Data and analytics are increasingly becoming central to business decision-making, especially in areas such as driving customer growth, improving productivity and managing risk. But even as organizations push to make their decision-making more data-driven, business leaders accustomed to making decisions based on gut-instincts and experience are having trouble trusting insights from data and analytics (D&A).
Forrester Consulting, commissioned by the Data and Analytics Global team at professional services firm KPMG, recently surveyed 2,165 data and analytics decision-makers from a range of industries in Australia, Brazil, Canada, China, France, Germany, India, the U.K. and the U.S.
Forrester's study found that 50 percent of businesses use data and analytics tools to analyze their existing customers, while 48 percent use them to find new customers and 47 percent use them to develop new products and services. Even so, the study also found that executives exhibit a distinct lack of trust when it comes to data and analytics: 60 percent of respondents were not very confident in their D&A insights.
Only 10 percent of respondents felt their organization excels in managing the quality of D&A. Thirteen percent felt they exceled in the privacy and ethical use of their D&A and only 16 percent said they believe they perform well in ensuring the accuracy of models they produce.
"As analytics increasingly drive the decisions that affect us as individuals, as businesses and as societies, there must be a heightened focus on ensuring the highest level of trust in the data, the analytics and the controls that generate desired outcomes," Christian Rast, global head of D&A and a partner with KPMG in Germany, said in a statement yesterday. "Organizations that continue to invest in D&A without determining its effectiveness could likely make decisions based on inaccurate models, which would perpetuate a cycle of mistrust in the insights."
"Failing to master analytics will not only make it increasingly hard for organizations to compete, but will expose their brands to new and growing risks," Rast added. "Seventy percent of executives believe that by using data and analytics they expose their organizations to reputational risk."
Executives felt most confident about the insights they glean from data and analytics around risk and security, though only 43 percent said they're very confident about those insights. Only 38 percent said they were very confident in customer insights and 34 percent said they were very confident about insights into business operations.