How data gets sliced and diced in the business world these days is becoming super critical, both in terms of boosting efficiency while keeping even more detailed tabs on performance.
Just look at today’s story on Fleet Owner’s web site about the increase in truck related highway fatalities recorded by the National Highway Traffic Safety Administration (NHTSA) for 2012. That’s a story that completely revolves around data analysis, especially in terms of figuring out if the trends are turning negative where highway safety is concerned.
From that perspective, take a look at some of the findings unearthed by a recent survey conducted by the American Express Co. and CFO Research dubbed Supporting Growth with New Technologies. That poll found some 96% of U.S. senior finance executives agree they will need to extract much greater value from financial and operating data in 2014.
At the same time, though, executives surveyed continue to report cautious investment plans in information technology (IT), especially for newer technologies such as big data analytics and cloud storage tools.
“Data – and how it’s managed – is becoming increasingly important to how businesses succeed in today’s economy,” noted Jay Cary, vice president of digital and global corporate payments at American Express. “More and more, companies use financial and operational data to drive business planning, discover new market opportunities, improve administrative processes, and other vital activities.”
The survey also discerned that when considering where IT improvements could offer the most value to growth plans, nearly half (48%) of the 154 senior finance executives polled (with 100 based in the U.S. and the other 54 in the U.K.) noting that cutting costs is the big “win” from better data management.
Another 48% take a more insights-driven approach, citing effectiveness through analytical tools as the most valuable way IT can contribute to growth, Cary noted. To that end, 40% of surveyed executives say they plan to increase real spending on IT by 10% or more over the next year. However, while many senior finance executives plan to increase IT spend, only 8% plan to increase spend by 30% or more, he added.
"CFOs continue to seek out technology which allows them to improve business performance and increase employee productivity," Cary pointed out. "Mobile in particular is leading the way – both because of CFOs’ familiarity with the technology and for the real-time benefits it offers employees. As data analysis grows in importance, we expect to see similar investments in big data analytics and cloud-based solutions.”
Yet, with that in mind, contemplate these findings from a different survey – dubbed Big Data, Big Choices – by global consulting firm Bain & Co., which found only 4% of the 400 global companies polled believe they are converting their investments in big data tools into meaningful business insights that improve decision making and financial performance.
The key here, according to Rasmus Wegener, a partner in Bain’s IT practice and co-author of this study, is less of a technological conundrum and more of an issue of companies not supporting big data investments with the right combinations of business and organizational capabilities.
“Low cost, low complexity and a high buzz factor makes big data a compelling proposition for many IT departments,” he added. “But few businesses are ready to make the leap to extracting data-driven insights they can act on.”
Indeed, even American Express found some of the same IT roadblocks exist among the firms it polled, adding that perhaps in a nod to this complex and evolving field, only a quarter (23%) of respondents said that making better use of big data analytics will be among their companies’ priorities in 2014.
And while 51% of the executives surveyed see opportunities to gain competitive advantage using big data analytics, American Express found a surprising 40% do not plan to increase spending in this area over the next year.
For now, many finance executives are concentrating on improvements to current platforms and integration with existing tools before taking larger, calculated leaps. In fact, more than half (59%) of respondents say they still consider big data analytics to be a supplementary form of analysis, and that companies should develop their core analytical capabilities first, American Express reported.
Bain also identified some failure on the part of businesses to drive broader organizational capabilities beyond the IT department as the core reason for the lack of tangible results from big data investments, with a clear minority of companies having critical business capabilities in place. Those include:
- Only 36% of companies surveyed said they have a dedicated data insights team
- Just 23% of companies polled believe they have a clear strategy for using analytics effectively
- A mere 19% of companies said they have “high quality, consistent data” in their organization
Bain’s study further finds that the lack of success by companies to demonstrate payback from their big data investments has not slowed adoption or increasing spend on the technology, noting 38% of those polled feel they have made progress in building state-of-the-art big data technical capabilities and additionally estimates that big data spending will increase by some 30% a year through the end of this decade.
Finally, the study reveals a range of gaps in organizations that have resulted in underperformance to date:
- Between 70% and 80% of big data “top performers” reported that they employ staff in data science and statistics roles, and in business analysis and intelligence
- Just 20% to 30% of “performance laggards” in the survey have staff engaged in responsibilities that allow them to extract insights from complex data and use them to make better competitive decisions
- “Top performers” said they use data to make critical business decisions more than half of the time, compared to an average 28% across all companies and 19% among “performance laggards”
“Resolving to be data-driven requires fundamental change to teams and roles, business processes incentives, and even in leadership,” noted Travis Pearson, head of Bain’s technology practice in the Americas and the study’s other co-author. “Unless you address these requirements, big data success is going to be elusive.”
Similarly, uncertainties about the use and development of cloud technology continue to be a barrier to investment, according to American Express’ findings. For example, less than a third (28%) of respondents in AmEx’s poll said their companies will increase their use of cloud computing in 2014. This is likely due to the fact that 48% still cite concerns with data security, while another third voice concerns about third-party dependencies.
Still, senior finance executives in AmEx’s poll recognize that cloud technologies can offer significant benefits to their companies, including: Greater flexibility (56%; cost savings (37%); improved productivity (37%); and time savings (26%).
AmEx also reported that senior finance executives in its poll do see hope for greater investment in cloud technology in the future, though, as more than half (57%) think that five years from now, data-security concerns are unlikely to pose a barrier to adopting cloud-based financial systems.
Trends to keep one’s eyes upon as the need for better data management will only increase within the trucking space.