Five 2019 Big-Picture Strategic Challenges –
How forward-looking data analytics can solve them
Companies are going to need all the help they can get during 2019, a year that promises to test the mettle of any business leader.
We pinpoint five of the key strategic challenges that companies are likely to face this year and then explore how intelligent data analytics can help them navigate these.
1. Geopolitical and Economic Uncertainty
The first quarter of 2019 made it clear how unpredictable the political and macroeconomic environment is likely to be this year, with Brexit unravelling and concerns about the global economy appearing.
Here's where the power of descriptive, predictive and prescriptive data analytics comes into play, enabling businesses to navigate through what Jeroen Kraaijenbrink aptly describes as a world characterized by volatility, uncertainty, complexity and ambiguity (VUCA).
In a column for Forbes, Strategy In An Uncertain World, he says prediction always remains an important basis of strategy, even in uncertain environments. "Especially when you need to make large investments or radical changes to your organization, you want a reasonable degree of confidence before you take action."
How do decision makers achieve that degree of confidence in a fast-moving, unpredictable world? They need access to real-time data analytics that are reliable, potentially actionable and, ideally, forward-looking to enable businesses to make informed decisions quickly enough to sidestep risks or take advantage of opportunities that appear.
Data analytics unlocks the ability to predict outcomes by helping business executives understand what has happened in the company and how, based on the data at hand – and then suggesting what could happen through predictive analytics that is based on machine learning and artificial intelligence. Prescriptive analytics, meanwhile, takes it a step further and offers guidance on what to do next.
2. Lacklustre Revenue Growth
CEO's are expecting subdued revenue growth over the next 12 months to three years. This was the resounding finding of the 2019 Annual Global CEO Survey published by PwC. In a tough operating environment like this, those CEO's who have access to analytics, that can best identify revenue growth opportunities, have a much better chance of taking advantage of these by taking decisive and agile action.
Chris Gerbig, Co-Founder & President of Pink Lily, one of the fastest-growing online retailers of women's clothing in the US, in an article that explores why data and analytics are critical for growth, notes that companies that make use of data are more likely to outperform competitors in key performance metrics – including sales, sales growth, profit and return on investment.
He notes that data analytics can have a transformative effect on growth - and in the early days of a business launch, growth is the name of the game.
Meanwhile, in a 2017 Small and Mid-Sized Enterprise Business Intelligence Market Study of business intelligence in small and medium-sized enterprises, Dresner Advisory Services found that two of the top three reasons respondents were investing in analytics and business intelligence was to attain growth in revenues and to increase their competitive advantage.
The risk of cyberattacks has been a growing concern for CEOs for the past few years. With the advent of the EU's General Data Protection Regulation (GDPR), data security has become more critical because companies stand to be fined heavily for data breaches. Cyberattacks also damage company reputations and interrupt business operations.
In his article, How Big Data Helps Avoid Cybersecurity Threats, Birbahadur Singh Kathayat says, "Keeping precious business data protected against malware and hacking is one of the biggest challenges facing modern businesses. These never-ending cybersecurity threats make it extremely difficult to sustain business performance and growth."
As cyber attackers get more sophisticated and the potential damage they could inflict mounts up, companies need to put in place sophisticated data analytics systems that use machine learning and artificial intelligence to monitor, detect and predict unusual behaviour and potential breaches.
4. Staying Ahead of the Competition
With the exponential pace of innovation, competition across industries and globally has never been stiffer. For that reason, companies that want to stay ahead of the competition would benefit from investing in customised data analytics that offer descriptive (what has happened), predictive (what could happen) and, ultimately, prescriptive (what you could do) insights.
The potential offered by predictive data analytics is immense. In a white paper, Embracing Predictive Analytics, Bernard Marr, an expert on digital transformation and the intelligent use of data in business, highlighted where organizations can harness predictive analytics:
Given the tremendous strategic insights data offers, those businesses that are on the front foot when it comes to relying on data analytics to inform key business decisions will have the best shot at beating their competition.
- Predict trends and customer needs
- Optimize and automate business processes
- Improve functional decision making
5. Tapping into New Customer Bases
In a low-growth environment, companies that want to stand out from the crowd will need to target new customer bases with greater spending power.
Millennials are ripe for the picking. They comprise a quarter of the world's population and in the US represent a generation of more than 75-million potential customers – in excess of the number of baby boomers.
But with most of the companies in the world trying to win them over too, companies need to gain an edge others don't have – and this edge could be attained from data analytics that capture the active, always-on social media activities of millennials. Data analytics could monitor, identify and predict the preferences and behaviour of this target market, enabling companies to deliver what they want when they want it.
Tanvir Haque, a partner at Freshstone Consulting, sums it up neatly in his article Why Data Analytics Can Help Drive Sales For Your Business, "As a successful modern enterprise, you'll be using data-driven insights to understand your customers' needs in a rapidly evolving world, enabling you to proactively evolve your products alongside those needs."
Data analytics can offer deep, real time insights into how to overcome – and profit from - many of the strategic challenges companies are likely to come up against during the next few years.
But unlocking the potential that data can offer a company does require leadership, vision and a business-wide commitment to extracting and acting on the insights generated by that data.
Companies are much more likely to succeed if they partner with an expert that has experience, specialist skills and is forward-thinking. Contact us and we can take you through how we can tailor our full, end-to-end data science suite to support your ongoing strategic needs. Get started with Emergotech today!
April 8th, 2019 - 7 min read