Rethinking customer value in retailbanking
  18. 18. 17© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadInsight-led business? A sectorperspective on data2Although it is not difficult to find examples ofdata-centric companies in nearly any industry, itis also obvious that some sectors have embraceddata more rapidly than others. The most high-profile are Silicon Valley’s high-tech companies.But they are not alone. As this survey highlights,many companies within financial services andprofessional services are highly proficient inmaking use of data. Overall, these three sectorsare the most likely to have created a well-defineddata management strategy, or are marshallingresources toward this (see Figure 8).At Aon, for example, data continues to reshapehow its products and services are conceived anddeveloped. Whether proxy data on housing startsfeeding into construction insurance, or moregranular life insurance models based on a betterHigh-tech, financial services and professional services companies are the most advancedin using data and hence are getting more out of it, while some sectors such as retail areconstrained by poor industry conditions.Data-driven industries(% respondents)Figure 8Manufacturing Financial services Professional services Retail and consumer goods Technology, media and telecomsSource: Economist Intelligence Unit survey010203040506015.84013.321.930.436.856.33045.735.112.5206.76.78.86.537.815.26.33.53.13.32.22.240We have a well-defineddata managementstrategy that focusesresources on collectingand analysing the mostvaluable dataWe understand the valueof our data and aremarshalling resourcesto take better advantageof themWe collect a large amountof data but do not consistentlymaximise their valueWe collect data but theyare severelyunderutilisedWe do not prioritisedata collection
  19. 19. 18 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadgrasp of life expectancy, its products are builton the back of data. “Ten years ago we alreadyhad an unbelievable ability to deal with data,but our business decision making and acumenhadn’t caught up with it,” says Mr Clement. “It ischanging our business model and the fact is thatdata and the analytics on that data are becomingof equal value to the work we have traditionallydone. This is a fundamental change for a companylike ours.”This in turn is reflected in Aon’s workforce.In contrast to a decade ago, statisticians,actuaries, meteorologists, and other dataspecialists make up a far higher proportion ofits staff. At a macro level, demand for data skillsis currently concentrated in a few industries,such as finance or biotech (with consequentshortfalls in such talent widely forecast).3The pharmaceutical company AstraZeneca, forexample, is now reshaping both its process fordiscovering and developing new drugs, as wellas the way it commercialises these, around data.This is drawing on wide-ranging and complexinformation, from individuals’ genetic data atone extreme, through to industry insights aboutprescriptions and clinical efficacy, explainsIrvin Newbitt, the company’s vice-president forenterprise IT.Still getting startedBy contrast, other sectors are not yet consistentlyprioritising data-led initiatives or skills. Forexample, our survey shows that while boththe manufacturing sector and the retail andconsumer goods sector collect large volumes ofdata, they more often admit to not consistentlymaximising use of this resource than their peersin finance or high-tech.Across a range of data types, barring someexceptions, these sectors less often routinelycollect information; and when they do, they lessfrequently analyse it for insight. For example,The collectorsTypes of data collected and analysed, by industry(% respondents)Figure 9Manufacturing Financial services Professional services Retail and consumer goods Technology, media and telecomsSource: Economist Intelligence Unit survey010203040506070803.523.311.415.637.523.32531.910.5149.76.715.912.840.435.536.734.155.310.52513.320.919.117.515.6301442.617.515.62011.631.929.846.936.748.848.926.318.83032.640.438.646.936.720.936.222.89.413.813.327.749.171.962.144.448.916.19.417.217.821.355.465.658.66055.344.7Collects Collectsand analysesSocial media (eg,Facebook, Twitter,YouTube, blogs etc)Machine generateddata (eg, sensors,smart grid, RFID,network logs,telematics, etc)Location-basedinformation (eg,GPS, mobilelogins, etc)Contact centre data(eg, audioconversation, textchats, customeremails, etc)Staff data (eg,Emails, calendars,instant messaging,etc)Open data (eg,data released bygovernments)Syndicated datafrom third-partydata providers (eg,market dataweather, etc)Collects Collectsand analysesCollects Collectsand analysesCollects Collectsand analysesCollects Collectsand analysesCollects Collectsand analysesCollects Collectsand analyses3For more on this, see “Bigdata: The next frontier forinnovation, competitionand productivity”, McKinseyGlobal Institute, May 2011
  20. 20. 19© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadnearly four in ten retailers have no plans tocollect social media data, while a further 23% arestill putting collection plans in place. While one-quarter do collect and analyse such information,this is still well below the rate that both financialservices firms and technology companies do(Figure 9).Not all of this is through a lack of desire, butit also reflects the fact that creating a leadingdata competency requires investment in bothtechnology and skills, which lower-margin sectorswill find more challenging. “We see the need tomove into the 21st century and a much moreadvanced IT setup, which we know holds hugepossibilities,” explains the CFO of a major Spanishretailer, who asked not to be named, “but the factis that these are not the best times, which makesthe investment into the technology, and thetalent needed to exploit that, difficult to justify.”At an aggregate level, executives from a widerange of sectors see scope to bolster theircompany’s strategy on the back of a greaterreliance on data. Financial and professionalservices firms are typically ahead on this and thushave a far higher proportion of executives whoadmit to seeing the benefits. Others, though, dohold greater hope for the future as they get togrips with the issue (Figure 10).Even the leaders have a lot of headway still tomake, reminds RBS’s Mr Nelissen. “There’s a hugeswathe of companies who would like to do thisbetter and are not quite sure what to do next,but recognise they need to,” he says. “On a twoby two grid, where one axis is the amount of dataand other is the use of data, companies like eBayand Amazon are industry leaders on using data,but they only have a very partial set of data aboutcustomers. We’re at the other end, we have a hugeamount of data on customers, but are still movingtowards using it more.”Often, this requires the company to gain aninternal recognition of the value of data. “Thefact is we have all the data, but we didn’t put anyvalue on that data,” says Mr Nelissen. “That’scrazy, because one of the most valuable assetsyou have is knowing your customer. But that’sStrategic benefitsRespondents seeing/expecting significant improvement in strategy as a result of having more data(% respondents)Figure 10ManufacturingProfessional servicesFinancial services10.52027.626.719.143.511.122.72519.4Source: Economist Intelligence Unit surveyRetail and consumer goodsTechnology, media and telecomsPrior 1-2 years Next 1-2 years
