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90% of data is in the dark. How can we shine a light on it?

We’re producing more data than ever before, and much of it is being captured by businesses. But why is 90% of it left in the dark? How can we shine a light on it?

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"90% of all captured data becomes dark data – which means companies aren’t analysing or using it."

2.5 quintillion bytes. That’s how much data we’re producing every day, and it’s set to grow due to the rise of the Internet of Things. This huge volume of data gives businesses the opportunity to capture and analyse unprecedented amounts of information – which, if managed and interpreted properly, can eliminate guesswork and assumptions and inform the decision-making process.

But many businesses are not making the most of their data. According to research company IDC, 90% of all captured data becomes dark data – which means companies aren’t analysing or using it.

The challenges around comprehensive data analysis

There are various reasons why the majority of data is in the dark. Many organisations have disparate and unintegrated systems, which means it takes a lot of time and expense to extract, clean and standardise data before any analysis can be performed. They also need to have the relevant expertise in place to suitably interpret the information.

Then there’s the challenge of trying to connect the data to business strategy. Without the right experts to guide them, organisations may find themselves overwhelmed by the increasing volume of information gathered, and struggle to extract useful insights.

Autumn Budget: spending spree doesn't disguise £2tn challenge ahead for the UK economy.

The Autumn Budget has brought home the fiscal and economic challenges facing the UK

How a closer look at data can benefit businesses

While big tech companies are seen as natural leaders in the way they use data, other sectors are quickly learning to capitalise on the wealth of information they have.

Beverage giant PepsiCo is looking at vast amounts of data gathered every day through social media and sales platforms to predict future demand. Airlines use data to determine profitable new routes, film and food preferences, while manufacturers rely on it to predict and schedule maintenance work. Even small businesses are getting in on the action – one company changed its opening hours based on the data captured via sensors that measured consumer footfall.

It’s clear that the race to harness data in new, innovative ways is now well under way, and it’s one that businesses cannot afford to lag behind in.

“As more organisations use data to improve their services and operations, those that don’t will find themselves at a growing competitive disadvantage,” warns Kirstin Gillon, ICAEW’s Technical IT Manager.

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"This is where experts like chartered accountants would be a valuable asset as they possess in-depth knowledge of the company and are focused on data quality."

Four tips to help your businesses do more with data

Start with a business question

What do you need to know about your customers, your business risks or new opportunities in the market? These questions will help you determine what data you need to meet your business strategy.

Go broad

Don’t just look into your internal data; go wide and analyse external data, and think about where you can capture more information about specific behaviours or activities. This way, you can build a more comprehensive picture.

Get the right skills

Having a mix of the right skills is essential if you want to make the most of your data. You’ll need IT, data and statistics skills; but you will also require people with good business understanding, who can ask the right questions and interpret the results.

This is where experts like chartered accountants would be a valuable asset as they possess in-depth knowledge of the company and are focused on data quality – which means they can work effectively with data analysts to derive greater value from data.

Creating a culture that prizes data

Businesses still tend to place technology and data in an isolated “box”. By neglecting to embed these two key elements in your decision-making process, you are putting yourself at a disadvantage. As a mix of skills is essential for robust data analysis, there needs to be a collaborative culture, with cross-departmental working as the norm. As such, there needs to be a top-down commitment to the value of data in order to drive a wider organisational transformation.

As leaders in accounting, finance and business, ICAEW focuses on ethics, technology and innovative thinking to help organisations and professionals thrive in the face of change. So together, we can achieve more than you’d imagine.

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