Insights from 1,000+Data Leaders:Companies Fail toMaximize Data Value


Are data products the key to bridging the gap
between business decision makers and IT?

It is evident that businesses recognize the potential of their data, yet they often overestimate their utilization and expertise in this field. But still: Many fail to leverage the full potential of their data. We see data products as the key to articulate data value to the business and enable a less-technical audience to make more use of their data.

Executive summary:

Data is central to the success and global competitiveness of businesses: It enables informed decisions, optimizes processes and drives innovation. At the same time, data is the key to making sensible and efficient use of future technologies such as AI, GenAI, business intelligence and process mining.

In Germany, most companies believe they are well positioned when it comes to handling their data. A recent survey of more than 1,000 business decision makers and IT managers in Germany, conducted by One Data, shows 77 % of respondents believe they are successful or very successful in using their data to make decisions and improve efficiency.

However, there is a significant gap between this positive self-assessment and reality. According to a recent Bitkom study, only 6% of German companies are exploiting the potential of their data.

It shows: The strategic and economic potential of data continues to be underestimated. This is reflected in various challenges in data management and inhibits growth potential.

A disconnect between data potentialand business outcomes

A recent study of over 1,000 IT decision-makers and C-level executives in Germany revealed a major gap between how companies perceive their use of data and the actual value they derive. While this study shows 77% of organizations believe they are using data successfully, a previous Bitkom study has shown that only 6% are fully maximizing their data’s potential.

This can become a major problem in several ways:

Those who already rate themselves very highly do not see the need to improve further. It can also be concluded that decision-makers are not familiar with the actual data situation in their organization, which could affect their future decision-making ability.

So, do companies need a data reality check?

Study shows gap between business and IT

Data utilization gaps in key business areas

According to the respondents, the utilization and preparation of data has improved business processes mainly in the areas of marketing and sales (40%) and customer service (43%) in particular.

So, what we’re seeing is that while departments like marketing and customer service have started leveraging data, other key areas—such as supply chain and production—are underutilized.

These areas hold enormous potential for improving operational efficiency, reducing costs, and enhancing sustainability. For instance, optimizing the supply chain using historical data can lead to more accurate demand forecasting, reduced inventory costs, and minimized waste.

The question remains: If most companies see the huge potential of leveraging their data, why don’t they use it more extensively?

Let’s look at some roadblocks.

Data quality and governance:Persistent barriers to success

The biggest roadblock preventing companies from fully leveraging data is poor data quality. According to the study, 59% of businesses struggle with this issue. Other challenges include technical complexity (55%) and data privacy concerns (54%).

Only 17% of organizations employ a Chief Data Officer (CDO) to oversee the data governance strategy, further complicating efforts to improve data quality and foster collaboration between IT and business.

The study also shows a significant divide between IT leaders and executives: 81% of IT decision-makers view data as crucial for success, while only 73% of C-level executives agree. In fact, 22% of executives even consider data irrelevant to their role, indicating a lack of alignment at the leadership level that hinders the success of data initiatives.

So, what can we do to bring them together?

Data products and Data Mesh:Turning data into measurable value

To overcome the common data challenges identified in the study, companies need to shift their approach to data management. Data products—particularly when deployed in a Data Mesh architecture—offer a scalable, flexible solution that allows businesses to solve critical challenges and unlock the full value of their data.

What are data products?

Data products are reusable, packaged data sets designed to meet specific business needs. Instead of treating data as a byproduct of operations, businesses manage data as a valuable product that is reliable, consistent, and easily accessible. By using data products, organizations can turn raw data into actionable insights, empowering every department to make data-driven decisions.

This approach leads to:

  • more efficient data usage
  • reduces redundancy, and
  • improves collaboration across teams.

The result? Data becomes more reliable and easier to use for a broader audience. This leads to significant enhancements in data-led decision-making across all departments. Insights gained from data products effect the company’s bottom line, e.g. through improved supply chains, faster R&D cycles, and more accurate forecasts.