  21. 21. 20 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadXerox offers a compelling example of howdata can shift from being an optimisationtool to something that can unlock whollynew offerings. It increasingly draws ondata to bolster how it sells its printers andbusiness services—helping decide the mix ofsales people in a given area, for example, orthe number of channel partners needed tomaximise marketing in a region. “These areimportant sales strategies that we’re now ableto really fine-tune because we have access tomore insightful data,” explains Christa Carone,the company’s chief marketing officer.But as the world becomes more digital, datais also helping refine the company’s pitch.For example, its managed services divisionconducts analytics on its customers’ usagepatterns, from types and volumes of printingneeded, through to what features are indemand across varying departments. This inturn has reshaped the firm’s value propositionin its printer business and how it handlescorporate proposals, by helping highlightwastage and cost saving opportunities.So far, so tactical. But as data becomes part ofthe lifeblood of the company, it is also openingthe door to new kinds of offerings. For example,Xerox already handles various city services,such as processing speeding tickets. This has inturn led to a project with the city of Los Angelesto conduct analysis of how to optimise the timethat people take to find a parking spot. “We’restudying traffic and parking patterns and usingthat to create a more dynamic pricing systemfor parking, based on supply and demand,”says Ms Carone. This is now just one of a rangeof service offerings being rolled out to othercities, as part of the company’s wider transitioninto a services business. Today, more than halfof Xerox’s revenue comes from services, andthe company has set a goal of getting 75% of itsrevenue from such services by 2017.Case study: Transitioning from physical productsto data services at Xeroxabsolutely changed, because everyone gets itnow, they understand the value,” he says.Indeed, Rudy Puryear, global head of the ITpractice at Bain Company, a consulting firm,argues that while data doesn’t appear much onthe balance sheet of any company, CEOs oughtto be considering it in that way. “They haveto think about the data, and the health andaccessibility of the data, as either an asset thatis deteriorating or increasing in value as you addmore to it,” he says.
  22. 22. 21© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadAs many experts would insist, building a data-centric business is hardly a new phenomenon.The poster company of the data era, Google,will celebrate its 15th birthday this year. Evenso, those companies that have used data tostrategically transform their businesses remain arelative minority today. But as investment growsinto the realm of data, it is inevitable that variouscompanies have moved further, and faster, toturn data into a genuine competitive advantage.To try to unpick this, we have looked fordistinctions between those companies that haveoutperformed the market over the past—whereaverage EBITDA growth, over the past threefinancial years, has exceeded 10% (high-growthfirms)—against those who’ve experienced zeroEBITDA growth, or have declined (no-growthfirms). Of course, such correlations cannotsuggest causality, but it is nonetheless instructiveto compare how high-performing firms differ.From this analysis, five key points emerge:1. High-growth firms make better use of theirdata. All firms collect data, but high-growthfirms are far more successful at turning thisinformation into something useful to drivenew strategies, or changes in strategy. In fact,across several areas of data, such as machine-generated data or location-based information,no-growth firms collect easily as much dataas high-growth firms do. But the latter are farmore likely to actually analyse the data beingcollected. For example, while 55% of no-growthfirms collect their contact centre data and 66%of high-growth firms do the same, only abouthalf of the former that collect data actuallyanalyse it, versus three-quarters of the latter.Nearly twice as many no-growth firms admitto collecting lots of data but not consistentlymaximising it (38% versus 20%). Furthermore,among high-growth firms, 15% considerthemselves highly effective at extracting usefulinsights from this analysis, about twice the rateof their no-growth rivals (7%). And while 17% ofno-growth firms rate themselves as ineffective atthis, just 4% of high-growth firms say the same(Figure 12).2. No-growth firms are more likely to run intodata paralysis. While executives at both sets ofcompanies consider their decision-making tobe based on data, rather than purely instinct,high-growth firms are far more likely to believethat key characteristics of their strategic changeinitiatives have improved as a result of data.Twice as many (62% versus 31%) believe thespeed of change has improved, while many morealso think the quality or effectiveness of changeis higher (about 58% versus 38%; Figure 13).Crucially, while many more high-growth firms seeimproved decision-making on the back of beingmore data-driven (60% versus 38%), no-growthcompanies are far more likely to be worriedThe outliers: Who’s ahead on the datagame?3There is a clear correlation between high-growth companies and use of data. Undoubtedlykey to their success is the fact they have done more to reorganise their structures andleadership around data and to introduce data-management strategies.
