Is Your Business Ready for the Coming Decade of Data?
July 15, 2021
Is Your Business Ready for the Coming Decade of Data?
Organizations that harness the wave of post-pandemic data will emerge stronger, according to the 2021 FTI Consulting Resilience Barometer.
The impact of the pandemic on world commerce and society has yet to play through. However, it is clear that the pandemic has transformed how we work, learn, consume and communicate. As companies continue to adapt to the new reality, organizational transformation and digital adoption are rapidly accelerating.
In Brief: The 2021 FTI Consulting Barometer provides insightful thinking into the challenges facing business leaders today through a survey of more than 2,700 large G20 companies employing 46 million people.
Within this context, the growth of cloud computing, connected devices, the internet and social media messaging services is fueling an explosion of consumer data. The way in which businesses leverage this data is having a profound impact on their organizational resilience and ability to create and protect value. Businesses are building new connections to their employees, customers, investors and stakeholders.
Emerging data ecosystems are creating opportunities for organizations across all industries. But along with opportunity come new risks. And for established institutions grappling with legacy technologies, managing all that data is a major strategic challenge. Many are struggling with the increased complexity and challenges of data collection and analysis, and privacy readiness.
In February of this year, FTI Consulting published its latest Resilience Barometer, which includes the views of 2,185 decision makers in large companies across all G20 nations. The goal was to understand the impact of the pandemic on their businesses, learn their vulnerabilities, and discover their strategic approaches toward investing in resiliency.
The methodology tested resilience across seven distinct “levers” that leaders need to have their hands on if they want to build greater resiliency and navigate today’s disrupted market:
- Escalation Planning & Response
- Remediation & Dispute Resolution
- Government & Stakeholder Relations
- Economic Impact & Sustainability
- Business Model & Workforce Transformation
- Operational & Financial Resilience
- Digital Trust & Ecosystems
Not surprisingly, the responses reflect that data is a critical enabler in each of the seven resilience levers. Now, as we emerge from the pandemic and new data becomes available or connected, unique opportunities to harness the power of that data present themselves to businesses.
What follows is a brief look at four of the resilience levers.
Remediation & Dispute Resolution
Crises expose systemic weaknesses across entire sectors, which leads to an examination of the effectiveness of existing regulations. Over 3 in 4 G20 companies expect to see an increase in regulations by the end of 2022 as a result of COVID-19. Many companies will leverage technologies like AI and analytics to better navigate the regulatory landscape and manage costs, even as data privacy and compliance challenges continue to be a concern.
Among the G20 companies surveyed, 78 percent report they are already using AI and analytics to monitor scenarios involving risk and compliance. However, 65 percent struggle to deal with the volume of regulatory alerts since the COVID-19 outbreak.
A forward-looking solution requires continued investment and refinements to deal with ever-expanding data sets. Looking ahead, investigations experts will need to prioritize innovation in data analytics and data science as a critical component of delivery models.
Business Model & Workforce Transformation
Among large G20 companies, 78 percent said the pandemic caused them to realize their business models needed to change fundamentally. In this context, digital transformation has become critical and has risen on boardroom agendas across all industries.
Accordingly, 80 percent of G20 companies continued to invest in digitization during the pandemic despite cost pressures. These investments aim to improve the ever-changing customer experience and automate work processes to reduce operating cost structures. With greater digitization comes refined data that can be harnessed in day-to-day operations and improve decision-making at the board level.
Operational & Financial Resilience
As the pandemic subsides, organizations need to look beyond the short term and ask themselves how their businesses will function in the coming years. Will their operating models still be relevant five, ten years from now? Where is the organization best positioned to succeed? How will it get there?
Real-time and predictive analytics offer leaders insight into what the future may hold. Leaders should fully assess their options to make decisions that position their businesses for long-term viability. For 76 percent of those surveyed, that means further automation and digitalization to increase financial resilience and improve efficiency.
Digital Trust & Ecosystems
The shift to remote working and reliance on videoconferencing and instant messaging platforms at the start of the pandemic are having a profound impact on employer-employee relations. Concurrently comes a rise in cybersecurity risks such as privacy, data security and transparency. As a result, 93 percent of G20 companies say the pandemic has forced them to be more agile in using predictive analytics.
All that exposure means organizations are at greater risk of cyberattack from nation states, organized criminal groups and terrorists. A full 60 percent of business leaders said they are concerned by the prospect of nation state cyberattacks in 2021.
Putting in place a data governance strategy and constantly monitoring data have become key to enabling and safely supporting the accelerating pace of digitalization.
The Risk and Reward of a Digital Future
Data has been — and will continue to be — a key facet of business resilience. Proactive decision-making simply works best when it is grounded in real-time data analytics. Our survey showed that three-quarters of G20 companies use artificial intelligence and analytics to monitor risk scenarios, for instance.
But for all its value, data also presents major issues for organizations to consider.
As noted earlier, the pandemic induced a massive migration to remote working environments. This forced many companies to rapidly adopt and integrate new technologies while trying to make sense of new data. It also left these companies vulnerable to malicious cyber threats. Three in four (75%) of the companies surveyed were impacted by a cyberattack in the past 12 months. From a fiscal perspective, roughly $18 billion of lost revenue in 2020 could be attributed to cyberattacks alone.
It is a harsh reminder of the due diligence that is needed before companies look to data as a silver bullet. Consider the business leader who has been tasked with improving their organization’s operational and financial resilience. As stakeholders shape long-term strategies, business leaders may be inclined to suggest cloud and machine learning capabilities for growth. That may sound great, but how familiar is the organization with its own data, as well as the numerous ecosystems it is interacting with? Do they know who owns it? Who monetizes it? Who protects it?
Business leaders will need to answer these questions if they want to stay competitive and thrive in the coming years. Fortunately, with responsible and purpose-driven data, companies can find new ways to foster resilience and prepare themselves for whatever the future may hold.
© Copyright 2021. The views expressed herein are those of the author(s) and not necessarily the views of FTI Consulting, Inc., its management, its subsidiaries, its affiliates, or its other professionals.
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