D&A a strategic priority for senior Asia Pacific executives: KPMG
Customers must be at the heart of D&A; more can be done to strengthen D&A culture

Data & Analytics (D&A) is increasingly viewed by senior executives in the Asia Pacific as a top priority, with 74 percent of respondents in the latest KPMG survey indicating that the area is crucial or very important to their business.

Yet, while almost three-quarters of all organizations surveyed across the region said they have been using D&A for more than five years, many still equate D&A to management information, failing to take full advantage of the benefits data analytics can offer.

Titled "A single view: Putting customers at the heart of your D&A strategy", the survey highlights findings from more than 210 senior executives across five countries: China, Australia, Indonesia, Singapore and the Philippines.

Tom Mouhsian, KPMG Head of Customer & Growth Practice for the ASEAN region, said: "Rapidly increasing competition has given organizations a strong incentive to assess how to leverage data to drive growth. Our research suggests that Asia Pacific businesses are focusing their D&A strategies around three main imperatives: the growth agenda, the mitigation of risks and the reduction of costs."

"For the past five years, the focus has been more on the risk side of the equation – improving reporting and compliance, for example – but organizations are now starting to recognize how D&A can contribute to their growth strategy in terms of deeper customer insights leading to greater commercial impact."

The Asia Pacific region has benefited from the rapid adoption of mobile technology and growing internet penetration, which have enabled organizations to move much closer to their customers and, in doing so, provided broad access to new and valuable customer data.

Ongoing challenges to D&A adoption
While the majority of Asia Pacific organizations may think they boast fairly mature D&A capabilities, there are still challenges to adopting a data-driven culture supported by a formal strategy.

For example, only around a quarter of all respondents were able to confirm that their organizations were executing against a formal strategy for data governance and processes.

Respondents were also more likely to say that their D&A strategy was driven by IT rather than by the business.

In particular, ASEAN respondents were less likely than their peers to rank themselves as being effective in their D&A strategies. While 83 percent of respondents from Australia and China respectively ranked their companies as effective at leveraging analytics, only 63 percent of ASEAN respondents ranked themselves as such.

Key challenges for D&A in ASEAN include the inability to respond quickly enough to market demand, security and privacy, as well as the lack of appropriate tools.

"ASEAN organizations shouldn’t feel intimidated by the size of the task. In the end, if the goal is clear then the path to transformation can be formed with rightly-sized and adaptable building blocks," said Mr. Mouhsian.

D&A must benefit the consumer
The key drivers motivating organizational D&A strategies seem to reflect the relative maturity of the market.

In Australia, where markets are fairly mature and regulation high, respondents suggested their D&A strategies were primarily driven by customer-facing objectives and compliance requirements.

Respondents from China meanwhile identified drivers consistent with a market that is rapidly becoming more outward facing: improved business performance and better transparency.

ASEAN is far from being homogeneous and there are significant differences between key ASEAN markets. For instance, data from Singapore suggests that the country is starting to shift the focus of their D&A strategy towards growth-oriented drivers such as customer insight and management.

Indonesia, on the other hand, focuses on using data analytics to improve access to information while in the Philippines, D&A strategies seem to remain largely led by IT.

In terms of sector take-up, financial services and insurance reported having the most experience using D&A within their organization. Multinationals, likewise, were found to have more experience using D&A compared to their local or regional peers.

The landscape is however set to change, and the larger organizations can no longer rely on their size and scale to dominate their markets.

Mr. Mouhsian added: "Today, small yet highly-analytical organizations are emerging and quickly stealing away market-share by making better use of their data to drive real and valuable insights. It’s not about size - it’s about how well you know your customer and what you are able to deliver. The role of D&A is shifting from the traditional inward-directed static performance reporting to outward-directed value-generating insights, benefiting end-customers in daily lives."

Five steps to extracting value from D&A investments
  • Understand your company’s data consumption needs
    Before anything else happens, it is important to identify the intended purpose(s) for data in your organization. Turning Big Data into "Smart Data" is a critical aspect of the task. This quest should start with a clear understanding of who are the internal ‘consumers of data’ and what specific benefit can be created for each of them. This approach will also help build support around the organization and potentially speed up decision-making.
  • Create a sound data strategy
    Obviously, just collecting more data is going to solve many problems. Perhaps, the opposite. Therefore, having a strategy that is both tactical and practical can notably enhance the role that data can play in your business. Coupled with the previous point about understanding the various data consumption needs, data strategy should be structured so that it positively reflects the priorities of each key stakeholder, including: business units, marketing, operations, finance, technology and others.
  • Implement a robust data governance model
    To better maintain control and security of the data that is being constantly collected and utilized by the different functions in the organization, it is necessary to install a proper data governance model supported by policies and guidelines. In addition, certain types of data require more sensitive handling due to either regulatory compliance or risk management; therefore, such data inevitably requires strict governance and absolute adherence to set protocols. As a general rule, being safe is always better than being sorry. Proper data governance mechanisms can help with that.
  • Invest in D&A capabilities and training
    Regardless of whether an organization chooses to purchase new or utilize existing D&A solutions to boost its capabilities, having people who know how to work with data, and more importantly – how to make sense of it – is a major benefit. Some companies feel inclined towards employing in-house data scientists and professional statisticians to do the job. As long as doing so does not lead to creating yet another silo, it is arguably a worthwhile investment.
  • Remember the "Customer"
    While building and purposing data analytics capabilities for the future, at least an equal amount of attention should be directed towards the end customer. In other words, what value-adding benefits can your organization provide to your customers through intelligent use of insights gathered through Big Data? The "Smart Data" approach should be able to generate tangible benefits both for the internal and external stakeholders, creating the ultimate win-win situation for all concerned. If the end strategy is heavily one-sided, try to figure out how to tip that balance by adding more things on the other side of the scale.
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