Report: Customer data analysis is up, but execs still rely on intuition for strategic decisions

New EIU and PwC report finds disconnect between how Australian and global organisations are utilising data analytics to drive customer value, and how c-level executives use data to make big decisions

A new report claims four in five Australian executives are using data and analysis to optimise customer value for their organisation, even as most still rely on their intuition or peer advice to make strategic business decisions.

The Economist Intelligence Unit (EIU)’s new Gut & gigabytes: Capitalising on the art and science in decision making report, which was sponsored by PricewaterhouseCoopers, found 68 per cent of Australian executives rely on either their own intuition, or the advice and experience of others, to make big decisions. This compared with 58 per cent globally.

Only 29 per cent of global executives said data and analysis was the primary method used to make big decisions, and 30 per cent admitted their decisions were “opportunistic”. Across the board, 44 per cent of respondents are making a big decision every month, which could potentially impact their profit by $1 billion or more.

When asked why they weren’t utilising data and analysis for big decisions, 52 per cent of global c-suite executives admitted to previously discounting data they don’t understand, and 31 per cent said timeliness of data was an issue.

Yet 80 per cent of Australian respondents claimed they are using data and analysis around customer value. In contrast, just 11 per cent of US respondents said they were doing the same.

The global EIU report was based on a survey on 1135 executives in May, 54 per cent of which were c-level or board members. Twenty-four per cent of respondents came from Asia-Pacific countries including Australia.

According to PwC Australia’s data and analytics leader, John Studley, customer analytics is increasingly common at an operational level, notably in deep pockets of the marketing department for more targeted marketing campaigns, cross-sell and upsell initiatives and loyalty programs.

He also agreed several local organisations in the retail and financial services sectors are using data innovatively around customer programs.

Related: Big data analytics: The new black magic of marketing?

“But there is a disconnect when taking a more strategic view of data assets inside as well as outside the organisation,” Studley told CMO. “The operational work hasn’t reached the boardroom table when it comes to strategic decision making.

“Data assets in the organisation are not necessarily connected to each other. Getting the holistic view of the customer is step one, but step two is getting a holistic view of the market.”

Often, data didn’t exist in a format executives needed, or wasn’t geared for the type of “sprints” in decision making modern leaders have to make today, Studley said.

The surprising discrepancy between Australia and the US when it comes to customer data utilisation was also reflective of the differing level of maturity and knowledge around data analytics, Studley continued.

“In my experience, the US is well ahead of the Australian market in this [using data and analysis around customer value] – they know about this and understand the issues and challenges when addressing this,” he commented. “This could be a sign of the ‘Australian psyche’ of self-sufficiency; we could be being complacent in terms of capability, or not have faced some of the bigger issues yet.

“There are a lot of people talking about data and analytics being a big challenge, but few are getting on and doing something about it.”

There is change in the air, however. Just shy of two-thirds of global respondents said big data had changed decision making at their company, and 25 per cent were planning for it to do so.

The top three changes to big decision making cited in the report are greater use of specialised analytics tools and techniques; employing a dedicated data insights team to inform strategic decisions; and relying on enhanced data analytics.

“In reality, experience and intuition, and data and analysis, are not mutually exclusive. The challenge for business is how best to marry the two,” the report authors stated. “A ‘gut instinct’ nowadays is likely to be based on increasingly large amounts of data, while even the largest data set cannot be relied upon to make an effective big decision without human involvement.”

Top of the list of decisions for global execs in the next year are growing existing business; collaborating with competitors; shrinking existing business; entering a new industry or starting a new business; and corporate financing.

“In high-growth environments, executives have more leeway to rely on gut instinct, as the downside from a poor decision might not be so severe,” Studley claimed. “However, in environments where growth is constrained, decisions should be backed by the rigour and insights that data can provide, particularly as the margin between success and failure is that much tighter.”

As a response to the findings, EIU and PwC set out four main ways executives can better use data to improve and speed up decision making. These are: Pinpointing and prioritising the decisions that will have the most impact on the organisation’s future; simulating how industry trends will affect the business; quantifying the expected outcomes of decisions; and identifying changes to organisational processes, technology and culture that will improve how decisions are made.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Signup to CMO’s email newsletter to receive your weekly dose of targeted content for the modern marketing chief.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in