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The importance of analytics has been brought to light by the economic crisis caused by COVID-19.
That was one of the key messages from Real Business Intelligence 2020, the virtual conference hosted by consulting firm Dresner Advisory Services.
"It's time to double down on data," said Howard Dresner, founder, chief strategy officer and chief research officer of Dresner Advisory Services, who spoke on Aug. 11, the first day of the event.
With retail stores, bars and restaurants, and a host of other businesses forced to close their physical doors for months at the start of the pandemic and only allowed to open in limited capacities since, such businesses are struggling to stay afloat. Meanwhile, air travel and hotel occupancy have plummeted, and theaters and concert halls have stayed empty.
Some businesses -- mostly white-collar firms at which most work was already done digitally -- have been able to shift to remote work and have gone on without much issue. Others have been able to change course in order to survive. Still others, however, have not been able to manage their way through the pandemic and are either struggling to survive or have already shut down.
Financial markets, as a result, plummeted at the start of the pandemic, though they have gained back the initial losses, and unemployment has skyrocketed.
Some organizations, however, are adding staff rather than cutting it. Some enterprises are looking to expand rather than contract. In fact, according to data collected by Dresner Advisory Services since the start of April, about 40% of companies responding to a survey are hiring new employees.
And it's because they understand the importance of analytics, and their analytics are telling them that there are growth opportunities despite the overall economic downturn.
Howard DresnerFounder, chief strategy officer and chief research officer, Dresner Advisory Services
"This is a wake-up call," Dresner said. "This is a wake-up call to your management team to step back and look at how to do a better job, because there will be another disruptive event in the future. A lot of organizations have told me that as a result of the coronavirus and the pandemic there is even more emphasis on data and analytics and business intelligence than ever before."
Enterprises, he added, need to have a better understanding of what's happening both inside and outside their organizations in order to survive and thrive.
At the heart of employing analytics to navigate the pandemic is developing an organizational culture that understands and values the importance of analytics.
One of the keys to that is data literacy.
Most organizations, according to data collected by Dresner Advisory Services, don't have data literacy programs in place. Nevertheless, more than 75% report at least a moderate level of data literacy among their employees, and among those at which data literacy is valued, BI initiatives tend to have high levels of success.
"Our research shows a correlation between data literacy levels and data-driven decision-making," said Elizabeth Espinoza, research director at Dresner. "Data literacy enables that data-driven decision-making."
Those organizations with high data literacy levels, she added, report that 75% of their decisions are data-driven, while just 42% of decisions are data-driven at other organizations.
A data governance policy is another key part of developing a culture that understands the importance of analytics.
Data governance develops the trust that's needed to make data-driven decisions.
According to the firm's research, 80% of organizations think it's important to have faith in their data and are buying in to their data governance policies. Meanwhile, there's a strong correlation between the success of BI projects and confidence in the quality of that data.
Still another important part of creating a culture that understands the importance of analytics is the presence of a chief analytics officer or chief data officer.
Ultimately, however, the return on investment in BI projects that organizations report provides the evidence of the importance of analytics.
Data collected by Dresner shows that 13% of respondents report an ROI of 24% or higher and an additional 64% of respondents report an ROI of at least 3%.
"There's a massive majority of people who have found that their investments pay for themselves and only a tiny fraction where people have had some calamity and it's not working out well," said Chris von Simson, research director at Dresner. "For the most part, if you've got a lot of BI going on, you're going to have some risky bets but you're going to have some big, positive bets."
That, von Simson added, means data should be present at every meeting and help drive every decision.
And that's never been truer than now during the pandemic, according to Howard Dresner.
"You should be investing strategically in this notion of data-driven decision-making," he said. "The pandemic has been very disruptive. We wish it didn't happen, that's for sure. A lot has been lost at so many levels. But it does serve as that wake-up call for organizations to take a hard look at how they're leveraging data so they can do a better job."