As the digital era rolls ever onwards, new technologies, data-sharing policies and transformative regulations continue to add layers of complexity to the already central role of data. In order to prepare, evolve and simply cope with these developments, businesses across the globe are prioritising the hiring of more senior data leaders, but new research from Experian shows Australia is falling behind.
More than half of C-level executives globally say that they plan to hire a chief data officer (CDO) in the next 12 months, Experian research shows. However, just 21 per cent of Australian businesses currently plan on taking the CDO-led path. At the time of writing, 14 Australian-based “chief data officer” positions are advertised on LinkedIn, with the US and UK showing 84 and 72, respectively.
With the CDO accountable for company-wide data assets and bridging the gap between IT and broader business priorities, there is no doubt Australian businesses require the same level of senior leadership to unlock the power of their business data. So why is it that Australian businesses are failing to appoint a seat in the C-Suite for our data decision makers? Or of equal concern – why are some of the CDO roles that exist regarded as inconsequential, or granted low levels of influence?
Off the back of the Productivity Commission's recent Data Availability and Use Inquiry, which recommended sweeping changes to increase data sharing amongst Australia’s business community, local leaders simply cannot afford to delay action when it comes to data management this year. At the very least, new legal frameworks will enforce changes in the data collection, storage and use processes for even the smallest of businesses. Not to mention, leaders that bury their head in the sand may compromise the multitude of data-driven innovation that these new reforms will present.
To keep pace with changing consumer demands, evolving, data-driven business landscapes, and regulatory conditions, businesses need to embrace more sophisticated data management policies and take more significant action. This requires a top-down approach from the most senior levels of management in an organisation, hence the need for a CDO to champion the requirements for any business wishing to become a data-driven company.
Where the problems lie
While most organisations say that data supports their business objectives, less than half of organisations globally (44%) trust their data to inform important business decisions. In fact, 27% believe that their current customer and prospect data is inaccurate.
We found that more than half of organisations in Australia (60%) say that this lack of confidence in data contributes to an increased threat of non-compliance and regulatory penalties, and consequently, companies risk a downturn in customer loyalty (51%).
Without a foundational level of confidence in their data, organisations adopt manual processes and workarounds to augment their information, which can introduce further errors. Although 61% of companies admit the top reason for data inaccuracies is caused by human error, most businesses still use people to capture and maintain their data. It’s a vicious cycle.
The increasing volume and breadth of data entering databases have also placed a strain on legacy systems, spurring a wave of modernisation efforts. 41% of Australian companies say that data quality issues cause delays for these migration projects, on par with organsiations globally and making this the most common cause of data migration delay.
With an additional 41% of organisations spending a majority of their time preparing data for insight, and 44% of Australian businesses spending most of their time analysing data, there is clearly a growing need for more robust data governance.
A strong emphasis on data quality, investing in the right tools, and striking a good balance between IT and business stakeholders are imperative for sustainable data migration, preparation and analysis. From our experience, establishing data quality processes at the beginning of a deployment is most effective and reduces the likelihood of cleaning up the issues at a later date.
Hiring a CDO is a step in the right direction to help ensure that an organisation’s data transformation projects are delivered in a strategic and holistic way across a business.
Hope for the future
Change is already upon us. Our study found that the prevalence of human error within data sets decreased by nearly 23% since 2016. This suggests that either organisations are getting better at training their workforce to uphold data standards, or that they have implemented adequate technology to reduce human error at the source.
In general, we are encouraged to see a renewed global focus on creating central data roles in order to sustainably evolve with the surrounding digital world. But local leaders need to take transformation into their own hands – with relative urgency – and make the most of the valuable information surrounding them.
Without a CDO or similar dedicated role aligned with data management priorities, Australian companies will find themselves in hot water with each wave of innovation and regulatory change. Senior leadership and a holistic company-wide approach are key.Read more: Shedding light on dark data: An untapped resource for Australian businesses to gain customer insights
Andrew Black is managing director, Experian Data Quality & Targeting, A/NZ.