6 minute read 22 Jul 2021
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Why Irish organisations need to put data at the heart of their business

By Eoin O'Reilly

EY Ireland Assurance Partner and Head of Data Analytics

Passionate about innovation, data and advanced analytics.

6 minute read 22 Jul 2021

Irish CEOs are showing a greater understanding of the potential for advanced data analytics to deliver competitive advantage.

In brief
  • New appreciation of the value of data has brought about a greater willingness to invest
  • Organisations must adopt a digital-first policy and mindset if they are to compete with born in the internet rivals
  • Businesses need to ensure investments in cybersecurity meet customer expectations while not stifling innovation or investment in other areas

Among the most welcome findings in this year’s EY Ireland CEO Imperative study were those relating to the appreciation of the role data will play in the successful enterprise of the future. 88% of Irish CEOs say the use of data science to anticipate and fulfil individual customer needs will be a key differentiator in future. Furthermore, 84% say the most competitive companies will be defined by delivering data-driven experiences.

This is not altogether surprising considering our experience of data usage during the pandemic. Data and technology had an interesting and important role to play in the battle against COVID-19. We all grew accustomed to seeing medical experts and scientists produce statistical models and projections to help guide policy decisions. People became familiar with epidemiological terms such as R-numbers and gained a new knowledge of statistical models.

When governments spoke about following the science, they actually meant following the data in many cases.

This was particularly interesting for companies that had been hit with a severe shock. They had to move quickly to understand the impact of the pandemic on their business and plan a way forward. It is clear that many of them saw data as key to that. They had to use data to gain a new understanding of their customers, to get product to those customers, to reshape their supply chains, and to create new ways of doing business.

That also brought about a recognition that their data infrastructure may not have been ready for the challenge. Many organisations thought they were well set up but found difficulties with data quality issues, with systems not talking to each other, and with low quality reports.

The new understanding of the importance of data has also brought about a willingness to invest in addressing infrastructural deficits. Organisations appreciate the need to invest in the foundations if they are to reap the benefits of data.

This is reflected in the Survey finding that 84% of Irish CEOs anticipate significant investment in data and technology in the next 12 months. This is very positive news and indicates that executives now see the value of data and know it is something they will be impacted by. Before this they had to be convinced that data was worth investing in. Now they are saying it will really help them connect with their customers. They are saying that data is going to be at the front end of business where it will help serve the customer better and achieve competitive differentiation.

On the other hand, I am a little surprised at the finding that 63% of Irish CEOs said their organisations deliver timely data-driven insights enabling better internal and customer outcomes. While many organisations have made considerable progress in this area, it is not our experience on the ground with clients that they have that level of capability.

Indeed, in most cases the systems and level of analytics in use are quite basic and do not offer the capability required to enable better customer outcomes. This somewhat inflated view of their organisations’ capabilities may be due to a misunderstanding of the true nature and power of data analytics.

That said, all the indications point to an appreciation of the need to invest more in data. But it cannot just be an add-on for the organisation. If companies are to compete against the new breed of born on the internet firms, they will need to emulate them in becoming data-first enterprises.

The acceleration in the value of the global technology giants over the last six to nine months has been off the scale. And the key difference between those companies and their more traditional counterparts is that they have data and digital technology at their core.

When a company is born digital, data comes first in everything it does. The opposite tends to be the case in a more traditional enterprise. In order for data to deliver, projects tend to be set up with analytics done in a lab or other setting at the edge of the organisation.

The major ‘born-digital’ players apply that data-first thinking as they move into new sectors. Amazon is an example of an amazing supply chain company which has been successfully applying its model to different sectors and market segments. One of the areas on its next frontier is prescription medicines and the pharmacy sector, and it is set to turn it completely on its head.

EY research shows that digital-first companies have one-seventh the transactions costs and are 50 times more resource efficient that traditional companies. If a company can do things 50 times more efficiently than someone else, that’s a very compelling proposition for investors.

When considering a digital and data strategy for any organisations, everyone should be challenging themselves and asking: What approach would a digital-first organisation take? Even companies in regulated sectors are looking over their shoulders at potential born-digital competitors. The banks are already seeing parts of their business being cherrypicked by new data-led FinTechs. The open banking directive is giving these new competitors access to customer data which they have the capability to use in new and imaginative ways. Traditional banks are going to have step up lest they end up on the losing side of this data struggle.

In another very interesting finding, 69% of Irish CEOs ranked cybersecurity as the capability most in need of new or increased C-level attention to ensure their company’s growth. Just 37% of global CEOs gave it the top ranking. And this was long before recent high profile ransomware attacks propelled cybersecurity to the top of boardroom agendas.

But organisations need to be cautious in relation to how they are approaching cybersecurity. If approached in the wrong way, it may well stifle innovation and much-needed investment in data if organisations become too fearful of an attack, rather than focusing on solutions and risk mitigation. Cybersecurity has to be viewed within the organisation’s overall risk management framework. While customers are increasingly conscious of privacy and data protection, they are also demanding a superior customer experience. Cybersecurity and advanced data and analytics capabilities are not mutually exclusive, rather cybersecurity should be baked into initiatives from the very beginning of the conversation.

Overall, the results of the EY Ireland CEO Imperative Survey are very encouraging. They give a clear indication that data is being valued for its ability to help an organisation to differentiate itself and its offerings and help it to win in the market. That will drive further investment in the coming years.

Summary

The great majority (88%) of Irish CEOs say the deployment of data analytics capability to anticipate and meet individual customer needs will be a key competitive differentiator in future, with 84% saying the ability to deliver data-driven experiences will be a hallmark of the most competitive companies. There is also strong evidence of a willingness to invest in data infrastructure and capability. However, this will need to be augmented by a switch to a digital-first approach in order to compete with more nimble and agile born on the internet players.

About this article

By Eoin O'Reilly

EY Ireland Assurance Partner and Head of Data Analytics

Passionate about innovation, data and advanced analytics.