  23. 23. 22 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadMaking better use of dataTypes of data collected and analysed, by firm performance(% respondents)Figure 11High-growth firms No-growth firmsSource: Economist Intelligence Unit survey0102030405060Collects Collectsand analysesSocial media (eg,Facebook, Twitter,YouTube, blogs etc)Machine generateddata (eg, sensors,smart grid, RFID,network logs,telematics, etc)Location-basedinformation (eg,GPS, mobilelogins, etc)Contact centre data(eg, audioconversation, textchats, customeremails, etc)Staff data (eg,Emails, calendars,instant messaging,etc)Open data (eg,data released bygovernments)Syndicated datafrom third-partydata providers (eg,market dataweather, etc)Collects Collectsand analysesCollects Collectsand analysesCollects Collectsand analysesCollects Collectsand analysesCollects Collectsand analysesCollects Collectsand analyses16.514.333.811.910.714.346.633.31611.92616.716.726.249.228.625.828.645.523.823.521.453.835.718.221.458.342.9More and more effectiveOrganisational effectiveness at translating new data sources/types of data into insightful informationto drive strategic change(% respondents)Figure 12No-growth firmsHigh-growth firms507.1 26.2 9.5 7.115 66.2 15 30.8High effective Somewhat effective Neither effective nor ineffectiveSomewhat ineffective Highly ineffectiveSource: Economist Intelligence Unit surveyabout the quality of decisions being impaired byinformation overload (45% versus 31%).3. While no-growth firms worry about theunknown, high-growth firms worry about howto resource their data plans. When consideringthe barriers ahead on data issues, there aremany commonalities between weaker andstronger firms. Both worry about the challengeof assessing which data are truly useful, dataquality issues, and the related technologyproblems. But while high-growth firms are farmore likely to raise concerns about a lack ofnecessary skills and expertise, no-growth firmsare in turn far more likely to express a concernabout a fear of the unknown (Figure 14).
  24. 24. 23© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadChange for the betterRespondents citing improvements in aspects of strategic change as a result of having more data(% respondents)Figure 13No-growth firmsHigh-growth firms38.138.157.961.93155.7Source: Economist Intelligence Unit surveyQuality of changes made Effectiveness of change Speed of change4. High-growth firms have done more toreform their structure and leadership arounddata. High-growth firms are more likely tohave changed the way they handle strategicdecisions, as a result of data. For example,twice as many (46% versus 23%) no-growthfirms say they’ve not changed, and don’t evenplan to change in the coming year or two, theway they tackle such decisions. Meanwhile,far more executives at high-growth firms see aneed to radically transform their managementtechniques to keep pace with what technologyis making possible (62% versus 33%). And whilehalf of high-growth firms are rethinking theirapproaches to strategy and decision-making tomake it more data driven, just 36% of no-growthfirms are doing the same.5. High-growth firms more often have asolid data management strategy in place. Arobust data platform often appears to be thefoundation upon which more strategic use ofdata is made. As such, high-growth firms are 2.5times more likely to have a well-defined data-management strategy that focuses on collectingand analysing the most useful data. Lookingspecifically at the sample of executives whosay their firm has a strong data strategy, thesecompanies are typically at least twice as likely tobe more data-driven in their decision-making,and are about three times as likely to thinktheir strategy has improved as a result of data.And they are about four times as likely to haveconverted information into insights (Figure 16).This correlation is observed elsewhere, includingwithin research conducted by Bain Company.4“We’ve seen a strong correlation betweenBarriers to using data in strategyTop three barriers to effective use of larger data volumes in strategicplanning or decision making(% respondents selecting in top three choices)Figure 14Source: Economist Intelligence Unit survey01020304050Data qualityissuesDifficulties inassessing whichdata is truly useful(data overload)Lack ofnecessaryskills/expertiseDifficulties inassessing whichdata is truly useful(data overload)Data qualityissuesHigh-growth firms No-growth firmsFear of theunknow amongkey managers4137.335.140.538.123.84For more, see: “Decisioninsights: Measuringdecision effectiveness”,Bain Company, 2012
  25. 25. 24 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheaddecision-making effectiveness and financialresults,” explains Mr Puryear. “Making decisionsrequires insights you can count on, so there’sa strong correlation between really beingable to leverage the data assets and ultimateperformance from that.”Characteristics of the data insightmastersA further set of comparative findings shows evenmore striking insights. In many conversationswith C-suite executives, a central issue was howto use data to find the proverbial needles in thehaystack—uncovering the valuable insights thatno one else had spotted.To this end, this research cross-analysed theresults of the small cluster of executives whoprofessed to have been highly effective atgenerating insight from data and compared itwith a far larger grouping that admitted to beingweakest at this. Again, while such correlationcannot claim causality, the contrasts betweenthese groupings are stark.Overall, those that are highly effective atgarnering insights are:l Nearly eight times as likely to have a well-defined data management strategy in place.l More than four times as likely to have changedthe way they tackle strategic decisions, as aData-driven management changeRespondents agreeing with the statement(% respondents)Figure 1521st-century management techniques must beradically transformed to keep pace with whattechnology is making possibleWe are rethinking our approaches to strategyand decision-making processes, to make itmore data-driven61.933.350.435.7Source: Economist Intelligence Unit surveyHigh-growth firms No-growth firmsThe importance of a good data platformOrganisational effectiveness at translating new data sources/types of data into insightful informationto drive strategic change(% respondents)Figure 16The restGood data strategy7.2 59.8 23.9 830.2 60.3 6.31.23.2High effective Somewhat effective Neither effective nor ineffectiveSomewhat ineffective Highly ineffectiveSource: Economist Intelligence Unit surveyNB: “Good data strategy” cohort is firms agreeing with the statement: “We have a well-defined data management strategy that focuses resources oncollecting and analysing the most valuable data.”
