Despite the hype, most organizations aren't relying on analytics to guide their decisions. Indeed, just 15 percent of more than 2,400 business leaders and managers surveyed say their organization uses advanced analytics, research by MIT Sloan Management Review Connections finds.
For many, the problem is trust — trust in the data and trust in its utility as a decision-making tool, according to the Data, Analytics, & AI report, sponsored by software firm SAS. Building that trust may require organizations to overcome two persistent gaps that are holding back analytics.
The first is a utility gap. Although three-fourths of respondents have greater access to "useful" data, only 43 percent say they frequently can leverage the data they need to make decisions.
That feeling that leaders don't have the "right data" on which to base decisions reveals a second gap: trust. Only 11 percent of respondents say they always trust the relevance of analytics data, while 12 percent always trust its timeliness. Less than 10 percent say they always trust its completeness and accuracy.
There is some hopeful news. More than two-fifths of respondents say they often trust the relevance, timeliness, and accuracy of analytics data. The downside is only about one-fourth say they often trust the data's completeness.
Respondents say data quality efforts need improvement. Over two-fifths of respondents describe their data quality approach as informal. That means they reactively correct the data for accuracy, consistency, timeliness, and completeness.
"The worst place to fix the data is when it's already been collected," says Jeanne Ross, principal research scientist at the MIT Center for Information Systems Research in Cambridge, Mass., in the report.
One-fifth of respondents say their organization has a formal approach to data quality as part of data governance. This includes routine monitoring, managing, and improving data quality.
To improve data quality, Ross recommends organizations focus on the business process that gathers the data. That's easier said than done, she admits, but the effort is worth it. With analytics, "your unique opportunity is your own data," she explains.
It's going to take more money to get to that point, the study notes. Yet only 15 percent of respondents say their organization significantly increased funding of data quality efforts in the past year.
Data at Risk
Executives trusting the data is one thing, but customers have trust issues with the organizations collecting that data from them. "If customers and partners become reluctant to share data," the study points out, "the data-driven enterprise is at risk."
Most survey respondents have implemented a data breach response plan or plan to do so soon. Nearly half track where the organization stores data, and 43 percent have an updated list of sensitive data. Also, 44 percent train all employees on IT security risks and practices, while one-fifth are rolling out such training.
Many respondents' organizations also are adopting better cybersecurity practices. Nearly two-fifths use a recognized cybersecurity framework and another 15 percent are currently implementing one. Nearly half either have a chief information security officer or are creating that position. And some organizations are using analytics to protect data.
Privacy efforts aren't keeping up, though. About two-fifths of organizations currently notify customers about how their information is collected and shared, and have controls over how employees use that data. Conversely, 14 percent of respondents say their organization is not concerned about privacy.
Taking the Lead
Executive leadership is a common thread for organizations adopting data analytics. Most respondents say executives seek out data and use analytics in decision-making. However, leaders are less likely to prioritize analytics investments.
"One area where leadership might do more is analytics skills in the workforce," the study states. About two-fifths of respondents say lack of analytics skills inhibits innovation.
That may be changing, though, as about one-third are training or beginning to train staff in analytics skills. Moreover, the study points out that collaborations between analytics experts and business units can begin to transform the organization's culture to incorporate analytics.