Big data benefits recognised in Asia but potential untapped: EIU study
By Edwin Yapp December 2, 2013
- Almost half of firms in Asia believe that big data can improve revenue by 25% or more
- But 91% cite internal roadblocks as preventing or slowing them from adopting big data
CORPORATIONS across Asia have had limited success in implementing big data practices, with only a third saying that they are in an advanced stage of implementation and more than half saying they have made little or no progress, according to a new survey released by the Economist Intelligence Unit (EIU).
Commissioned by storage and software player Hitachi Data Systems (HDS), a subsidiary of Japanese conglomerate Hitachi Ltd, the study conducted by the EIU surveyed more than 500 senior frontline executives and managers in Asia Pacific, 69% of whose companies which have annual revenues of more than US$500 million.
Entitled The Hype and the Hope: The Road to Big Data Adoption in Asia Pacific, the study was conducted from August to October and covered Australia, New Zealand, China, Hong Kong, India and Asean countries comprising Malaysia, Singapore, Thailand and Indonesia.
Speaking at a regional media briefing to reveal the survey results in Sydney last week, Neville Vincent (pic above), senior vice president and general manager of HDS Asia Pacific, said the study revealed that 70% of respondents believe that big data can deliver gains in productivity, profitability and innovation; while about 50% of respondents think big data can improve their revenue by more than 25%.
But despite the impressive figures showing the benefits of big data, 55% of respondents say various challenges are impeding them from adopting big data strategy and practices.
“This survey shows that big data is not a passing fad,” he said. “In fact, over three quarters of those surveyed believe that the effective use of data resources will differentiate successful firms from failing ones.”
Vincent said, if anything, the key takeaway from the study is that decision-makers need to take a different approach to evaluating what their big data strategy is, while at the same time figure out how to extract value out of the data they possess.
He added that the way to achieve this would be for top C-level executives and decision-makers to view data as an asset, rather than just as random bits of information for reporting purposes.
“Executives understand capital assets because they know what [the concept of] return-on-assets is (ROA),” he explained. “Typically your ROA is your income over your asset value. If you have low income and massive data, you’re not getting a good return.”
Vincent noted that while C-level executives understand that people are their most important asset in any organisation, they must go beyond that and recognise that their data is their most important intangible asset.
“That’s why it’s time for them to treat data like capital assets that can bring impact to their business, because doing so will ensure the ongoing success of their business,” he said.
According to Vincent, the survey revealed that virtually all the companies surveyed recognised internal roadblocks that prevented them from getting the necessary insights that would help them adopt big data practices, with 91% of respondents citing factors within their own firms as barriers to adoption.
The top three internal factors cited in the survey include the lack of in-house skills and suitable software, poor internal communications and the unwillingness to share information between departments – the infamous ‘departmental silos’ issue.
In fact, over 40% of those surveyed do not have a big data strategy in place, and of those that do, only 19% feel that their big data strategy is properly communicated within their organisations, noted the EIU survey.
“The lack of in-house software and skills is a real challenge,” said Vincent. “Big data means different things in different industries, so to be successful, you’ll need different skills to understand the market, customers and internal requirements so that people can get the insights they are looking for.
“Poor internal communication is related to keeping a company’s information in silos, which prevents all involved in big data from having access to common data, such as comparing social media feeds to customer relationship data,” he added.
Vincent said the situation is compounded by the lack of communication between top-level executives and front-line management, as the front-liners surveyed wanted more information but only a fifth said they could get the data they need to do their jobs.
“When one department tries to circumvent the challenge by going directly to the source, departments are unwilling to share the information,” he said.
'Acute' problem in Malaysia, Singapore
In fact, 64% of respondents in Malaysia, nearly twice the regional average, cites a lack of communication between departments as the major inhibitor to effectively using data in their organisations.
When asked if ‘informational silos’ were stopping firms from innovating, more than half of responded in India, Malaysia and Singapore agreed, leading the EIU to describe the silo problem as being ‘acute’ in these countries (click chart to enlarge).
Telecommunications (67%), consumer goods (57%) and financial services (52%) industries are leaders in recognising that big data can greatly improve their understanding of customer needs.
However, more than 60% of the firms in the financial services and consumer goods industries haven’t started any big data programmes. Healthcare and life science are lagging further behind; 72% of them haven’t started any big data programmes.
Asked what can be done to address these three challenges, Vincent suggested that top-level executives must view their data as tangible capital assets, realise the impact of big data on their revenue and competitiveness, and take ownership for defining their big data strategy for the company so that they can maximise their ROA.
As for changing culture and improving communication, he said it came down to leadership, where organisations must adopt policies that break down silos and improve internal communications.
“The leadership team has to come together and discuss common priorities and goals for the business. They must have the collaborative cohesiveness that then gets translated to the rest of the company. Put simply, they must set the tone at the top, if not the change will never occur.”
Lastly, Vincent suggested that IT departments need to be involved in the business planning cycle earlier, and be more tightly integrated to the business in order to translate data into intelligence and increase ROA.
“Taking advantage of big data is not an IT but a business practice. But the business must also understand what IT can do to deliver the desired outcome. If not, this will perpetuate the silo mentality and the company will be unable to come up with the right solution,” he added.
Edwin Yapp reports from Sydney, Australia at the invitation of Hitachi Data Systems.
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