  26. 26. 25© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadresult of the data they have, despite most otherattributes of their strategic decision-makingprocess being the same.l Almost universally providing their seniorexecutives with new data and information tosupport their roles and decisions (92% are,versus just 35% of ineffective firms).l Twelve times more likely to consider theirstrategic planning and decision-making to bedata-driven.l Unique among all clusters of respondentsin having most often put their CEO in chargeon data-related initiatives within the business,ahead of the CIO, which is the stock answer fornearly all other sets of respondents, includingthe high-growth companies outlined above.
  27. 27. 26 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadThe shift to a data-centric world is opening upnew opportunities all the time. But this doesnot mean it is an easy task for companies to takeadvantage of them. Uncertainty over the futureand difficulty in filtering the signal from thenoise; immature tools; limited skills and expertisein this domain; the challenges of dealing withIT—all such concerns come into play, just as theydid at the dawn of the internet era.Across all functions and industries, a fairlyconsistent set of barriers emerged. The mostpressing worry related to the difficulty inassessing which data are truly useful, selectedby four in ten respondents (see Figure 17). “Theability to separate noise from the importantthings is a challenge, you don’t learn itovernight,” says a Fortune 100 chemical companyCFO. “The access to quality data becomes moreand more important with each passing year. Andit also creates a thirst for more data, as you beginto understand what can be done with it.”Concerns over data quality followed closelybehind, along with a related worry about dataoverload. About one-third (34%) of respondentsagree that they are increasingly worried aboutthe quality of strategic decisions being impairedby information overload. In part, as BP’s Mr Grayargues, this can be a function of maturity withinthe business—and a willingness for leaders topush back on reporting purely for reporting’ssake.“We went through this process a few years back,and ran into a break point when an executivequestioned one day who was actually readingyet another thick report on some issue,” he says.“It was a watershed moment, as other leadersstarting asking the same question, so a lot of thisgot cut back very quickly. We’ve been throughthat, but it is absolutely a risk for people to beaware of.”Beyond these data-specific concerns, a lack ofskills (35%), issues relating to organisationalsilos (25%), disconnects between IT and therest of the business (16%), and a fear of theunknown among the management team (15%)round out the key barriers. Each of these canbe major issues in their own right. For example,Mr Puryear notes that many companies aregrappling with the accumulation of 20 years oflegacy systems and applications. “This notion ofunnecessary complexity in the IT environment issomething that crops up a lot, and the reality isthat so much of the data that companies need arelocked up within these systems,” he says.The fine line on trustElsewhere, other concerns come into play foreither specific industries or countries andregions, from worries over tightening privacyregulations that are restricting the accessor availability of consumer data, through toconsiderations of trust. Coutts provides a usefulillustration. As Mr Brannan explains it, while anNoise, overload and trust: The datachallenges4The list of challenges to companies seeking to become more data-centric is long, butleading it is the ability to determine which data are truly useful.
  28. 28. 27© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadBarriers to progressBarriers to effective use of larger data volumes in strategic planning or decision making(selected responses)(% respondents selecting in top three choices)Figure 17Fear of the unknown among key managersLack of necessary skills/expertiseTechnology/systems issuesData quality issuesDisconnects between the IT function and therest of the businessLack of leadership from the topDifficulties in assessing which data is trulyuseful (data overload)15.89.413.315.66.445.640.84037.838.322.812.51013.312.817.56.36.711.16.428.146.943.326.746.819.312.523.324.431.928.137.54053.323.4Manufacturing Financial services Professional servicesRetail and consumer goods TMTSource: Economist Intelligence Unit surveyonline retailer like Amazon might reasonably beexpected to track a customers’ purchases andinsights in order to sell them more, a privatebank has to tread far more carefully. “Ourrelationships are based on discretion and trust.If we sit there and talk about the fact that weknow a lot about you, we can easily step over thatvery fine line,” says Mr Brannan. “So there’s aquestion of how we present our insights back toclients and whether that’s acceptable to them.Anything that erodes trust is a huge risk to us.”Professor Neely argues that reputational risk is asignificant issue for firms. “As you pull differentsources of data together, you get to know moreabout people, whether customers or employees,and you have to be very careful about what youwant to do with some of that information,” hesays. At Aimia, Mr Johnston explains that suchconcerns are paramount within the business,which has in turn led it to develop a core setof values relating to data, dubbed TACT (forTransparency, Added value, Control, and Trust).
