This article first appeared in Forum, The Edge Malaysia Weekly, on February 22 - 28, 2016.

In the past few months, we met top-level, C-suite executives around the world to learn more about the challenges, opportunities and behavioural and social impact of running a business in a digital world. When the conversations turned to data and analytics, we started to uncover some trends that go way beyond the usual suspects of trends related to the volume, speed and variety of data, and what to do with it.

The following are some trends that we believe will — and deserve to — capture more attention this year.

A shift to ‘the human element of analytics’

In other words, analytics is not just a technology and data issue. Businesses are realising that their focus needs to expand to what we call “the human element of analytics”. At the heart of the issue is this: while many companies have increased their capacity to “produce” analytics-driven insights — such as customer preferences, operational improvements and risk identification — many are still not seeing returns on their analytics investments. Why? Because, ultimately, value is realised when people make different decisions and change business processes. A company’s culture, organisational processes, skills of the business “users” and incentives must all be considered and are part of the equation to “consume” analytics throughout the organisation.

Unfortunately, despite massive spending on technology and tools, not nearly enough focus has been put on end users, or the “consumers” of the analytics, such as doctors, marketing professionals, factory workers, customer service representatives or financial professionals. In fact, a recent EY/Forbes Insight study, entitled “Analytics: Don’t Forget the Human Element”, highlights ways to overcome the obstacles to making analytics more actionable and examines what leaders are doing most effectively to achieve analytics excellence. Clearly, there is work to be done here — 89% of the organisations that participated in the study said change management is a barrier to realising analytics value. This is the year when many organisations will shift their emphasis from analytics “production” to analytics “consumption”.

Rising demand from consumers who want something in return for sharing their data

Millions of people worldwide use mobile devices and data-driven services to research, shop, bank, socialise and more. Companies collect information and deliver personalised services based on the data they have amassed. But there’s a risk of dramatic change in consumer behaviour based on their trust in how their data is being used. For example, one EY survey of 2,000 customers and almost 750 senior business executives in the UK indicates that consumers are becoming less willing to share their personal information (“The Data Revolt”). Almost half said they would restrict access by 2018.

And regulatory changes have already arrived. For example, the European Parliament recently cemented the strong support previously given at the committee level to the European Commission’s data protection reform that ensures people have more effective control over their personal data. In fact, under the new law, companies must get customers’ consent to collect and process their personal data — or face fines of up to 4% of annual revenue if they neglect to do so. As the regulatory environment shifts and consumers become more sensitive about the use of their data, businesses we are talking to are increasingly moving beyond what they can do (within a legal framework) to what they should do (within a “value exchange” framework) with consumer data. Some companies are piloting or considering giving customers discounted pricing on products and services or other incentives based on the information they are willing to share and permit companies to use. We believe we are on the cusp of a new state of sophistication in how companies share value with consumers based on various data-sharing and permission frameworks. As the year unfolds, we’ll see this discussion accelerate. Some companies will get it right while others will unintentionally stub their toes.

More companies will press the ‘reset button’ on analytics

Most businesses agree that analytics has become crucial to success. But for many companies, analytics programmes have not succeeded as planned. Those programmes failed to deliver on return on investment. Evidence of this can be found in the aforementioned EY/Forbes Insight study:

• Percentage of organisations that agree big data and analytics are changing the nature of competitive advantage: 78%;

• Percentage of organisations that are investing US$5 million and more in analytics: 66%; and

• Percentage of organisations that describe their analytics maturity as leading: 12%.

Companies often struggle to deal with new, disruptive technologies like analytics. That is why it is called disruption. For the CEO, one key question that will be revisited by many in 2016 is, “Who should be responsible for managing and leading the company’s analytics programme?” At the heart of answering this question will be the increasing recognition that firms need a business strategy that has analytics at the core rather than just an analytics strategy to make marginal improvements to existing operations.

The CEO’s challenge is to assign ownership to an executive who demonstrates two important qualities: first, the ability to envision future-state business models and second, the ability to influence others. The first attribute will enable the executive to act as an architect. Without this guidance, the company will lack focus and underplay the possibilities. The latter attribute is arguably the most important as all critical innovations will require the cooperation of numerous parts of the organisation. The analytics leader will need to accomplish two tasks: winning over those executives who lost the chance to manage the function; and establishing a basis for cooperation and sharing of success.

So look for the next wave of chief analytics officers to be given more responsibility and authority to make analytics a key source of competitive differentiation.

Some final thoughts

Competitive advantage over the coming years will be based on how well companies in all industries embed analytics into their enterprise-wide business strategy. We have seen it first-hand: when a company puts analytics at its heart, seismic changes take place, and the trends we expect this year are important milestones as businesses progress in their analytics journeys.

Freddy Loo is an executive director with the advisory practice of EY Malaysia. The views expressed above are the author’s and do not necessarily represent those of the global EY organisation or its member firms.

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