You’ve no doubt heard the cry many times already – “Data is the new gold!” And it’s true. Though of course not everybody loves data in the same way that people love gold in all its shiny allure and opulence, the analogy fits – especially when you consider the thousands if not millions of prospectors all over the globe scrambling on top of one another to get their hands on it.
But, like gold, data isn’t valuable in its raw state. To obtain value from gold, it first needs to be processed – fashioned into jewelry or minted into coins. Only at this stage do you have a saleable product that consumers desire to own, and can thereby drive a business profit. Similarly, data is essentially valueless when collected in isolation. And so, like gold, it needs to be processed – in this case manipulated and analyzed – to extract business value.
In this sense, it is in big insights rather than in big data itself where the real worth lies. Though of course collecting information is vitally important, it is only by expertly analyzing and extracting smart and actionable insights from it that gives companies the opportunity to gain advantage and drive profit. And here, indeed, is where the winners and losers of the data rush will be defined. Today, it’s possible for practically any organization to start collecting more data than they know what to do with – but it’s only those that can connect the dots and make informed decisions from it all that will be the winners.
Quality is also important. Even the most experienced goldsmith can’t make a 22 karat ring from a 9 karat nugget. Only with data that is of exceptional quality will businesses be able to create reliable models that can generate high-quality insights. When information is incomplete, biased, outdated, or of otherwise inaccurate or poor quality, any insights drawn from it will be equally flawed and pretty much unusable.
Extracting Value from the Raw Material
What’s required are the right tools and the right people – experienced gold data-smiths who can add the most value to the raw material.
Today, as the new digital gold rush gathers pace, businesses are struggling with the sheer amount of data they need to manage. There’s data pertaining to operations, product, service, customers, etc., etc., etc. Businesses need it all in order to complete their digital transformations, fuel artificial intelligence (AI) projects, open new revenue streams, better target customers, identify (and rectify) operational inefficiencies and slash costs. And since they need it, they should go and get it.
But data in and of itself remains meaningless – all that matters is the actionable insights that can be drawn from it if any benefits or advantages are to be realized. The whole point of crunching the numbers is to get closer to your customers – to understand their needs and preferences, their pain points, the user experience, and the buyer’s journey.
Investment in the necessary technology is of course paramount to success – and CMOs are beginning to realize this. According to Gartner’s 2018/2019 CMO Spend Survey, “Marketing technology is the single largest area of investment when it comes to marketing resources and programs.” Up from 22% of the 2017 marketing budget, technology now accounts for a massive 29%.
(Image source: gartner.com)
However, Gartner also notes that while marketing technology gets the lion’s share of investment, lower investment in talent puts an organization’s ability to leverage the new tools at risk.
Research from Deloitte and the CMO Council finds that 56% of “growth CMOs” prioritize data and intelligence analysis as the top skill to help them evolve their growth agenda, with 50% citing market insights and knowledge as the top priority, and 49% developing a holistic view of the customer journey. CMOs can indeed no longer be simply responsible for brand, advertising and traditional marketing alone, but must lead their company’s effort to engage consumers using deep, data-led understanding of the customer journey to ensure the entire business works together to deliver an outstanding, personalized experience.
The Rise of CDOs
So, what should companies be doing? Well, many are appointing a chief data officer (CDO) to lead the charge. In fact, Gartner predicts that 90% of large organizations will have a CDO in place by 2020 – and with good reason. A good CDO will bring a fresh perspective to the opportunities that exist from all the facts, figures and information that companies now have on their hands. Employing a dedicated C-suite executive to be solely accountable for driving a culture of analytics and data-driven decision making at all business levels will allow organizations to turn bare stats into pure gold. But they will need authority to enable this to happen – which means that the CDO must report directly to the C-suite, and have its full support.
In addition, businesses must start breaking down silos, which today stand as one of the biggest obstacles to digital transformation, and have been plaguing large companies in particular for many years. When information is dispersed and disconnected – as it often is through dozens of applications and databases across a global enterprise – it becomes almost impossible to connect the dots and look for patterns in meaningful and creative ways. According to the Deloitte and CMO Council survey, as many as 36% of CMOs say silos are a blight on their business, with 47% saying that silos that keep information and touch points separated threaten to derail the success of growth strategies.
So, is data really the new gold? Of course it is – though organizations must be careful to recognize that the information in itself isn’t valuable, but the insights it creates. They must join the rush to collect the information, while at the same time creating strategies for what they are going to do with it. So, go get it – but then invest in the technologies and the people who can connect it, analyze it, and extract value from it. Only this way will you be able to make informed decisions that will keep your company competitive in the future.