Irish companies must start treating data strategy as a foundational enterprise capability, writes Anna Scally, Head of Technology and Media and Kieran Towey, Applied Intelligence Lead.

Today’s hyper-connected world is generating tremendous quantities of data but the organisations responsible for creating much of it are not taking full advantage of the opportunities it creates. The technology, media and telecommunications (TMT) sector has access to a wealth of data, yet it is not utilising insights from it to anticipate and meet customer expectations, develop new market strategies, discover new revenue streams, or win market share from competitors.

This is despite the fact that more than 70 percent of TMT companies believe that effective and widespread data usage will radically change the business model in the coming years.

These are among the key findings of research carried out by KPMG in collaboration with HFS Research among more than 300 TMT executives in North America, Europe (including Ireland) and Asia Pacific.

The study shows that TMT companies are underutilising their data resources. The corollary being a potential for outsized financial returns if they do leverage their data.

Digital transformation during the pandemic

Interestingly, while TMT organisations accelerated their transformation initiatives during the pandemic, this appears to have had the effect of derailing progress on data usage. Almost three quarters (73 percent) of respondents agreed that as organisations focused on survival, most did not have time to consider the treasure trove of data they were creating. Just 11 percent prioritised data deployment ahead of transformation efforts. At a minimum, data and digital transformation should be at the same priority level.

As a result, more than 80 percent of global TMT companies accept that they are underutilising their data volume for competitive advantage due to more pressing business issues related to the pandemic. The same number agree that data investments will deliver greater returns than any other technology investments.

Only 50% of Irish companies agreed with that assessment of the potential value of data investments with a further 40% being neutral on the topic. This suggests that Irish TMT companies do not yet appreciate the full value of strategic data investments.

On the other hand, 100% of Irish respondents rated their digital strategy as optimised both for the needs of today and two years’ time. Given the rapidly evolving geopolitical and economic events in recent months, this response is likely to have changed since the study was undertaken. It also contrasts markedly with the 46% of global respondents who believe this to be the case.

Taken together, these findings suggest that Irish organisations may be viewing data strategy and its value through a different lens than their global peers.

Notwithstanding that, it is essential for Irish TMT companies to address deficiencies in their data utilisation as many of the advances in service delivery and personalisation, and new cost models are dependent on the effective use of data.

Missed opportunities

As it stands, only 32 percent of companies fully utilise customer data. This is leading to clear missed opportunities in relation to customer profiling. For example, by linking location, network, social media, and customer profile data sets, it should be possible for telecommunications companies to detect customers who are on the verge of changing providers and create intervention measures such as discounts, special offers, service add-ons and more. Ultimately, more effective use of data has the potential to transform an industry that is in continuous pursuit of greater customer loyalty and lower churn rates.

Moreover, fewer than 10 percent of the companies surveyed said they have a world-class data strategy for data monetisation, data management and architecture, and data quality and governance. While we expect this situation to improve, these deficiencies point to clear missed opportunities.

Effective use of customer and market data is a key competitive differentiator. The companies that anticipate and meet customer expectations will succeed over those that don’t, particularly as we enter a global recession which will see budgets pared back

The research also uncovered vulnerabilities which should be a cause for serious concern. Only 25 percent of companies consider their organisations to have world-class data architecture and development resources for data security. Given the critical role that data plays in cybersecurity, companies should not be satisfied with being anything less than world class.

Data as a priority

There appears to be a degree of complacency in the industry in relation to the underutilisation of data and dearth of strategy around it. TMT executives feel that data investment is on the right track with more than half of them saying their current spending on data is significantly (12 percent) or moderately (43 percent) above long-term requirements and a further 39 percent saying it is about right. The issue may be the level of priority placed on data now and this clearly needs to be rethought.

More encouragingly, however, more than one third reported high impacts from data initiatives such as scope of products and services, improving cybersecurity and others. Many appear to have placed a premium on data for improving customer and employee experience, enhancing cybersecurity, and improving transactional operations.

Data priorities, ranked

In terms of where data will be leveraged most significantly to drive improved business outcomes over the next two years network operations ranked number one with 24% of global respondents That reflects the central importance of network operations to many TMT companies’ business models.

This should not be taken to infer that Irish TMT companies are not focused on network operations, merely that they may not fully appreciate the role that data can play in improving this critical area of their businesses.

Interestingly, 50% of Irish respondents did rank network operations at number three in order of importance as the function where data will be leveraged to improve performance. This suggests that Irish companies are focused on this area, but it is not seen as an immediate priority.

Service delivery and service assurance were each ranked at number two by 50% of Irish respondents. Globally, functions ranked at number two were much more widely spread and included service delivery (16%), service fulfilment (15%), order management (14%), content management (11%), and service assurance (10%), among others.

These findings indicate a rather narrow focus on the part of Irish TMT companies when it comes to leveraging data to improve business performance. This is likely to change in the coming years with 50% of Irish respondents identifying network operations as the functional area with the biggest gap between the current reality of data access and usage and the aspiration for greater access and usage.

Moving forward

The results of the study point to a data landscape in TMT that will continue to evolve quickly in the next 24 months, to the extent that it may look nothing like it does today by the end of that period.

The bottom line is that TMT companies must start treating data strategy as a foundational enterprise capability. They must treat data as an asset and use it as a competitive differentiator; target at least 10 percent of overall revenue from the monetisation of data through new products and services; use data as the foundation for the creation of a connected enterprise; and drive transformation using data with a focus on customer centricity.

Get in touch

Data and digital transformation are providing companies with new challenges and opportunities like never before. No matter where your organisation is on the maturity curve, there are opportunities to improve.

Talk to KPMG about how new perspectives and fresh thinking can help your business or organisation get the most out of your data. We’d be delighted to hear from you.

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