  29. 29. 28 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadNew needs, new skillsThese challenges apply just as much to usingdata for optimisation purposes as they do formore strategic ones. But as leaders seek to makethe evolution from one to the other, severalissues become more pressing. One that cropsup repeatedly is the move beyond the skills ofthe traditional business analyst role, to bringin an advanced new skillset, matched with deepindustry expertise.At the core of many challenges, argues Mike Balay,vice-president for strategy at Cargill, the globalfood manufacturer, is the need to better align themanagement team’s assumptions about the worldwith reality. This gets to the core of managementtheorist Peter Drucker’s “Theory of the business”,which argues that when these assumptionsare true, whether about customer needs ororganisational strengths, it is far easier for thebusiness to be successful.5 “What’s brilliant aboutDrucker’s theory is that when these assumptionsare in alignment, your business successes willseem effortless,” says Mr Balay. “The companiesthat don’t do well are those that don’t share thesame assumptions internally or don’t sync themup to the world outside.”What’s important here is that data essentiallysupercharges this theory, by providing farmore information and options, such as thepossibility to segment customers in multiplenew dimensions. But this comes with tough newchallenges: “How is your organisation going toprocess the insight? How are you going to getconnect insight to an actionable set of strategicchoices? And how are you going to get theorganisation aligned behind you?” says Mr Balay,who makes a strong case for the need to invest inadvanced skillsets to support this (see the casestudy below for more).This is crucial. As Aon’s Mr Clement advises,one of the challenges is that data capture theworld as it exists today, not what might bepossible. “The biggest opportunities come fromfundamental change. If you take the old horseand buggy example, the data would have pointedyou to adding more horses, not to inventing theautomobile,” he says. To help Aon improve onthat front, the company has been continuouslyinvesting in its skills and ability to interpretdata. “Ten years ago we had a lot of analyticalcapability, but the organisation just wasn’t readyto take advantage of it,” says Mr Clement. “Youneed the talent and we are catching up on that.”All this points to a marketplace in transition.As highlighted earlier, only a small minority(12%) of executives think their organisation hasbeen “highly effective” at translating data intouseful and insightful information so far. “Accessto data is no longer a challenge these days. Wehave a tremendous amount of access and we canmeasure just about anything,” says Xerox’s MsCarone. “To me, where we continue to have somechallenges is how to translate this data into real,actionable results for the company,” she says.5“Theory of the business”,Harvard Business Review,Peter F. Drucker, September-October 1994
  30. 30. 29© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadOver the past few years, Samsung has risento become one of the biggest consumerelectronic brands in business. In 2012, itspopular smartphones accounted for the highestproportion of global sales. That success has comeon the back of its innovation, design and otherfactors. But behind the scenes, the company’sachievements have also been driven by its effortsto become a far more data-centric business.Asim Warsi, vice-president for mobiles atSamsung India, explains that the companynow tracks the sale of every single one of thetens of thousands of handsets it sells on a dailybasis, which in turn powers the rest of thebusiness. “This data is the basis on which ourdemand planning is done, which is the basisfor production planning, and in turn the basisfor raw material sourcing, so it’s really thelifeblood of the organisation,” he says.From a sales perspective, the company knowsevery sale that happens, and where and whenit took place, which helps supply the analyticsthat determine which sales channels andmarkets are performing, how much stock tohold, where credit could be considered, andmore. “If there is a particular item not selling,or slowing down, we immediately know of it andcan take proactive action,” says Mr Warsi. “Bybeing able to track our business down to thelowest metric and building our analytics backfrom that, it gives us an enormous visibility onour markets, channels, supply chain, customerbehaviours and more. If this is not powerful,then I don’t know what would be,” he says.At the same time, the company is strict aboutcutting away the superfluous data that mightobscure this picture. This is just as important inrunning a data-centric business. “We purge alldata that is non-decisionable, so we only reallytake the data that matter,” says Mr Warsi. Thisis a challenge that many other firms are stillgrappling with.Case study: Building a data-centric business atSamsung
  31. 31. 30 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadAll companies thrive on insights at some level.But as the world becomes more data-centric,these insights become increasingly difficult forcompanies to find. Mike Balay, vice-presidentfor strategy at Cargill, gives a simple businessscenario that his strategy team might grapplewith: resetting pricing strategies for a particularproduct line. As this division gets more data,it can start to do more complex modelling ofits customer segments. “You suddenly find outthat it’s not just a customer, but it’s a customerin a particular place, with a certain productmix, a specific history with us, and a particularrisk management strategy, all of which raisesincredible complexities,” says Mr Balay.By overlaying this against price strategiesand asset utilisation, the strategy team mightuncover that the unit is actually throwing away30% of its profitability with the last 10% ofsales it is doing, as one example. Such insightscan transform the fortunes of a division, butthe volume and complexity of the data makesuch findings harder to uncover than theywere historically. How to solve this? The simpleanswer: hire the smartest possible people.“The stars of the future are the people able towork with these large data sets and turn theminto something actionable,” he argues. Thisnew breed of “super quants”, or what Mr Balaydubs “elite symbolic analysts”, are what will beneeded to successfully grapple with the firm’scomplex network optimisation challenges.But getting such rare skills requires a majorcorporate commitment. “Are you willing tohire and pay those people? Give them freedomand recognition? Make them partners in yourbusiness?” asks Mr Balay. None of this is easy,not least as this talent is rare, expensive andoften unconventional. “But the conventionalwisdom is not interesting. It is the weirdoes whoare interesting,” he notes.Case study: Cargill, strategy and the rise of theso-called super quants
