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Organizations want and need to be data-driven. We have been talking about achieving this level of insight for years, but the majority of companies have made surprisingly little progress. Most organizations still rely on gut intuitions for decision-making and have a long way to go to leveraging trusted data for data insights across the business.
For the past decade, I have had the privilege of working on an Annual Global Data Management benchmark report for Experian. Each year, we survey more than 1,000 data practitioners and business leaders from around the world on how they are using data. While many things have changed, it is also surprising how much has stayed the same.
While the ways we want to use data have expanded dramatically with trends like digital transformation, the level of trust in data has stayed the same. For the past five years, organizations have reported around a third of their data is inaccurate.
This isn’t just random information stored in a data lake that no one uses, this is the core information in a CRM system or information about customers and prospects. That lack of trusted data means that most businesses see a number of negative impacts from poor data quality, and this generates a high degree of data debt.
It is not that organizations don’t care about their data—it’s the opposite. Most companies view data as a strategic asset and as something that can give them a competitive advantage in the market. We see year after year that organizations are investing in improving their Data Management. They are working on new initiatives like big data, analytics, machine learning automation, and Data Governance.
I think the real challenge we have in the market today is an underinvestment in data skills and talent, with an overemphasis on software.
For years organizations have wanted to take the easy road to Data Management. Stakeholders want to look purely at technology to try and buy their way out of a complex issue. That has led to a lot of technology investment but not an investment in the human capital that needs to implement and leverage the tooling.
While software plays a critical role, it isn’t the only investment companies need to make. The skills of data practitioners and overall staff are what will, frankly, move the needle in achieving data-driven success.
We are starting to see organizations invest in this area with the rise of the chief data officer (CDO). About half of companies have a CDO in place, and many more are looking to hire this critical role in the next 12 months.
From our research, we see this role indicates a dramatic difference in organizational maturity and success with data. When a CDO is present, an organization is less likely to be affected by poor data quality and is more likely to be mature in Data Management best practices and to have a data literacy program in place.
There is a question in my mind as to whether the CDO is making a difference at this point or if it just indicates an organizational commitment to data. Regardless, the skills are what makes a difference. And the hiring is expected to continue. Eighty-four percent of organizations are looking to hire specialized data roles in the next year.
But these aren’t the only skills organizations need to foster. Data literacy is also extremely important. While relatively new in the market, data literacy is the ability to read, work with, analyze, and argue with data. While stakeholders and data practitioners want to spread data insights across the organization, that effort is useless if the individuals receiving those insights are not able to take action and understand the information. That could be why 84 percent see data literacy as a core competency that all employees need to have in the next five years. A new data literate workforce is essential.
To be successful, you have to look at data from multiple angles. It isn’t just about technology or getting the data into a central place (which is frankly impossible given today’s volume and disparate data sources). It is about making investments in people and processes that are going to drive change within the business. It is about education and making sure everyone is able to “speak” data. Without that multi-faceted approach, organizations are going to continue to stay stagnant in their data-driven approach.