As part of digital transformations, organisations are capturing, storing, and consuming data at a faster pace than before. Historically, data lakes and data clouds have already been projected to grow at an exponential rate given the range of information that can be captured. Comparing IDC’s Global Datasphere growth report in 2018 to a refresh of the report in April 2020, the explosive growth in data volumes has not been hindered by the COVID-19 pandemic. On the contrary, the pandemic has accelerated it, and the growth trends have been disrupted as the content pivoted towards media and entertainment, healthcare and infrastructure industries dramatically, away from traditional leaders in manufacturing and financial services. In the process of digitalisation, organisations are capturing, storing, and consuming data at a faster pace than before. Between 2020 – 2024, IDC forecasts data growth at a compound annual growth rate (CAGR) of 26%. The COVID-19 pandemic has caused a sharp increase in data generated from video conferencing and streaming. Data from sensors are also expected to grow aggressively as IoT becomes more prevalent. In the next three years, the world will create more data than it has in the past 30 years.
Data Explosion: Chaos and Opportunities – “Pandemicelerated”
While data explosion triggers new opportunities, accompanying challenges have also emerged. The accumulation of growing proportions of unstructured data - residing across multiple devices and platforms – is giving rise to data chaos if left unmanaged. Unless organisations take control of their data, business units will have an uphill task of effectively using the data. For this reason, organisations must take active steps to manage data chaos, or risk falling behind the competition.
In June 2020, the Ortus Club brought together a group of data leaders - CDOs and Analytics Executives for a virtual roundtable to share their experience and views on the new business realities brought on by the global coronavirus pandemic.
As the moderator of the session, I noticed some trends emerging across industries such as financial services, healthcare, real estate, consumer goods, and technology. My observations detail the approaches and outcomes of organisations who are currently dealing with data chaos, and how they have applied practical approaches to data sharing as part of their COVID-19-catalysed digital transformation.
Managing data chaos
The group unanimously agreed that the pace of digital transformation has accelerated tremendously. Every company in attendance was experiencing a dramatic surge in data creation, collection and consumption.
Many companies have shifted their focus to online customer and employee channels in a bid to deal with the business impact from lock-down and safe distancing measures. In addition, the mandate of remote work emphasised the need for accessibility and data sharing capabilities by teams across geographies and departments. The pandemic brought to light shortcomings within organisations, but these gaps also serve as opportunities to innovate. Here are some tips that the leaders shared:
Harnessing the value of big data
Amidst the COVID-19 pandemic, the demand for data has increased within organisations and between parties involved in the value chain. Those in attendance at the virtual roundtable shared examples of the increased velocity in data movement between teams, as well as external organisations, and the implications of remote work:
In an insurance firm, the benefits of digitalisation were discussed in various internal stakeholder meetings, but progress was slower than expected. After the pandemic, the thrust for change was amplified by demand from their partners. Companies from their distribution channels started asking for more ways to use data to provide a digital experience for customers. This example of an external pressure highlighted an industry push towards a data-sharing economy.
A real estate player shared how they had shifted their focus from internal to external data collection. The motivation arose from the limitations of using “rear-view data” to make decisions. With the pandemic, footfall in commercial and retail properties trickled to a literal halt (pun intended). Relying on internal data collection alone – with a vast gap of information during the circuit breaker or lockdown period – is like flying a plane with the instruments turned off. To overcome this, they have planned to ingest data from the external environment to provide leading indicators for C-suite decision-making. In this way, the insights uncovered will provide a strategic edge for investment in property and other assets, positioning them for growth once the lockdown measures are gradually lifted.
In a telecommunications enterprise, teams were using data to reduce their customer churn rate. Using real-time data, the marketing team identified customers with high churn risk based on browsing patterns and social media traffic. A database was then linked to the marketing ecosystem to build a personalised campaign to target the customer to encourage re-contracting. The availability of real-time data became an enabler for marketing performance.
Within a technology company, remote work has also accelerated information flow between individuals and teams. Before remote work, employees could signal completion by simply standing up in their cubicle and alerting their adjacent colleague. These simple protocols now need to be translated more efficiently into digital means. Moving forward, organisations also recognise the need to automate processes to support the flow of information so that bottlenecks do not occur between team members. Additionally, having a single source of truth for decision-making will be vital.
Data as the currency for trade
In looking for innovations to derive new revenue streams, an increasing number of organisations are looking at data – turning it from a cost-incurring liability to a revenue-generating asset. Each organisation holds valuable information about their customers and partners, and a different facet depending on which part of the value chain they are at. The opportunity to monetise or barter for more information encourages data exchange. Supermarkets and banks are already working closely to build a holistic view of their customer’s spending pattern, which is then used for targeted cross-marketing campaigns. Digital-native companies look for opportunities to create new products and service offerings based on their consumer’s spending and online interaction patterns, working with the partners in their respective areas. These examples will continue to propagate as more organisations discover mutual benefits.
Each of the participants shared accounts of how teams are being formed and organised to look for such opportunities, many of which challenge the traditional guard-rails of their core businesses – a peer in the industry can be a competitor or a partner, or both.
Encouraging data flow between organisations
To facilitate the flow of data between organisations, one of the key tenets will be developing a robust compliance framework. Data sharing is risky business because of the potential for misuse and the impact on individuals. Concerns were raised by the healthcare and insurance sectors over sensitive personal information (PI) and personally identifiable information (PII) patient data. The same data could potentially benefit or penalise their clients. As leaders, the charge will be to develop a data governance framework that is compliant to regulations and promote the ethical and unbiased use of data, with minimal compromise to the velocity of data movement. One participant provided an analogy towards managing the information superhighway: The art will be in creating toll gates and pathways, to ensure that as data moves from point A to B, it is going through the appropriate regulatory and compliance frameworks.
In data governance paradigms, data classification becomes key. Certain data gets to move from point A to B via the highway once a toll has been imposed to anonymise the information, while other data may take a different route before automation is possible. Creating these pathways are essential to attaining business agility, and solution providers of data management software are working towards automation and AI-driven solutions to identify sensitive data.
The roundtable participants also agreed on the necessity of preparing for the next big move. To facilitate data sharing and interaction within the industry or work with the government to do so. In other words, to self-organise or be-organised.
Staying ahead, staying in-line
Organisations recognise the need to have coordinated data strategies and frameworks to make sense of information, whether to gain competitive advantage or to stay in the race. While pursuing this endeavour, the data breach between Cambridge Analytica and Facebook has raised the requirements for data governance and data privacy, as consumers, governments and organisations have become more aware of the unintended risks. It also brings questions into the way information is collected and how organisations communicate the use of data with customers. Within the insurance sector, it is common for a disclaimer to state that information collected is only meant for insurance purposes. This puts the organisation in a bind because the legal department then holds data teams to the clauses, thus inhibiting the sharing of data outside the organisation. Even for the digital disruptors that came before the pandemic, their business models have been disrupted - the gig and sharing economies have seen a vast redistribution of revenues from their business units, or see some revenue streams vapourise in an instant due to the sharp ramp-down of human contact.
Businesses that can navigate unchartered territories while staying compliant will stand to gain the most from data sharing. This will require close collaboration between data and legal teams to identify a way forward while providing customers with the peace of mind that their information is handled with care – gaining this trust, is no longer a given.
For some, the unknowns will be enough to render them as spectators. But organisations who move swiftly - with clear strategy and discipline – will be able to enjoy the competitive advantages of pioneering new frontiers, where fortune has favoured the bold.