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Nearly three-quarters (70%) of businesses are struggling to unlock the value of their data – directly impacting their ability to innovate, according to 100 C-suite executives in Forbes Top 2000 companies across Europe.
Nearly a third (30%) of business leaders cite cost reduction as their number one strategic objective, but as threats of recession loom, the better utilisation of data could be an antidote for the short term and long-term innovation. Fifty nine percent believe organisations who are prioritising data-led decision making are stealing market share, with 58% fearing they will fall behind the competition if they do not make better use of their data, highlighting how the inability to innovate could leave many businesses struggling to compete.
An inability to turn ideas into new products, services and strategies, at pace, continues to put organisations at risk of failure. This innovation-execution gap, first revealed in Bayes Business School and VMware’s 2018 report, Innovating in the Exponential Economy, has been exacerbated by organisations struggling with data.
Four of the top seven strategic business objectives over the next two years require accurate, relevant and timely data to inform decision-making, from understanding workforces and productivity to improving the customer experience, according to the business leaders surveyed. Fifty two percent incentivise their teams to be more innovative and find new ways to bring products, services, and strategies to market.
“Most companies are not short of good ideas. But despite progress in executing on their ideas, the innovation-execution gap has persisted, due to a lack of digital capabilities and skills, rigid infrastructures, and various constraints and risks associated with data sovereignty and compliance,” said Professor Feng LI, Chair of Information Management at Bayes Business School at City, University of London, who authored the foreword to VMware’s new Innovation-Execution report, a follow-up to the original 2018 paper. “Interestingly, having too much data and issues over access to the right data have been cited as major barriers, and the current technological stack in many organisations is preventing them from becoming more data-driven, resulting in strategic opportunities being missed.”
The barriers to data-driven innovation success
The data barriers flagged by business leaders include organisations having too much data, cited by 83%; difficulty in accessing the right data (74%), and technology constraints (60%). Data sovereignty, where data stored or collected is subject to the privacy laws and governance structures within a nation, industry sector or an organisation, is also a major concern, with national (76%) and industry (67%) directives highlighted as significant barriers to realising the value of data.
Joe Baguley, VP & CTO EMEA at VMware, said, “Innovation can’t be put on ice, especially in economic downturns. It is something that runs through a business’ DNA and it takes time, the right culture, the right processes and the right technologies to foster and ensure it succeeds. It isn’t a nice-to-have, it is what creates competitive advantage, attracts and retains employees, and creates shared value. Any transformation, whether it is wholesale organisational change or identifying ways to reduce costs and optimise processes, relies on a digital infrastructure that can support informed decision making. Data does this. If business leaders can better utilise the data they have to drive decisions and improve people’s data literacy across the organisation, they can overcome challenges including data sovereignty restrictions and will be better placed to generate real business advantage from their innovation investments.”
Bridging the innovation-execution gap
Organisations looking to tackle how data is hampering their innovation efforts are advised to focus on people, process and technology to bridge the gap between ideas and tangible impact. And when that connection is made, organisations can not only realise value from their data but use it to unlock greater levels of innovation: 64% are using AI and machine learning to inform innovation.
“The companies that get this right at the right time will increase their market presence and share,” commented one Chief Medical Officer from a Swiss healthcare firm, who was interviewed as part of the research. “They will be in an advantageous position, ahead of their competitors. Improving data quality and managing data well by maintaining customer privacy improves the company's reputation and increases its revenue. Also, by adhering to all the regulatory norms set by the authorities, companies can innovate by using the available data and gain a competitive advantage.”