What's Your Siloed View of Data Management Costing?
Data is changing the way all of us do business. Retailers have a desire to use data in order to enhance the customer experience and, ultimately, make their companies more profitable. Retailers today are just beginning to scratch the surface of how they can use data. They're optimizing their websites, improving product distribution and call-center intelligence, tightening their supply chains, and more.
Even with all of these advances in data analytics over the past few years, most of us have underutilized data. According to a recent Experian Data Quality survey of over 250 chief information officers, 83 percent of those surveyed believe data is a valuable asset in their organization that's not fully being exploited. In addition, 64 percent believe their organization’s ability to exploit available data to drive the business forward could be improved.
The reality for many retailers is that manipulating data isn't going to get any easier. The volume and variety of data coming in from even more channels is only going to increase. In fact, the CIOs that we spoke with said they expected data volumes to increase by an average of 33 percent in the next 12 months to 18 months.
One of the main reasons retailers are failing to capitalize on the data they have today is that they haven’t advanced their data management strategies. The majority of retailers have a very siloed approach to data management. Data collection methods and management techniques vary widely across different channels, and most brands don’t have a central data source. For example, marketing may clean data before the holiday season to ensure campaigns are delivered, but any changes may not be reflected in the call center’s database. Retailers have divided customer data across the enterprise, making it difficult to gain a single customer view.
Those older techniques of data management may have worked before when the main purpose of data was for marketing communication delivery and fulfillment, but now retailers are trying to use data analytics to improve and personalize the customer experience. That requires a much deeper level of understanding than just having accurate contact data.
CIOs are encountering this issue directly. In fact, they say the biggest challenge facing their organizations in the next 24 months is increasing customer expectations. Without better utilization of customer data, organizations will simply not be able to meet those demands.
However, no one said meeting that challenge would be easy. Data management techniques in many cases need a complete overhaul, especially when it comes to staffing. The main failings cited by the CIOs that we spoke with around data quality projects are:
- a lack of relevant skills and staff;
- a lack of investment in appropriate technology; and
- a lack of knowledge about the importance of data quality.
All of these points have to do with the staffing and strategy around data management. To better use data, organizations need a more centralized strategy and an owner of data. Seventy percent of the CIOs we spoke with said they believe it's difficult to make decisions because no one in their organization seems to own the data.
To own their data, many organizations are starting to add a chief data officer (CDO). This role is emerging for three key reasons: de-risk data driven projects, curb costs around poor data quality, and handle increasing regulation.
The CDO role is relatively new. Most of the CIOs that we spoke with who had a CDO in their organization said the role had been created in the last six months. However, 63 percent of the organizations we talked to without a CDO would like to see the role added.
While a CDO won't solve all of a retailer’s issues around data management, hiring one is certainly a step in the right direction. This person can be seen as a guardian of data or a trusted advisor across the business.
In speaking with several CDOs, I've found that many of them see their greatest challenge and opportunity in driving organizational change. These individuals will be able to help organizations not be forced to do data governance, but adopt better data management strategies because they see the value in doing so.
CDOs aren't the only solution retailers will need to consider to maximize their data assets, but they're a big step in the right direction.
The ownership and leadership a CDO can bring to the table — with the right team and management support — can help take retailers from having little knowledge of their customers to appropriately leveraging first- and third-party information to drive a superior, personalized customer experience.
Thomas Schutz is senior vice president, general manager, Experian Data Quality, a provider of contact data management solutions.