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Analytics Magazine

Business execs lack confidence in insights from data and analytics

Most business leaders today believe in the value of using data and analytics (D&A) throughout their organizations, 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.

For the report, “Building Trust in Analytics,” KPMG commissioned Forrester Consulting to survey 2,165 respondents from 10 countries (Australia, Brazil, China, France, Germany, India, South Africa, United Kingdom and the United States) to identify in which areas businesses are using D&A, and to what extent they lack trust in their D&A models and processes to drive decision-making and desired outcomes. The report shares insights and recommendations on suggested processes, practices and governance for building trust in D&A using KPMG’s four anchors of trust, a framework for assessing quality, effectiveness, integrity and resilience.

data and analytics

Most businesses, the survey shows, use D&A tools to analyze existing customers (50 percent), find new customers (48 percent) and to develop new products and services (47 percent). 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 generate desired outcomes,” says Christian Rats, global head of D&A, and a partner with KPMG in Germany. “Organizations 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.

“Failing to master analytics will not only make it increasingly hard for organizations to compete, but will expose their brands to new and growing risks,” Rats continues. “Seventy percent of executives believe that by using data and analytics they expose their organizations to reputational risk.”

Less than half of respondents are very confident about the insights they’re deriving from D&A in the areas of risk and security (43 percent), for customer insight (38 percent) and insights around business operations (34 percent).

“There is no doubt that subjective, gut-feel decision-making is being augmented by data-driven insights to allow organizations to better serve customers, drive efficiencies and manage risk,” says Bill Nowacki, managing director, Decision Science, KPMG in the U.S. “The survey, however, indicates executives’ level of confidence in their insights is not where it should be, given these organizations’ plans for increasing investment in and returns on D&A.”

To assess where the trust gaps may be within an organization’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.

For more, click here.

 

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