70% of European companies do not know how to use their data to innovate
A new VMware study highlights the challenges of balancing innovation and cost reduction.
Computing Magazine - Editorial team
July 26, 2022
70% of businesses struggle to make the most of their data, which directly impacts their ability to innovate, according to a new VMware study involving 100 European executives from Forbes Top 2000 companies.
Nearly one-third (30%) of business leaders cite cost reduction as their top strategic objective, but with the threat of recession looming, optimizing data usage could slow innovation in the short and long term. 59% percent believe that organizations that prioritize data-driven decision making are increasing their market share, while 58% fear being overtaken by competitors if they don't make better use of their data, highlighting how the inability to innovate could diminish the competitiveness of many businesses. The inability to turn ideas into new products, services and strategies in a timely manner puts organizations at risk of failure. This gap between innovation and execution has been exacerbated by companies' difficulties in coping with the volume of data.
59% of business leaders believe that companies that prioritize data-driven decision making are increasing their market share.
Four of the seven strategic business objectives for the next two years require accurate, relevant and timely data to inform decision making, from workforce insights and productivity to improving the customer experience, according to surveyed leaders. 52% offer incentives to their teams to encourage innovation and find new ways to bring products, services and strategies to market.
"Most companies are not short of good ideas. But despite progress in executing their ideas, the gap between innovation and execution has persisted due to a lack of digital capabilities and skills, rigid infrastructures, and various risks and limits associated with that of data," says Professor Feng Li, head of information management at Bayes Business School, part of the University of London, and author of the foreword to the new VMware report. "Interestingly, having too much data and problems accessing it have been cited as the biggest barriers, and the complex technology infrastructure of many organizations prevents data-driven models from being adopted, resulting in missed opportunities."
Barriers to innovation success
Barriers identified by business leaders include organizations' data overload, cited by 83%; difficulty accessing data (74%) and technological barrier (60%). Data sovereignty, where data stored or collected is subject to privacy laws and governance structures within a state, industry sector or organization, is also a top concern. Thus, national (76%) and industry (67%) data sovereignty are perceived by executives as substantial barriers to extracting value from data.
Organizations trying to address how data is hindering their innovation efforts are advised to put the focus on people, process and technology to bridge the gap between ideas and tangible impact. And when that connection is made organizations can not only realize the value of data, but also use it to unlock greater levels of innovation: 64% rely on Artificial Intelligence and Machine Learning to do so.