  32. 32. 31© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadThe leadership considerations aheadThis report has made the case that mostcompanies are now realising that the era of datacould prove just as significant as the shift tointernet-enabled business. A growing proportionrecognises the transformational power of data fortheir business, although this group also admits tobeing humble about the learning curve ahead.This is right: relatively few have fully grasped thepower of data and how to truly take advantage ofit. Many of the high-profile examples of data useso far have largely focused on optimising existingprocesses, and are yet to use data for strategictransformations. But as the latter starts to comeinto the frame, it will by definition be harder toget right. In turn, it is becoming clear that thereare several distinct organisational and leadershipissues for CEOs and their C-suite peers to consider.First, as with any strategic initiative, making themost use of data requires leadership from the top.This involves not only a commitment to investin the necessary systems and skills, but also todemonstrate that these are being taken seriouslyat an executive level. “We’ve got to go back tofirst principles of making sure we’ve got absoluteclarity across the leadership team, as we buildthis out,” insists Coutts’ Ged Brannan. At onelevel, this brings a need to consider how best toovercome organisational silos and departmentalfiefdoms that often jam up the flow of data withina business.Second, as data initiatives do start to becomemore powerful, there will likely need to bean evolution in how senior decision-makingis handled. Whether this involves a shift tomore collaborative and multi-functional teamsconsidering decisions, or other shifts, it is clearthat work remains to be done to adapt 20th-century management techniques to the data-era.In particular, organisations will need to find moreeffective means of making strategic decisions,with new tools to aggregate the information theyhave to hand. “There will be some fundamentalchanges,” says Mr Brannan. “Our executivecommittee will have richer data available to themand they will, therefore, be able to make moreinformed decisions.”Third, businesses should be aware that there aremajor questions yet to be fully resolved abouthow data initiatives are structured and managedinternally. While in many instances, it is the CIOConclusion
  33. 33. 32 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadwho instinctively will be given the lead on this,this research has highlighted that those firmsthat do best on extracting insights have oftenlooked to their CEO, or other leaders with cloutinternally, to take the lead. “This tends to bestructured differently, and it should be. You needsomeone who has oversight responsibility at thatvery high level to shepherd it through and act onit and care about it,” argues The Economist’s MrCukier. Professor Neely agrees: “The technologicalinfrastructure is there, but the organisationalinfrastructure is often not.”Fourth, for those companies making the shiftfrom the tactical to the strategic use of data,there will be a need for management flexibilityand open-mindedness as to the new possibilitiesemerging. The shift also requires CEOs to have thecourage to take the leap towards the unexplored.“It’s very difficult for boards to want to considerfundamentally changing the business model,”says Aimia’s Mr Johnston. “So much managementtime is dedicated to short-term performancetargets and cash management and so on, thatit’s difficult to make a leap like this,” he says.But as the value of data becomes more apparent,the need for this shift will become even moreapparent. As one executive interviewed for thisreport has argued, some companies should evenseek to explicitly value their data in order to moreclearly represent it as the asset it is.Indeed, as Jason Trost, the CEO of Smarkets, anonline betting platform, argues: “For companiesto stay competitive, they need to rearrange theirstructures so that they can pivot their businessmodel, pivot their brand, pivot their products.That’s the crucial thing business leaders shouldbe looking at.”
  34. 34. 33© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies aheadNote: Percentages may not total 100 due to rounding or the ability of respondents to choose multipleresponses1. Which of the following best describes your job title?(% respondents)Chief executive officer, or equivalentChief financial officer, or equivalentChief operating officer, or equivalentChief marketing officer, or equivalentChief strategy officer, or equivalentChief risk officer, or equivalentChief information officer, or equivalentChief technology officer, or equivalentOther C-suite role, please specify13191397412716Appendix:Survey results
  35. 35. 34 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead2. In which region are you personally located?(% respondents)North AmericaWestern EuropeAsia-PacificEastern Europe47272423. In which country is your company headquartered?(% respondents)United States of AmericaUnited KingdomCanadaGermanyIndiaFrance4595443Italy3SwitzerlandChinaHong Kong32220Other
  36. 36. 35© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead4. What is your primary industry?(% respondents)ManufacturingFinancial servicesProfessional servicesHealthcare, pharmaceuticals and biotechnologyIT and technologyConsumer goodsEnergy and natural resourcesConstruction and real estateAutomotive12109997654Retailing4Transportation, travel and tourism3Chemicals3Telecommunications3Aerospace/defence3Entertainment, media and publishing3Logistics and distribution3Agriculture and agribusiness2Government/public sector2Education25. What are your organisation’s global annual revenues in US dollars?(% respondents)$500m to $1bn$1bn to $5bn$5bn to $10bn$10bn or more23341429
  37. 37. 36 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead6. How has your company performed, in terms of average EBITDA, over the past three financial years?(% respondents)Exceptional growth: 25% or higherStrong growth: 10-25%Some growth: up to 10%No growth537457Decline67. Which of the following statements best describes your organisation’s approach to data management?(% respondents)We have a well-defined data management strategy that focuses resources on collecting and analysing the most valuable dataWe understand the value of our data and are marshalling resources to take better advantage of themWe collect a large amount of data but do not consistently maximise their valueWe collect data but they are severely underutilised2044276We do not prioritise data collection38. Which of the following non-traditional sources of data does your organisation collect, or plan to collect? Select all that apply.(% respondents)Social media (eg, Facebook, Twitter, YouTube, blogs, etc)Machine generated data (eg, sensors, smart grid, RFID, network logs, telematics, etc)Location-based information (eg, GPS, mobile logins, etc)Contact centre data (eg, audio conversations, text chats, customer emails, etc)1513401123241711422027 18 36 429 731 523 3Staff data (eg, Emails, calendars, instant messaging, etc)113728 618Open data (eg, data released by governments)95020 16 5Syndicated data from third-party data providers (eg, market data, weather, etc)125616 12 4Other, please specify8123 22 563Collects Collects and analyses Plans to collect Does not collect Don’t know
