Imagine the scene in any boardroom, anywhere in the world. Dateline, a few years ago. Five or six directors are sitting around the table. They are talking about the latest financial results and the previous quarter's performance. In other words, they are discussing the past. They may also be making future plans, but these will be based on previous experience and historic statistics.
Fast forward to 2014. In many companies, the meeting will be exactly the same. But in some progressive organisations, the word on every executive's lips isn't "budgets", "overheads" or even "revenue". It's "data" or more precisely "actionable data", or even "how to monetise data".
Until now, the boardroom has remained largely immune to IT trends and developments. So, why the sudden interest? It's often said that IT needs a more integral role in business planning. The emergence of data analysis tools which can ultimately predict future trends and which, in turn, can help shape business strategy are forcing the issue. Used to their full potential, these tools can be a disruptive technology with the power to drive business transformation. But leadership from the top is needed to harness and fully exploit this promise.
The transformation of data produced by digitisation, the internet and social media from a hard-to-manage by-product to a meaningful asset requires a staged approach. But the first step will be to encourage the boardroom decision-makers to gain a deeper understanding and to convince them that these tools will benefit their individual concerns.
The chief information officer (CIO) may need to take the lead here as they probably stand to gain – or lose – the most from a new data strategy. In a few years' time, when most IT applications have been migrated to the cloud, much of their team's work in maintaining and supporting IT systems will be unnecessary. They now need to carve a new role driving the intelligent use of data to ensure their business begins to work through technology rather than merely keeping the technology working. It will be up to them to articulate the benefits and present the case for building or buying the sophisticated systems and expertise needed.
However the chief marketing officer (CMO) may be close at their heels. They will have been quick to understand the value of having immediate insight into customer behaviour and urgently need to make sense of data gathered from online and mobile customers and social media. The right tools will enable them to measure customer sentiment surrounding their products and services by analysing social media data and tailor them accordingly.
Because different datasets can be more easily combined and examined, micro-segmentation becomes a reality, enabling precise targeting of sub-sets of customers. In today's complex multi-channel retail environment, it will be possible to begin to predict how, when and where customers are likely to buy. Furthermore, they will be able to feed insights to other departments such as product design, business development and the sales team, raising their profile within the organisation.
But what about the chief finance officers (CFOs) who already have their own number-crunching tools? Having the capacity to use huge datasets rather than smaller samples will provide better accuracy and enable them to identify and concentrate on areas posing the greatest risk.
The ability to amalgamate diverse data will enable the type of reporting CFOs only dreamed of before. For example, it offers the ability to integrate internal data and external trends such as currency fluctuations to assess the future performance of new markets and the risk of entering them; to identify anomalies to predict fraud and possible loss.
The HR director can also benefit. Analysis of employee data can help predict high performers which in turn can help guide recruitment. They can assess the impact of training schemes on productivity and predict who is likely to drop out. The ability to make more data-driven, better-informed decisions could help reduce staff churn and recruitment overheads.
Of course, these departments don't operate in isolation and perhaps the most important role here will be left to the chief executive officer (CEO) who will need to have an overall vision, driving the breakdown of divisional barriers and business lines.
The first step will be to build a robust scalable storage infrastructure which enables easy access to data. Businesses will then be ready to implement the necessary smart analytics tools to evaluate data and gain actionable insight.
If board directors want to make a belated resolution for 2014, it should be to embrace this use of digital data and to start thinking what they want from it themselves. Perhaps then the boardroom talk will be no longer based on the past, but instead look more confidently to the future.
It's a process happening in businesses everywhere. Big data analytics may once have been seen as an IT project carried out by the technical team, but those days are long gone. The board ignores it at its cost.
Andrew Carr is the CEO of Bull UK & Ireland
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