Information Culture Sets The Stage For Digitalization Success

Carsten Bange

Data discovery, advanced analytics, and data science are key parts of every digitalization initiative, but beyond all the hype around these topics, decision makers should not forget that a “data mindset” reflected in an organization’s information and decision culture is needed to succeed in any attempt to establish data-driven processes, products, or services.

Decisions based on intuition and experience are increasingly being challenged by decision-making driven by data or statistics. But there is still a long way to go until we see many fully established data-driven organizations. Among other things, companies are still exploring ways to include the collective intelligence of employees in the decision-making process. A BARC study explored the topic of information culture asking decision makers about the status quo as well as future plans for the development of information culture in companies. Findings were based on a survey of 743 people from both business and IT backgrounds working in a wide range of industry sectors across the world.

Figure 1: Companies are challenging the notion of just relying on instinctFigure 1: Companies are challenging the notion of just relying on instinct (Source: BARC Survey “Information Culture,” n = 728)

According to the study, less than 50% of respondents agree that information is highly valued for decision-making or treated as an asset in their organization today, but two-thirds believe it will be in the future. Surprisingly, only one-third of companies currently use information to identify new business opportunities and predict future trends and behavior, but most of the remaining two-thirds plan to do so in the future. It’s also alarming that 58% of respondents say their companies base at least half of their regular business decisions on gut feel or experience rather than on data and information. The most commonly cited reason is that the necessary information is not available, followed by poor quality of data.

The results clearly show that improving decision making in volatile environments depends on information technology to integrate, store, and present data to decision-makers. But even the best data management concepts, tools, and applications cannot be effective when the inherent culture of an organization prevents information from being treated as an asset and used as a valued resource. Therefore, companies that consider themselves “best-in-class” compared to others place a greater emphasis on basing decisions on data rather than gut feel, on governing their data, and on fostering collaborative/democratic decision styles more often than others to achieve an information culture that turns information into a competitive advantage.

Figure 2: Top reasons for NOT using information for decisionsFigure 2: Top reasons for NOT using information for decisions. (Source: BARC Survey “Information Culture,” n = 712)

In light of the fact that 62% of companies want to treat information as an asset in the future, it is therefore critical that they invest in data integration as well as protecting the quality and value of that asset. In order to unlock the potential of the remaining data, the following needs to be done:

  • Address and improve data quality
  • Lower the cost of access to information
  • Improve the way in which information is presented
  • Make information easier to find
  • Increase the speed at which information is made available
  • Raise awareness of business intelligence at senior management levels
  • Foster a collaborative style of decision making

And who is in charge of driving the evolution towards becoming a data-driven company and holding data in higher esteem? Well, today the finance department is cited by 60% of respondents as playing a prominent role in data management and governance. 41% say that IT departments manage and govern data although only 10% state that the IT department alone is responsible for this. We would be concerned if the latter figure were any higher than this.

A good starting point for governing data is to define and pervasively use KPIs across the organization to achieve a common foundation for decisions, align measures of success, and focus data governance on important data. Today this is only achieved by 36% of all companies. Furthermore, the organization must be in a position where data for decision-making is sourced from an increasing number of internal and external—as well as transactional and non-transactional (big data)—sources. To better govern the data and systems involved in decision making, it is equally important to build an agile IT architecture as well as processes and organizational bodies to drive cross-departmental alignment for data governance and other BI-related tasks. BI Competency Centers (BICCs) or BI Centers of Excellence (BI CoEs) can play a key role in improving cross-departmental alignment for data governance and information culture in general.

Participation and collaboration pave the way for using data as a competitive advantage

And finally, there need to be more opportunities to allow people to collaborate and make decisions themselves. Top down is currently the dominant style of decision making, with 39% of companies employing it, followed by 34% of organizations run by management committees, and only 18% making decisions in a democratic or collaborative fashion. This stands in clear contrast to the impression of 69% of respondents who think their company would perform better with a greater level of participation and collaboration.

From our experience, the more collaborative the decision-making approach, the more likely people are to classify their company as “best-in-class.” On the flip side, respondents from companies with a predominantly top-down culture feel they are lagging behind the competition in using data for competitive advantage.

We therefore urge organizations to immediately look into ways to change their decision culture and improve collaboration. They need to move from top down to a more democratic style of decision-making to increase participation and collaboration. In particular, increasing collaboration in data analysis and planning processes are key areas for improvement. Companies should add software-based approaches to traditional methods of collaboration, such as in-person meetings and conference calls, and use BI and data discovery tools to improve collaboration in decision making.

Turning these general goals into practice will set organizations on the route to unlocking the potential of collective intelligence and achieving the information culture required to address one of the key challenges in business today: turning information into a competitive advantage.

About the survey:

The BARC research report “Information Culture – Leveraging the power of collective intelligence for better decision making” is available for free download here.


Carsten Bange

About Carsten Bange

Dr. Carsten Bange is founder and managing director of the Business Application Research Center (BARC), an IT market analysis and consulting group he founded in 1999 and later merged with Le CXP and PAC to form CXP Group, the largest European IT analyst group. Carsten holds a PhD in management information systems, is a frequent speaker at IT conferences and seminars and has served as an analyst and management consultant on business intelligence, data management and digitalization strategy, organization, architecture and technology selection for over 20 years. He can be reached at cbange@barc-research.com.