Paris: A report on the rising impact of Big Data on decision-making by Capgemini and Economist Intelligence Unit argues that data is now as essential to business as land, labor and capital.
"The Deciding Factor: Big Data & Decision making" reveals that nine out of ten business leaders believe data is now the fourth factor of production, as fundamental to business as land, labor and capital.
The study among over 600 C-level executives and senior management and IT leaders worldwide indicates that the use of Big Data has improved businesses' performance, on average, by 26 per cent and that the impact will grow to 41 per cent over the next 3 years.
The majority of companies (58 per cent) claim they will make a bigger investment in Big Data over the next three years.
Two-thirds of executives consider their organizations are 'data-driven', reporting that data collection and analysis underpins their firm's business strategy and day-to-day decision-making.
Leaders who base their judgement on a combination of experience and instinct are becoming increasingly rare.
Over half (54 per cent) say that management decisions based purely on intuition or experience are increasingly regarded as suspect and 65 per cent assert that more and more management decisions are based on "hard analytic information".
That figure rises to 73 per cent for the financial services sector, 75 per cent for healthcare, pharmaceuticals and biotechnology and 76 per cent for energy and natural resources companies.
The majority of executives (58 per cent) rely on unstructured data analysis including text, voice messages, images and video content while over 40 per cent say that social media data in particular has become increasingly important for decision-making.
Timeliness and quality of data remain significant issues. Although 42 per cent of executives say that data analysis has slowed down decision-making, the vast majority (85 per cent) believe that the growing volume of data isn't the main challenge, but rather being able to analyze and act on it in real-time.
As organizations increasingly look to the output from analytics to automate decision making, data quality is seen as a major hurdle to this with two-thirds (67 per cent) claiming they struggle with data inaccuracy on a daily basis.
"The exploitation of Big Data fuels a step change in the quality of business decision-making," said Paul Nannetti, Global Sales and Portfolio Director, Capgemini.
"But it's not only through harnessing the many new sources of data that organisations can obtain competitive advantage. It's the ability to quickly and efficiently analyze that data to optimize processes and decision making in real time that adds the greatest value. In this way, genuinely data-driven companies are able to monitor customer behaviours and market conditions with greater certainty, and react with speed and effectiveness to differentiate from competition."
An important challenge for companies wanting to make the most of Big Data is the barrier of organizational silos (56 per cent). The shift from departmental to business process silos is preventing the sharing and integration of data and a holistic overview of data management.
However the most challenging issue is the shortage of talent claimed by half (51 per cent) of respondents.
The gap between the demand and supply of qualified data analysts was perceived highest for retail and consumer goods companies. Two-thirds of respondents from these sectors cite access to talent as the toughest obstacle to data-driven decision making.