Almost three-quarters (70%) of companies struggle to unlock the value of their data. This has a direct impact on their ability to innovate, say 100 C-level executives from Forbes Top 2000 companies in Europe, including some from the Benelux.
Nearly a third (30%) of business leaders say cost reduction is their top goal. But now that a recession is looming, it makes sense to make better use of data, because it can help innovation in the short and long term. Furthermore, 59% of respondents believe that companies that make decisions based on data gain market share. And 58% are afraid of falling behind the competition if they don’t make better use of their data. It shows that if companies cannot innovate, it will be difficult to compete against the competition.
If companies are unable to quickly translate ideas into new products, services and strategies, they risk failure. First discussed in Bayes Business School and VMware’s 2018 report, Innovating in the Exponential Economy, this gap between innovation and execution has widened as businesses increasingly grapple with (their) data.
Looking at companies’ top seven strategic goals, according to the business leaders surveyed, four of them require accurate, relevant and timely data over the next two years to aid decision-making – from workforce insight and productivity to improving the customer experience. 52 percent motivate their teams to be more innovative and find new ways to market products, services and strategies.
“Most companies do not lack good ideas. But despite progress in executing their ideas, the gap between innovation and execution has persisted. This is due to a lack of digital capabilities and skills, rigid infrastructures and various limitations and risks associated with data sovereignty and compliance,” says Professor Feng LI, Chair of Information Management at Bayes Business School in the City, University of London. He wrote the foreword to VMware’s new Innovation-Execution report, a follow-up to the original report from 2018. “Respondents said that having too much data and having trouble accessing the right data are major barriers. In addition, the current technology stack of many companies prevents them from working even more data-driven, resulting in companies missing out on strategic opportunities.”
The barriers to data-driven innovation success
Business leaders cite a number of barriers to data, namely that companies have too much data (83%), that it is difficult to access the right data (74%) and that there are technological limitations (60%). Data sovereignty, where stored or collected data is subject to the privacy laws and governance structures of a country, sector or company, is also a major concern: national (76%) and industry (67%) guidelines are significant barriers to realizing the value of data.
Joe Baguley, VP & CTO EMEA at VMware, said: “Innovation cannot be delayed, especially when the economy worsens. It is in the DNA of a company and you need the time, the right culture, the right processes and the right technology to run it and make it succeed. It’s not a nice-to-have, it creates competitive advantage, allows companies to hire and retain new employees, and it also creates shared value. Any transformation, whether large organizational changes or identifying ways to reduce costs and optimize processes need a digital infrastructure that can support informed decision-making. Data does this. If business leaders can better use their data to make decisions and improve data literacy for everyone in the organizations, they will overcome challenges such as data sovereignty limitations, and will be better able to reap real business benefits from es investments in innovation.”
Bridging the gap between innovation and execution
Companies that know that data is hampering their ability to innovate and want to address it should focus on people, process and technology to bridge the gap between ideas and tangible impact. And when this connection is made, companies can not only extract value from their data, but use it to become even more innovative: 64% use AI and machine learning to drive innovation.
“The companies that do this right and at the right time will increase their market presence and market share,” said a senior physician for a Swiss healthcare organization interviewed for this study. “They will be in a better position ahead of their competitors. Improving data quality and managing data well, while respecting customer privacy, improves the company’s reputation and increases revenue. In addition, if companies comply with all regulatory standards set by authorities, they can innovate by using the available data and gaining a competitive advantage.”
Download the report here: https://www.vmware.com/learn/innovation-execution-report-chapter-2.html
About the research
VMware commissioned Coleman Parkes to survey 100 non-technical C-suite business leaders and interview 12 non-technical C-suite business leaders in the UK, Scandinavia, France, Benelux, Italy, Germany and Spain. They are employed by Forbes Top 2000 companies. The fieldwork was completed between May and June 2022.