Insight-led Business? A sector 2 perspective on data

High-tech, financial services and professional services companies are the most advanced in using data and hence are getting more out of it, while some sectors such as retail are constrained by poor industry conditions.

Although it is not difficult to find examples of data-centric companies in nearly any industry, it is also obvious that some sectors have embraced data more rapidly than others. The most high-profile are Silicon Valley's high-tech companies. But they are not alone. As this survey highlights, many companies within financial services and professional services are highly proficient in making use of data. Overall, these three sectors are the most likely to have created a well-defined data management strategy, or are marshalling resources toward this (see Figure 8).

At Aon, for example, data continues to reshape how its products and services are conceived and developed. Whether proxy data on housing starts feeding into construction insurance, or more granular life insurance models based on a better grasp of life expectancy, its products are built on the back of data. "Ten years ago we already had an unbelievable ability to deal with data, but our business decision making and acumen hadn't caught up with it," says Mr Clement. "It is changing our business model and the fact is that data and the analytics on that data are becoming of equal value to the work we have traditionally done. This is a fundamental change for a company like ours."

This in turn is reflected in Aon's workforce. In contrast to a decade ago, statisticians, actuaries, meteorologists, and other data specialists make up a far higher proportion of its staff. At a macro level, demand for data skills is currently concentrated in a few industries, such as finance or biotech (with consequent shortfalls in such talent widely forecast). The pharmaceutical company AstraZeneca, for example, is now reshaping both its process for discovering and developing new drugs, as well as the way it commercialises these, around data. This is drawing on wide-ranging and complex information, from individuals' genetic data at one extreme, through to industry insights about prescriptions and clinical efficacy, explains Irvin Newbitt, the company's vice-president for enterprise IT.

Still getting started
By contrast, other sectors are not yet consistently prioritising data-led initiatives or skills. For example, our survey shows that while both the manufacturing sector and the retail and consumer goods sector collect large volumes of data, they more often admit to not consistently maximising use of this resource than their peers in finance or high-tech.

Across a range of data types, barring some exceptions, these sectors less often routinely collect information; and when they do, they less frequently analyse it for insight. For example, nearly four in ten retailers have no plans to collect social media data, while a further 23% are still putting collection plans in place. While one-quarter do collect and analyse such information, this is still well below the rate that both financial services firms and technology companies do (Figure 9).

Not all of this is through a lack of desire, but it also reflects the fact that creating a leading data competency requires investment in both technology and skills, which lower-margin sectors will find more challenging. "We see the need to move into the 21st century and a much more advanced IT setup, which we know holds huge possibilities," explains the CFO of a major Spanish retailer, who asked not to be named, "but the fact is that these are not the best times, which makes the investment into the technology, and the talent needed to exploit that, difficult to justify."

At an aggregate level, executives from a wide range of sectors see scope to bolster their company's strategy on the back of a greater reliance on data. Financial and professional services firms are typically ahead on this and thus have a far higher proportion of executives who admit to seeing the benefits. Others, though, do hold greater hope for the future as they get to grips with the issue (Figure 10).

Even the leaders have a lot of headway still to make, reminds RBS's Mr Nelissen. "There's a huge swathe of companies who would like to do this better and are not quite sure what to do next, but recognise they need to," he says. "On a two by two grid, where one axis is the amount of data and other is the use of data, companies like eBay and Amazon are industry leaders on using data, but they only have a very partial set of data about customers. We're at the other end, we have a huge amount of data on customers, but are still moving towards using it more."

Often, this requires the company to gain an internal recognition of the value of data. "The fact is we have all the data, but we didn't put any value on that data," says Mr Nelissen. "That's crazy, because one of the most valuable assets you have is knowing your customer. But that's absolutely changed, because everyone gets it now, they understand the value," he says.

Indeed, Rudy Puryear, global head of the IT practice at Bain & Company, a consulting firm, argues that while data doesn't appear much on the balance sheet of any company, CEOs ought to be considering it in that way. "They have to think about the data, and the health and accessibility of the data, as either an asset that is deteriorating or increasing in value as you add more to it," he says.