More about data products →

Data Mesh: Decentralizing data management for greater agility

Data Mesh architecture can complement data products by decentralizing data ownership and management. In a Data Mesh, teams across the organization manage their own data domains, ensuring their data products are high-quality and available to others. This approach eliminates data silos, enhances cross-departmental collaboration, and makes organizations more agile in responding to changing business conditions.

Nevertheless, shifting towards a Data Mesh approach is not a must for working with data products!

More about Data Mesh →

Making data initiatives visible:Measuring the impact with data products

One of the biggest challenges data leaders face today is articulating the measurable impact of their data initiatives to business decision-makers. To communicate data value effectively, they need to present real numbers on how they helped improve the company’s bottom line. Without clear metrics and demonstrable outcomes, it’s difficult to justify the investments required for data projects.

For many companies, the value of their data initiatives remains unclear, making it difficult to justify further investment or gain leadership support. To change this, data leaders must ensure that every data initiative has measurable outcomes tied to business goals.

Data products offer an effective solution by making the results of data-driven initiatives visible and measurable. Tools like One Data empower users with features to track and trace data product goals and value.

With data products, businesses can clearly link data-driven efforts to key performance indicators (KPIs) and financial metrics.

Here’s how data products make the impact of data initiatives more visible:

  • Clear business metrics: Data products are designed to address specific business challenges, making it easy to define and track metrics such as increased revenue, reduced costs, or improved customer satisfaction.
  • Real-time dashboards and reports: With data products, insights can be delivered through real-time dashboards and automated reports, providing ongoing visibility into the performance of data initiatives.
  • Cross-departmental collaboration: Data products are reusable and sharable across teams, allowing the entire organization to benefit from a single data initiative. This increases their impact and ensures consistency in decision-making.
  • ROI calculation: By isolating the benefits of each data product, organizations can calculate the return on investment (ROI) of their data initiatives, making it easier to justify continued investment.

As stated before, only 17% of all respondents reported that a Chief Data Officer is responsible for the quality and timeliness of their data. This is another part where data products can come in handy: They help organizations distribute responsibility for data—therefore for quality and timeliness—to the dedicated specialist departments. This could compensate for the lack of a CDO for companies in the future.

Example: Optimizing the supply chain with data product

Consider the example of supply chain optimization. While only 21% of companies are fully leveraging data in this area, those that do can realize significant value. A supply chain data product could help reduce inventory by 10%, cut storage costs by 15%, and minimize stockouts by 20%. These measurable results provide clear evidence of the impact of data products and justify further investment in data-driven initiatives.

Conclusion: Data products as the futureof data-driven business

The study reveals a significant gap between how businesses perceive their data capabilities and the measurable value they derive from data initiatives. Data products offer a clear path forward. By improving data quality, reducing complexity, and providing measurable business outcomes, data products enable organizations to fully leverage their data assets and drive long-term business success.

By making the impact of data initiatives visible and measurable, data products empower data leaders to gain executive buy-in, ensure continued investment, and position their organizations for future growth. In today’s competitive market, those that embrace data products and Data Mesh will be best equipped to lead the way in data-driven innovation.

Methodology:
The data used is based on an online survey conducted by YouGov Deutschland GmbH on behalf of One Data from 22 July to 31 July 2024. The survey asked 748 IT decision-makers and 319 C-level managers in Germany about the perception and use of data in their companies.

Author:

Andreas Böhm One Data

Dr. Andreas BöhmFounder and Managing Director, One Data

Dr. Andreas Böhm graduated from the University of Passau with a degree in business administration in 2008 and went on to gain project and consulting experience at Accenture and Volkswagen. Early on, he recognized the huge potential of combining statistical methods and IT solutions, and founded his first company in 2009. Dr Böhm was then awarded a PhD in statistics from the University of Passau. He founded One Data GmbH in April 2013, bringing his vision of harnessing the potential of efficiency in data to life.

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