This content was solely researched, written, and produced by FT Focus, a Financial Times company. The sponsor had no oversight or approval on the content.
Instant access to insights creates new challenges for the C-suite.
The National Hockey League uses it to generate player insights during games. Non-profit organization WattTime uses it to track air pollution and carbon emissions as they are released into the atmosphere. And Adobe is using it to create highly tailored instant messages to send to customers. Real-time data is revolutionizing how every type of organization works.
That data has the power to change how entire industries think about their core operations. “We’re no longer an airline,” said Veresh Sita, former CIO of Alaska Airlines, famously. “We’re a software company with wings.”
Mark Maybury, CTO at Stanley Black & Decker, says that real-time data analytics are affecting the organization from top to bottom. “By installing IoT [internet of things] sensors on our electric doors or in our customer’s industrial machines we can now use predictive analytics to know before our customers when there’s going to be a failure or to provide actionable business intelligence that enables them to reduce risk, optimize performance, and increase profitability,” he says. “But data analytics are equally important with the bottom line. Last year, we deployed robotic process automation to analyze data and automate processes in IT, finance, and HR. As a result, we saved $3 million.”
Given such potential results, it is unsurprising that more than two-thirds (70%) of businesses say they are investing more in real-time data analytics. However, as new FT Focus research reveals, the knock-on effects on leadership and decision-making can be profound.
Real-time data has empowered functions to independently use its insights to improve the performance of their business units.
More than half (56%) of the 555 senior executives surveyed in IT, finance and infrastructure/operations roles say that because of digital transformation, decisions on investments in new technologies are fragmented not centralized. In fact, 31% of the respondents say that digital transformation has meant that all leaders now run IT-related initiatives, rather than those initiatives being centralized in the IT function.
Empowering function leaders to generate their own insights raises questions of data governance and executive responsibility. It can also expose where their priorities and mindsets diverge. Nearly half of leaders (47%) say the use of real-time data has decentralized decision-making to a large extent in their organization and that digital transformation has also made strategic differences between finance and IT leaders more pronounced – not less.
It is a tension that can stem from the lack of assigned responsibility. In a 2018 survey of Fortune 1000 companies, almost a quarter of respondents said that there was no one person within their firm that had responsibility for data strategy and results.
Filling the gap
Decentralized decision-making can create a vacuum – of accountability and management – for the CIO to step into. Managed properly, data is the lifeblood of smarter decisions. CIOs should be in the ideal position to take on that management and play a stronger strategic role in the organization.
However, FT Focus research suggests that data is not always managed properly: leaders say that the improvement of real-time data management across the business should be one of the IT function’s leading priorities over the next three years. But while of all the functions it is IT, according to half (51%) of leaders, that is most proactive in terms of data leadership, there is clearly room for improvement.
As the technology leader in the organization, the CIO will have to embrace a more strategic approach to real-time data that informs business strategy and customer experience.
At the Financial Times, says chief product and information officer Cait O’Riordan, CxO colleagues are “having data-led conversations that address one key question: is the product or feature we’re building driving us to the outcome we want, and do the metrics back it up? It’s never about whether I think my idea is better than somebody else’s.
“Once you know what metric matters and how to measure it,” she explains, “it’s easier to build the right things and test whether they’re driving the outcome that you really care about.”
The C-suite of every organization is preoccupied with real-time data, but unless it can manage that data efficiently and coherently it will struggle to make the smartest decisions, invest in the right technology, and coalesce around a digital strategy that drives growth.
- 5 Agile metrics to optimize business value
- Essential KPIs for the IT strategic planning process
- CIOs: Use IT metrics to keep score and innovate