  38. 38. 37© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead9a. Which of the following types of strategic actions has your company undertaken in the past 1-2 years? Select all that apply.(% respondents)Entered a new geographic market(s)Developed and/or launched a new product(s)/service(s) in your core sectorUndertaken a sales strategy transformationUndertaken a merger or acquisitionUndertaken a back-office transformationUndertaken a corporate restructuring (eg closing an unprofitable division)Undertaken a marketing strategy transformationExecuted a change in core business modelUndertaken supply chain transformationEntered a new line of business separate from your core sectorStarted a new collaborative ventureOther, please specifyNone6767464444424036353528339b. Which of the following types of strategic actions does your company plan to undertake in the next 1-2 years?Select all that apply.(% respondents)Develop and/or launch a new product(s)/service(s) in your core sectorEnter a new geographic market(s)Undertake a merger or acquisitionStart a new collaborative ventureUndertake a corporate restructuring (eg closing an unprofitable division)Undertake a marketing strategy transformationUndertake a sales strategy transformationEnter a new line of business separate from your core sectorUndertake supply chain transformationExecute a change in core business modelUndertake a back-office transformationOther, please specifyNone423935323131302525242336
  39. 39. 38 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead10a. Which of the following statements best characterises the typical frequency of your organisation’s major strategicmanagement changes in the past 1-2 years?(% respondents)Strategic changes are usually made on an annual basisStrategic changes are usually made every six monthsStrategic changes are usually made quarterlyStrategic changes are usually made monthly43762Strategic changes are made regularly, as needed, rather than on any fixed schedule4110b. How do you expect the typical frequency of your organisation’s major strategic management changes to alter in the next1-2 years?(% respondents)Strategic changes will usually be made on an annual basisStrategic changes will usually be made every six monthsStrategic changes will usually be made quarterlyStrategic changes will usually be made monthly261585Strategic changes will be made regularly, as needed, rather than on any fixed schedule4611a. In your view, to what extent would you consider your company’s strategic planning to be data-driven?(% respondents)Highly data-drivenSomewhat data-drivenOccasionally or partly data-drivenRarely data-driven324221511b. In your view, to what extent would you consider your company’s strategic decision-making to be data-driven?(% respondents)Highly data-drivenSomewhat data-drivenOccasionally or partly data-drivenRarely data-driven2545255
  40. 40. 39© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead12a. How important would you say increased data volume has become to your company’s strategic planning?(% respondents)Highly importantSomewhat importantOf limited/occasional importanceNot important394610412b. How important would you say increased data volume has become to your company’s strategic decision-making?(% respondents)Highly importantSomewhat importantOf limited/occasional importanceNot important404313513a. To what extent would you say your company’s strategy has improved, or worsened, over the past 1-2 years, as a result ofhaving more data?(% respondents)Improved significantlyImproved moderatelyNo changeWorsened moderatelyWorsened significantlyDon’t know18512243313b. How do you expect your company’s strategy to change, in the next 1-2 years, as a result of having more data?(% respondents)Improve significantlyImprove moderatelyNo changeWorsen moderatelyWorsen significantlyDon’t know264618344
  41. 41. 40 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead14. Has your company changed the way it tackles strategic business decisions as a result of data?(% respondents)YesNo, but we will do so within the next 1-2 yearsNoDon’t know352433715. To what extent would you say that your organisation has been effective at translating any new data sources, or types ofdata, into useful information to drive changes of strategy?(% respondents)Highly effectiveSomewhat effectiveNeither effective nor ineffectiveSomewhat ineffectiveHighly ineffective1260206216a. To what extent has the range and types of data you’re relying on for your changes of strategy or new strategies eitherexpanded or contracted over the past 1-2 years?(% respondents)Major expansionModerate expansionNeither increased nor contractedModerate contractionMajor contraction1452284216b. How do you expect the range and types of data you’re relying on for your changes of strategy or new strategies to changein the next 1-2 years?(% respondents)Major expansionModerate expansionNeither increase nor contractModerate contractionMajor contraction22522032
  42. 42. 41© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead17. Which of the following types of data would your company benefit from the most in deciding on changes of strategy ordeveloping new strategies? Select all that apply.(% respondents)Syndicated data from third-party data providers (eg, market data, weather, etc)Open data (eg, data released by governments)Machine generated data (eg, sensors, smart grid, RFID, network logs, telematics, etc)Contact centre data (eg, audio conversations, text chats, customer emails, etc)Social media (eg, Facebook, Twitter, YouTube, blogs, etc)Staff data (eg, Emails, calendars, instant messaging, etc)Location-based information (eg, GPS, mobile logins, etc)Other, please specifyNone of the above524840363533283418. Do you agree or disagree with the following statements?(% respondents)Our business has consistently sought to provide our senior executives with new data and information to support their roles and decisionsWe have been able to create useful new management metrics to track performance, on the back of new data inputsImprovements in how we interpret our data, such as visualisations, would enable us to capitalise on potential opportunities fasterOur strategic decision-making has improved on the back of being more data-driven62124442832579395028 9 1233We are increasingly worried about the quality of strategic decisions being impaired by information overload234134 3The merits of “big data” for strategic planning and decision-making are substantially overhyped224329 5Data is shared effectively between different functional groups within the organisation303631 3Greater use of data is more pertinent for our operational choices and actions, rather than our strategic ones224135 33Agree Neutral Disagree Don’t know
