Data analytics can deliver valuable insights and has become more important for reaching business decisions in almost all industries. But many organizations face a huge hurdle to winning those benefits: lack of trust in data and analytics (D&A).
Almost 60% of CEOs say they lack a high level of trust in their data and analytics accuracy, new research reveals. Nearly half of respondents surveyed say their C-level executives do not fully support their organization’s data and analytics strategy, according to the KPMG report Building Trust in Analytics.
Many businesses use data analytics to analyze existing customers (50%), find new customers (48%) and develop new products and services (47%), according to the survey of 2,165 respondents from 10 countries. However, many executives say they are not managing their data analytics processes effectively.
A Lack of Confidence in Data Insights
The research also reveals that:
Only 10% believe they excel in managing the quality of D&A.
Just 13% say they excel in the privacy and ethical use of D&A
Only 16% believe they perform well in ensuring the accuracy of models they produce.
“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 Rast, global head of data and analytics and a partner at KPMG in Germany.
Low levels of trust may originate at the top and filter down through the organization, the survey data suggests. Low levels of confidence in data insights may be due to the inherent complexity of data analytics, especially in business functions that are not trained in analytics such as personnel, public relations, advertising, and other communications functions.
How to Increase Trust and Obtain Data Analytics Benefits
To increase trust in data, it’s critical to ensure the quality of underlying data, align data analytics to the organization’s goals, and apply analytics ethically.
KPMG recommends that organizations:
- Create purpose by clarifying goals and raise awareness to increase internal engagement,
- Develop an internal data analytics culture; open the ‘black box’ to encourage greater transparency,
- Have a 360-degree view by building ecosystems, and
- Stimulate innovation and analytics R&D to incubate new ideas and maintain a competitive stance.
“Transparency about the use and impact of an organization’s data and analytics is key to overcoming the long-held bias that conventional decision-making is more reliable,” states Brad Fisher, US data and analytics leader and a partner with KPMG in the U.S. “We need to take D&A out of the ‘black box’ to encourage greater understanding about its use and purpose to help organizations trust the new insights it can bring.”
“Getting analytics right is imperative, not just so executives can sleep well at night knowing their KPIs are accurate, but because analytics are impacting our daily lives more and more each day,” says Alex Woodie, editor in chief at Datanami. “If data and analytics are to deliver the life-changing impacts that it promises to deliver, the analytics folks need to get the details right.”
Bottom Line: Lack of trust of data analytics at the senior executive level is a major obstacle to unlocking their valuable benefits. Organizations can increase trust through high-quality data, connecting analytics to the organization’s real-world goals, and opening the “black box” of complexity.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
