There isn’t a decision being made in business today that hasn’t been somewhat shaped by data.
The amount of information on hand in business is often overwhelming. As a result, there can be some scepticism as to the practical use of it to drive business.
Confronting this challenge is necessary for business to evolve – especially when it comes to using data for big decisions. According to PwC’s recent Global Analytics survey, nearly one in three executives say those “big decisions” are valued to at least $1 billion – they carry a significant amount of weight and influence.
To make the big decisions in a connected age requires a new type of decision-making ability – and plenty of businesses are already doing so.
But it requires an investment not just from individuals, but attention from the C-suite.
Our survey shows the C-suite is more likely than their non-C-suite colleagues to have previously discounted data analysis that they did not understand. Yet investment in executive training on interpreting data and data analysis techniques is not yet at the top of the corporate change agenda – even for companies that have changed big decision making to incorporate data and analysis.
Looking ahead, there is at least recognition that the skills required of management are changing: nearly three-quarters (72%) of the current C-suite believe that familiarity with data-driven decision making is a prerequisite for senior management. More investment in actually tracking accurate and relevant data is necessary.
Here are just some of the ways businesses are using analytics and data to improve their “big decisions” but take note – all of these examples includes a focus from the executive level. A better decision making process combines experience and evidence – which requires a commitment from the top-down.
Cloudera, a Californian enterprise software company, has recently completed a new financing round worth $US900 milliom with investments from businesses including Intel.
CEO Tom Reilly faced a significant decision – targeting a company for acquisition. Given this plan, he turned to customer data within his own company – the process revealed that security and privacy were the two standout concerns holding customers back from using more products.
Reilly took the information to the board, which influenced and narrowed their focus. Six weeks later, the business completed the acquisition of Gazzang, a data-security company. By focusing exactly on what consumers wanted through data, the business was able to deliver.
Bayer Rosmarin began to head up the Institutional Banking and Markets division at CBA in 2013 – with a focus on making sure the bank can offer corporate customers unique insights.
Rosmarin’s biggest challenge came in helping the leadership team “make a decision to decide”.
Once this was established, data gathering and analysis could begin, comparing global trends and other intelligence factors. But it was only then, after a distinct decision had been made to analyse the data, that work could begin.
Next came the “human element” of talking to major customers and canvassing the opinions of potential customers who had chosen a competitor. Finally, all of this information was synthesised until the leadership team had honed in on a few key decisions that needed to be made.
British telecommunications group EE was formed in 2010 as a joint venture between Orange of France and Deutsche Telekom of Germany. Richard Reeves, the director of corporate strategy, made a decision to focus the extension of its 4G network along key transport routes, aiming to enhance customer satisfaction by minimising dropped calls during rail and car trips.
One of the biggest benefits of big data, Reeves says, is being able to test new hypotheses extremely quickly.
“Some information and insights around analytics are available to a broad selection of the EE management team and it allows them to come up with their own hypothesis and potential challenges to the activity that is being undertaken.”
These examples come from PwC’s Global Data and Analytics Survey 2014: Big Decisions report. Download your copy of the Big Decisions report.