- A comparison of PwC’s 2014 and 2016 data analytics reports shows that gut and intuition still dominate decision-making processes.
- Australian businesses continue to struggle with data analytics timeliness.
- The past 24 months has seen data analytics priorities shift from customer-centricity to market share.
In the world of data driven decision-making, two years can feel like a lifetime. On the research and development side, artificial intelligence is poised to transform cancer diagnosis¹, wearables are assisting in workplace mental health, and machine learning is aiding the detection of fraud and cyber-criminals², among countless examples.
Looking beyond the pilot projects of these breakthrough data-wielding technologies, how are Australian companies embracing analytics and implementing them into their organisations?
PwC’s first Big Decisions report, 2014’s Gut and gigabytes, offered a picture of the still-nascent state of data-driven decision-making in the Asia Pacific region and how CEOs were approaching data opportunities for their businesses. Comparing these insights with this year’s report, Let the data do the talking, throws many of the pain points that continue to affect regional business leaders into sharp relief. Is their data analytics maturity evolving alongside technology, or are they stuck at the gate?
Businesses are still following
their instinct for important decisions
Decades of using instinct and industry knowledge to navigate the business landscape has seen leaders remain reluctant to use data to unlock value and drive growth. In the 2014 Big Decisions report, more than three quarters of respondents working in the Asia Pacific region’s energy, utilities and mining sector said intuition or experience (rather than data) was the primary driver for their last significant business decision.
Yet the same publication also found that Asia Pacific business leaders were unusually confident in their ability to understand data – despite not using it regularly to make decisions. Only 16% of respondents admitted to lacking sufficient analytics expertise, while 14% owned up to less-than-ideal data visualisation capabilities.
These numbers suggest leaders were largely unaware of the challenges and expectations of data analytics, not yet experimenting enough with the technology to understand its obstacles or consider how it could bolster their decision-making processes.
Fast-forward to 2016 and change has only occurred at the edges. While this year’s report revealed up to a third of Australian organisations were now using analytics, 61% said their decisions were only ‘somewhat driven’ by data insights.
As with 2014, gut feeling and intuition remained key catalysts for guiding important business decisions, a by-product of Australian businesses continuing to rely on executive boards for guidance and direction.
Australian firms are mostly
using data retrospectively
Another trend observable across both reports has been a reluctance to deploy analytics in a predictive, forward-focused capacity.
This was foreshadowed in 2014 when Australian executives were asked to gauge the ‘timeliness’ of their data analysis. On this point, 37% scored themselves a full five out of five marks – a stark comparison to North American counterparts, of whom only 2% thought their data efforts were timed appropriately.
Why would Australian businesses have such disparity when it came to data timeliness? The latest report offers a clue: 39% of Australian firms admitted to employing data and analytics tools retroactively, using them to look back and understand how a decision went wrong. Only 20% used analytics to identify future opportunities, trailing the rest of the world’s 29%.
Accentuating these temporal challenges is the ability for data analytics to crunch numbers in real time to speed up decision-making processes. Such an approach, however, requires bold leadership and a willingness to act fast – two areas where Australian businesses currently lag.
As Let the data do the talking discovered, only 5% of respondents are executing these data-driven insights, less than half the global figure. Meanwhile, a lack of courage or strategic direction from the top remains a significant obstacle for many companies looking to adopt bolder data analytics initiatives.
Analytics is increasingly being deployed
for competitive advantage
A final observation from the two studies is the shifting priorities of executives. In 2014, leaders emphasised technology adaption and innovating to keep pace with changing customer behaviours as key focal points. By contrast, capturing and preserving market share was a crucial driver behind data-driven decision-making in 2016.
This shift in mindset could indicate a growing acceptance of the importance of analytics to gain a competitive edge. It should serve as a clarion call for organisations with under-served data capabilities: leverage your data before your rivals leverage theirs.
In the last two years, new technologies such as machine learning and artificial intelligence have become increasingly accessible to businesses. As both Big Decisions reports have shown, however, executives and company leaders have only made piecemeal progress when it comes to leaning less on instinct and more on the patterns and predictions that data analytics brings.
Australian business leaders need to more quickly adjust to the world they now live in. By acknowledging that data analytics can be a core tool in future-proofing their business, executives should green light the sorting of signals from noise, using data to keep their companies competitive.