Despite confidence with gut instinct, big data plays critical role in decision making & executives need to recognize this
TORONTO, Oct. 2, 2014 /CNW/ - When it comes to making big decision about their business, a majority of executives globally (94%) and in Canada (93%) say their companies are prepared to do so, but hardly a quarter of global and Canadian executives relied on data analytics when they made their last big decision. According to Gut & gigabytes: Capitalizing on the art & science in decision making, a new survey report by the Economist Intelligence Unit sponsored by PwC, 73% of Canadian executives (vs. 58% globally) went with their gut instinct (intuition or experience and the advice and experience of others) when making their last big decision.
However, nearly one in three executives globally and 50% of Canadian executives describe big decision making at their company as highly data driven. These executives are also three times as likely to report "significant" improvements in big decision making in the past two years - compared to those who are not highly data driven.
Challenges to overcome
According to the report, for 43% of Canadian respondents (35% globally), the quality, accuracy and completeness of the underlying data poses the biggest hurdle to the greater use of big data. Globally (46%) and in Canada (70%), executives were least satisfied with the timeliness of data (making it available when needed).
Just among C-suites (e.g. CEOs), 90% of Canadian respondents (52% globally) have previously discounted data they don't understand. Almost half of C-suite respondents (47%) believe that the biggest hurdle to greater use of big data is other senior executives' lack of sufficient skills or expertise.
Big decision areas over the next 12 months
Seventy per cent of Canadian executives (vs. 36% globally) said collaborating with competitors will be the number one area they expect to make a big decision next year. This is followed by decisions around growing existing business (33%), which includes M&A, entering new markets and launching new products or services. For 30% of Canadian respondents, corporate restructuring (combining business units, outsourcing, relocating HQ or production) will be top of mind.
Changes to make
Despite global executives' comfort in relying on gut instinct, big data and enhanced data analysis has already changed decision making. Sixty three per cent of global executives and 60% of Canadian executives said the use of data has changed how their company makes decisions and they expect it to have more impact in the future.
For Canadian executives, the top three aspects that need to change in their decision making process includes:
- The number of people involved in making a decision
- The time it takes to make a decision
- The use of externally sourced data
"A company's success today is tied to how good it is at making big decisions, which includes changing the speed and sophistication of the decision making process. Better decision making requires the use of newly accessible data and analytic techniques, and by integrating technology to manage the volume of information to enhance intuition and generate meaningful insights. By acknowledging the critical role big data plays in decision making, companies can confidently make future big decisions and solve business problems."
Ramy Sedra, Partner, Consulting and Deals, Data Analytics, PwC
"With rapid competitive landscape changes and exponential data growth, executives need rapid and agile access to information, so they can be responsive and make informed business decisions. There are too many internal and external variables to simply rely on instinct. By adopting a structured information discovery approach to assessing, managing and presenting data, executives can harness analytics to drive game changing impacts to their business with a speed and agility they didn't think possible."
To access the full report, visit http://www.pwc.com/ca/big-decisions-canada .
Notes to Editors:
- The report defines big decisions as the most significant decisions about the strategic direction of the business (i.e. not concerned with day-to-day operations). Big data refers to the recent wave of electronic information produced in great volume by a variety of sources. Data analysis is the use of analytical techniques to generate new insights from data.
- The EIU in May 2014 surveyed 1,135 executives, of whom 54% were C-level executives or board members.
- Respondents came from Europe (29%), North America (35%), and Asia-Pacific (24%). The remainder was from Latin America, the Middle East and Africa.
- The majority of companies reported annual revenues last year of at least US$1 billion.
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SOURCE: PwC Management Services LP
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