3 minute read 6 Mar 2020
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How to power innovation by leveraging data and being agile

3 minute read 6 Mar 2020

Data is a strategic asset and organizations can innovate faster when they learn from it.

Working at speed is a key priority for businesses, and we regard rapidly deploying technology to better meet customer expectations as a core value driver, alongside the need to innovate at scale. But while companies understand the need to be quicker and more agile, many are less certain about how that can be done – and they’re turning to data for answers.

“Data is a strategic asset,” says Beatriz Sanz Saiz, EY’s Global Data and Analytics Leader for Consulting Services. “The largest companies use data to learn by the second, and they get smarter by the second. This has all kinds of implications in terms of efficiency, cost savings and customer experience. It’s the only way to move forward. In the 21st century, you can’t really survive as a business without really using data.”

Consider how insurers use claims data to detect fraud and act earlier, manufacturers use data to detect and predict failure points to minimize costly downtime, and retailers use historical customer purchase and search data to target them more efficiently with relevant products. Almost all businesses can use data to optimize operations. According to EY’s research report, Six habits of digital transformation leaders, almost three-quarters (71%) of corporates surveyed use insights from data and analytics to speed innovation. In fact, it’s their number-one method of doing do so, ahead of re-engineering and automating processes (62%) and streamlining hierarchy (61%). And while companies generally understand the value data brings to their business, leaders really get it: 83% are using data to help them innovate faster, compared with only 70% of laggards.

Figure 1: Leaders more aggressively use data and insights to innovate

EY’s Beatriz Sanz Saiz stresses the need for companies to bring trusted data into the heart of their businesses, learning how to extract value from it. “The old approach to data was to build up intelligence separate from the operations,” she says. “Companies have been doing that for the past 20 to 30 years. They used to move the data from operations to create a data warehouse or a data lake, and then bring it back to the operations. So basically 80% of the time was spent moving data around, and only 50% of the time the algorithms effectively implemented. It’s like separating the brain from the body. It doesn’t work well.”

Spotlight on agile methodologies

Another significant way companies are looking to increase the speed at which they innovate and create real business value is by using agile methodologies.

Among leaders, 68% use this approach, compared with 46% of laggards. We find that companies embracing agile methodologies enjoy significant benefits: 51% of companies using agile are achieving results faster; 48% are delivering a better customer experience; and 41% have clearer team communication. If time is of the essence for modern businesses in the Transformative Age, it seems that leveraging data and updating internal processes is the secret sauce.

Actions for the boardroom

Using data to power innovation should be priority for all businesses. Yet there are a number of considerations to keep in mind in order to succeed:

  • Understand and respect the significant value data can deliver to your business, underestimating it at your own risk
  • Ensure data is trusted and has meaning. It must be clean, of high quality, compliant and secure
  • Embed data at the heart of the business. Moving data out of the operational business is inefficient – instead, organizations must connect the “brain” of the business (the data) to the “body” (operations)

Summary

Companies in every sector understand that they need to be quicker and more agile. But the question is, how? Findings in a recent EY survey show that leaders in digital transformation are using data to help them stay ahead.

Whether it’s to drive greater efficiency, cost savings or customer experience, learning from data – and using agile methodologies to implement these new learnings – can accelerate innovation.

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