Data. Four letters that are transforming the way we make decisions. By 2020, leaders in the data and analytics space will be making big decisions in a way that is unrecognisable from where we are today, and that's all down to the exponential access we now have to data.
However, it's fair to say we are behind the curve when it comes to making data-led decisions here in New Zealand. That's all changing though, as a greater number of international, data-driven market leaders reach our shores. Over the next few years, New Zealand companies will slingshot forward in this area, after holding back in previous years, thanks to this increasing global exposure.
So what will this process look like, and how will it transform the way organisations make decisions? Like so many things, this transformation is starting small, and will snowball as new sources of data become available, capability increases and the use of data scales up.
Starting small, scaling up
The core driver behind this shift in decision-making is the sheer amount of data that business leaders now have access to. In fact, the International Data Corporation (IDC) estimates the amount of global data doubles every two years and will reach 40 trillion gigabytes by 2020. NZ companies only have access to a tiny fraction of that data, but it's more than enough to transform their decision-making.
Clearly, the decision-maker of 2020 will have a huge wealth of data at their fingertips, from a diverse range of sources.
The challenge is to lay the foundations now so that companies have a platform to handle this incredible growth, one that is also integrated into their decision-making processes.
The other side of the coin is that our ability to make decisions can't scale in the same way that data is.
The amount of data might be doubling every two years, but our capacity to understand it isn't. This is a huge challenge, and it's going to be a driving factor behind the growth of more advanced artificial intelligence tools that overcome these problems of scale.
The end of bias?
When we are faced with a big decision, it's easy for our biases to get in the way. Our preferences, allegiances and prejudices all influence how we process information and make decisions. We can't simply shake off these cognitive biases; they are part of who we are.
This is where data comes in. The promise of advanced data analysis is that it can offset these biases that come with making decisions from the gut. At the same time, making executives aware of their biases can bring out the best of both worlds; intuitive hypothesis, validated by good analytics.
The change we will see by 2020 isn't just about data though - it will be a psychological shift. The best data analysis in the world will be useless if a CEO ignores it because they don't feel they can trust the findings. This trust is hard to develop and takes time, but it's also far more reliable in the long-run than making choices from the gut.
Letting the data do the talking
When we look to 2020, it's clear that decision-making will be far more automated and far less human than it is today. The quantity of data that companies have access to, and the number of big decisions they will have to make, is only going to keep growing. What's more, the competitive advantage this data can offer is going to have an even greater impact on market performance.
Keeping up will demand better analytical tools and greater use of technology like AI and machine learning. These tools not only remove human biases, but they provide leaders with advice and guidance that they can't get from more basic analytical tools.
Additionally, we're going to see an increasing number of small decisions that are automated, such as in Marketing Automation and User Experience.
While this sounds like science fiction, this change is already well under way. New Zealand companies aren't there yet, but we'll see some meteoric advances in coming years as they catch up with global competitors.
Once we are there though, it's safe to say that decision-making will never look the same again.
PwC Herald Talks: Big Data
• 27th July 2016
• 7am-9am, SKYCITY Theatre
• Tickets available from iTicket.co.nz