  43. 43. 42 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead20. Who takes the primary lead on data-related initiatives within your business?(% respondents)Chief information officerChief operating officerChief financial officerChief executive officerChief marketing officerChief strategy officerOther C-suite role, please specifyLine of business headsDedicated role (eg, chief data officer)Other, please specifyNot applicable, we don’t have a dedicated role taking the lead on this2891513981611919. What do you see as the biggest barriers to making effective use of larger volumes of data within your strategy planning orstrategic decision-making? Select up to three.(% respondents)Difficulties in assessing which data is truly useful (data overload)Data quality issuesLack of necessary skills/expertiseOrganisational silosTechnology/systems issuesDisconnects between the IT function and the rest of the businessLack of a sufficient data-led cultureFear of the unknown among key managersLack of leadership from the top403735252216151411Uncertainty about the return on investment11Uncertainty about the degree to which this would genuinely improve strategy or decisions10Insufficient resources/funding to prioritise such initiatives9Legal barriers to the sharing of data (data protection laws)8Other, please specify1Don’t know3
  44. 44. 43© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead21. Do you agree or disagree with the following statements?(% respondents)We have a very difficult time identifying which data are relevant for strategy and which to ignoreWe see a clear risk that data overload provides false comfort (ie, that issues are drowned out amid too many data points)21st century management techniques must be radically transformed to keep pace with what technology is making possibleWe are rethinking our approaches to strategy and decision-making processes, to make it more data-driven361739427325813384638 25 1233Big data has had more of an effect on our regular, tactical decision-making, as opposed to our strategic decisions164632 5Agree Neutral Disagree Don’t know22. How have the following attributes of strategic change projects/initiatives within your business developed as a result ofhaving more data?(% respondents)Speed of changeEffectiveness of changeQuality of changes made50742495425042 6 223Improved No change Worsened Don’t know23aa. In which of the following strategic aspects of your role do you believe that having more data has made the biggestpositive difference to the choices and actions you have made? Select up to three. - CEO(% respondents)Geographic expansionIdentifying new business modelsIdentifying new revenue streamsGaining better insights into the competitive landscapeImproving organisational productivityImproving strategic planningImproving risk managementIncreasing organisational transparencyEnsuring regulatory complianceImproving resource allocationOther, please specify403533333030252015150None of the above0
  45. 45. 44 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead23ab. Which of the following strategic aspects of your role have you not yet tried, but believe would hold significant potentialwith more data? Select up to three.- CEO(% respondents)Improving risk managementImproving organisational productivityIdentifying new revenue streamsGeographic expansionIdentifying new business modelsImproving resource allocationGaining better insights into the competitive landscapeIncreasing organisational transparencyEnsuring regulatory complianceImproving strategic planningOther, please specify333025252323201818103None of the above324a. How would you compare your own use of data as opposed to other CEOs in your industry?(% respondents)Significantly above averageSomewhat above averageAbout averageSomewhat below averageSignificantly below averageDon’t know1536361003
  46. 46. 45© The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead25a. What do you consider the key barriers or issues that prevent you from making greater use of data within your executivedecisions? Select all that apply. - CEO(% respondents)Lack of skills/insufficient expertiseThe underlying data is simply not good enoughThis is more useful for my immediate team, rather than myselfLimited direct benefit to my kind of roleOur organisational silosThe related systems are not sufficiently matureCEOs already deal with too much information; we need less, not moreRelated tools are too complicated/time-consumingDon’t believe big data is that useful for CEOs as yetI don’t yet sufficiently understand this conceptOther, please specify3533252323181513133323ba. In which of the following strategic aspects of your role do you believe that having more data has made the biggestpositive difference to the choices and actions you have made? Select up to three. - CMO(% respondents)Increasing customer understanding and segmentationIncreasing salesHelping assess potential demand for new products/servicesIncreasing cross-selling effortsImproving customer serviceImproving return on marketingImproving pricing optimisationGaining better grasp of competitive landscapeOptimising marketing mixImproving cross channel experienceOther, please specify5040372723171717137None of the above70
  47. 47. 46 © The Economist Intelligence Unit Limited 2013The data directive: How data is driving corporate strategy—and what still lies ahead23bb. Which of the following strategic aspects of your role have you not yet tried, but believe would hold significant potentialwith more data? Select up to three.- CMO(% respondents)Increasing cross-selling effortsImproving cross channel experienceOptimising marketing mixImproving pricing optimisationImproving return on marketingGaining better grasp of competitive landscapeIncreasing customer understanding and segmentationIncreasing salesHelping assess potential demand for new products/servicesImproving customer serviceOther, please specify33272727231713131313None of the above7024b. How would you compare your own use of data as opposed to other chief marketing officers in your industry?(% respondents)Significantly above averageSomewhat above averageAbout averageSomewhat below averageSignificantly below averageDon’t know750301003

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