A recent survey examines how businesses use data and analytics to manage risk, cost and growth – and where confidence is lacking.
Gaps in capabilities around quality, effectiveness, integrity and resilience drive a cycle of mistrust. 80% of South African leaders believe using data and analytics can help their organisations combat fraud.
Most business leaders today believe in the value of using data and analytics (D&A) throughout their organisations, but say they lack confidence in their ability to measure the effectiveness and impact of D&A, and mistrust the analytics used to help drive decision-making, according to a new survey from KPMG International.
The survey shows that most businesses in South Africa use D&A tools to analyse existing customers (51%), find new customers (42%) and to develop new products and services (49%). Yet, executives do not trust that they are managing their D&A processes effectively to generate desired outcomes and lack the necessary measures to assess the efficacy of those models.
“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 generates desired outcomes,” said Karin Kruger, Associate Director, Data and Analytics, KPMG in South Africa. “Organisations 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.”
Kruger says, “Failing to master analytics will not only make it increasingly hard for organisations to compete, but will expose their brands to new and growing risks”.
Levels of confidence
There’s some level of confidence displayed by respondents in South Africa about the insights they’re deriving from D&A in the areas of risk and security (69%), for customer insight (68%) and 65% around business operations.
“Transparency about the use and impact of an organisation’s data and analytics is key to overcoming the long-held bias that conventional decision-making is more reliable,” says Frank Rizzo, Data and Analytics leader at KPMG in South Africa. “We need to take D&A out of the ‘black box’ to encourage greater understanding about its use and purpose to help organisations trust the new insights it can bring.”
When it comes to assessing where the trust gaps may be within an organisation’s analytics model, respondents rated how well their processes aligned and performed against the capabilities outlined under four anchors of D&A: quality, effectiveness, integrity and resilience.
“KPMG offers recommendations that can assist organisations with closing the trust gaps across the analytics lifecycle,” says Rizzo.
These comprise seven key areas:
- assessing the trust gaps
- creating purpose by clarifying goals
- raising awareness to increase internal engagement
- developing an internal D&A culture
- opening up the ‘black box’ to encourage greater transparency
- having a 360-degree view by building ecosystems
- stimulating innovation and analytics R&D to incubate new ideas and maintain a competitive stance.
“It’s imperative that D&A leaders make trust a high priority,” says Rizzo. “To be a competitive, D&A-driven organisation, business leaders must navigate the complex processes, systems, compliance requirements, and governance to confidently and consistently move from insights to measurable action.”
|Karin Kruger||Frank Rizzo|
|Associate Director, Data & Analytics||Data & Analytics Leader|