- PwC’s report Big Decisions: Let the data do the talking examines how businesses can use data analytics to improve decision-making processes.
- While some Australian businesses are early data adopters, a majority are not using analytics to its full potential.
- Obstacles to full analytics adoption include budgetary constraints, a lack of leadership, and using data for retroactive analysis.
When Unilever bought Dollar Shave Club for a billion dollars in July, it wasn’t buying a razor blade manufacturer, it was buying a data analytics company.
Sourcing its razors from a Korean wholesaler and selling directly to three million subscribers, Dollar Shave Club wields data insights across almost every aspect of its e-commerce business. Whether optimising its marketing emails, or better targeting its free product samples to maximise return on investment, data plays an indispensable role.
A billion-dollar acquisition of a razor company that doesn’t actually make its own razors is just one of the new possibilities afforded by data analytics. Using analytics tools, razor-sharp (no pun intended) customer insights can be unlocked, future scenarios can be modelled and planned for, and decisions can be made to optimise every outcome.
But before becoming a data analytics company, you have to begin to think like a data analytics company. As PwC’s new report Big Decisions: Let the data do the talking finds, mindset and capability must exist in symbiosis to fully take advantage of this brave new data-focused world.
Big Decisions examines a landscape in which emerging technologies such as artificial intelligence, cloud infrastructure and machine learning are becoming increasingly accessible.
Drawing from survey data from Australia and overseas, the report explores the ways businesses are employing prescriptive and predictive data analytics to make more customer-centric decisions.
by the numbers
While the report found that a third of Australian businesses are embracing data – a finding that’s in keeping with the nation’s reputation for early adoption – a majority 61% said their process is only ‘somewhat’ guided by data.
This differs to international counterparts, nearly half of whom said their decision making is ‘highly data-driven’.
It seems that in Australia, where businesses frequently remain reliant on executive boards, a top-down approach to steering companies remains the norm. Data is seen as the poor cousin, with intuition and gut-feelings still reigning supreme.
Don’t look back
Another finding from the Big Decisions report was that 69% of Australian firms use data and analytics tools for retrospective analysis, preferring to use data to understand why a decision went wrong or why a business move failed.
Again, this contrasts to global organisations, which are more likely to deploy data-driven decision making to look to the future; addressing questions such as what scenarios might happen and what actions should be taken.
Australia could benefit from moving away from this diagnostic strategy and experimenting with a more proactive, forward-facing approach. Of course, it doesn’t help that many of the data analytics leaders aren’t home-grown. But this should be seen as a call to action – a chance to capitalise on intimate knowledge of the local market.
Mustering the will
The Australian data drought can be attributed, at least in part, to a lack of strong leadership. By forgoing even modest investments in data analytics capabilities, emerging opportunities are missed and a structure forms that limits future progress.
The Big Decisions report highlighted that 36% of Australian executives declared budgetary constraints as the biggest obstacle to moving into the data analytics space, while 26% admitted that there was a lack of leadership courage in the arena of data-driven decision making.
These opinions, while only expressed by a minority of the Australian respondents, showed budgetary and leadership challenges were more pronounced for the local business landscape compared to global counterparts. International organisations, conversely, ranked availability of resources, manpower and operational capacity as their chief impediments to unlocking data’s potential.
Greater than the sum
It’s worth noting that although many Australian businesses boast pockets of analytics capability, such as web traffic statistics, social media listening, or sales records from a loyalty program, a lack of consolidation between these data sets could mean bigger-picture insights are more difficult to achieve. This could result in decision-making based on incomplete data.
Part of the problem may stem from the observation that many Australian businesses remain unconvinced, compared to their international peers, that data and analytics will bolster shareholder value.
According to the report, expanding market share and spearheading cost-out initiatives (projects that have their costs and returns carefully pre-calculated) remain top priorities. Data analytics could be used as a key tool for both of these objectives. Returning to the Dollar Shave Club example, the five-year-old company had secured 15% of the American shaving cartridge market by 2015. Data analytics would have played a crucial role in capturing that market share.
towards big decisions
When it comes to beginning a data-driven decision-making journey, there’s no shortage of constructive next steps.
From appointing a chief digital officer or data scientist who can champion the power of analytics across the enterprise, to partnering with businesses that possess capabilities that can’t yet be brought in-house, a few small steps can yield big results.
It’s also important to continue leveraging any assets or data capabilities that a company might already have. From this foundation, experimenting with newer use-cases can get businesses well on the way to making data-driven decision making the norm and not the exception.