Ineffective Data Use Limiting Business Innovation
The total amount of data that will be created globally is expected to reach 181 zettabytes by 2025. And yet, many companies are struggling to unlock the value of the data at their disposal. This is having a significant impact on their ability to innovate and rapidly adapt to customer demand.
Continued economic uncertainty is resulting in business leaders turning to cost reduction exercises to remain operational. However, this puts an even greater emphasis on the need to better understand their data to become a more data-driven organisation. Fortunately, it is not a case of reinventing the wheel but optimising data usage to remain competitive in a fast-moving connected landscape.
A lack of effective data analysis puts a constraint on identifying the products, services, and strategies that are more suited to today’s market. Of course, this is not a new problem. The innovation-execution gap, first revealed in Bayes Business School and VMware’s 2018 report, Innovating in the Exponential Economy, and now further researched in 2022 in a second chapter, has been exacerbated by organisations struggling with data management in the wake of the pandemic.
Making informed decisions
Overcoming this challenge does not have to be intimidating. What is key to transforming the business is to leverage accurate, relevant, and timely data. This will help companies improve their understanding of everything from the hybrid workforce and productivity to how best to improve a customer experience that has transformed significantly over the past two years.
For many businesses, both local and abroad, the problem is not being short of innovative ideas. It is the innovation-execution gap that persists due to a lack of digital capabilities and skills, rigid infrastructures, and various constraints and risks associated with data compliance.
A major problem lies in having too much data and trying to understand what the right data is to use. Unfortunately, many South African companies are struggling to modernise ageing technology and infrastructure that prevent them from becoming more data-driven, resulting in strategic opportunities being missed.
Added to this is the matter of data sovereignty. This is the idea that data is subject to the laws and governance structures of the country where it is stored. The likes of General Data Protection Regulation (GDPR) in the EU and the Protection of Personal Information Act (POPIA) in South Africa are just two examples of how governments are looking to enforce privacy regulations to prevent data that is stored offshore from being subpoenaed by that country’s government.
Despite these hurdles, innovation cannot be stifled especially in times of economic crisis. It is the innovation that differentiates a company from others in the market. By putting the right data processes and technologies in place, a business can attract and retain employees, create a unique value proposition, and provide improved value to its customers.
Central to doing this is putting a digital infrastructure in place that can support informed decision-making. Such a modernised environment can reduce costs and optimise existing processes. Underpinning this transformative change is data.
If business leaders can better use the data they have to drive decisions and improve people’s data literacy across the organisation, they can overcome challenges which include data sovereignty restrictions. This will ensure the company is better placed to generate genuine business advantages from their innovation investments.
Linking innovation to execution
However, this is not only a technology problem. Companies who want to bridge the divide between their data, innovation, and execution must also turn to their people and the processes it is putting in place to unlock value.
When people, processes, and technology integrate, a company can start getting the full benefit from its data and use it to innovate at a much faster rate than previously possible. It also enables the capabilities of using the likes of artificial intelligence and machine learning to help advance innovation through data-driven insights.
Once these puzzle pieces fall into place, the organisation can significantly increase its market presence and share. It will put the business in a strong position while, at the same time, seeing the company benefit from improved data quality and data management. All while customer privacy and regulatory compliance remain front and centre. By having the data privacy aspects managed as part of the process, decision-makers can focus on innovating and using their data to unlock competitive advantage.
This article was written by Lorna Hardie, Senior Director of VMware for Sub-Saharan Africa