Data is a crucial resource today, fueling innovation and business development. However, we currently face a major challenge—while we have access to vast amounts of data, we struggle to understand and utilize it effectively. More than half (58%) of business leaders admit that key decisions in their companies are made based on inaccurate or inconsistent data. Nearly two-thirds (65%) believe that no one in their organization has full knowledge of the data collected or how to access it.
A new report by SoftServe, based on a study conducted by Wakefield Research, titled “The Great Data Divide,” reveals that most companies struggle with challenges related to effective data usage. The issues stem from a lack of knowledge in data management and internal discrepancies among executives regarding data utilization, acquisition, and funding within organizations.
The Costly Consequences of Poor Decision-Making
A staggering 58% of survey respondents admitted that strategic decisions in their organizations are based on inaccurate or inconsistent data. This issue is particularly prevalent among companies that have not achieved a high level of data maturity—50% of such firms regularly base their operations on faulty information.
“The benefits of leveraging the data we currently have or can obtain are enormous. At the same time, research and analysis highlight widespread skill deficits in effectively using this data. These deficits affect most companies, posing a serious threat to their competitiveness in the global market and creating barriers to growth, customer service improvement, and new revenue streams. A lack of awareness about data value among executives often leads to poor investment decisions,” says Sebastian Drzewiecki, VP, Country Manager at SoftServe Poland.
Experts highlight another critical issue. “Companies often make investment decisions regarding data and analytics technologies based on market hype and the infamous FOMO (fear of missing out). This leads to several serious problems,” comments Rodion Myronov, AVP of Technology at SoftServe. “First, the most impressive tool is not always the optimal one, and often not even a practical solution to achieve business goals. Second, many overlook the fact that modern artificial intelligence requires a solid data foundation to function effectively. As a result, resources are spent on solutions that fail to deliver expected outcomes or do so inefficiently.”
Key Findings from the SoftServe Study:
- Outdated or Inadequate Strategies: 73% of respondents state that their data strategy requires significant updates or a complete overhaul, while almost all (98%) agree that updates are necessary to enable strategic initiatives such as Gen AI.
- Leadership Divide: A lack of full transparency among executives leads to differing opinions on data understanding. While 78% of vice presidents and 61% of directors believe their organization is not effectively investing in data due to leaders not grasping its value, only 44% of C-level executives share this view.
- On-Demand Data Challenges: For 60% of respondents, timely access to data is a challenge. Among companies that base decisions on inaccurate data, 51% believe that significantly increasing investments in data management is necessary to achieve business goals.
- Misguided Investments: Nearly 73% of respondents say poor prioritization has diverted resources and talent toward large-scale Gen AI initiatives that yield lower returns on investment.
A Challenge to Overcome?
Is there a way to solve the challenges associated with proper data utilization? Absolutely! The good news is that a well-thought-out data strategy can ensure optimal and goal-aligned data usage. The bad news—there is no universal strategy. Everything depends on a company’s needs and its current level of data management maturity. Some organizations may require the right data infrastructure, such as implementing a Data Lake or modernizing a Data Warehouse. Others may need a framework for data quality control, a data catalog implementation, or Master Data Management. “Developing the right data strategy is an art that requires understanding both business and technological aspects within an organization,” comments Rodion Myronov from SoftServe.
This approach can yield measurable benefits—according to the report, effective data management has allowed organizations to generate new revenue streams (44%) and monetize data (38%). Proper infrastructure and management transform data into a valuable income source. Companies also report increased productivity and efficiency (54%) and improved decision-making and forecasting (49%) thanks to solid data foundations. Interestingly, most organizations plan to follow this path—85% intend to slightly or significantly increase their data budget, and 42% of companies with a mature data strategy plan substantial investments in this area.
The Wakefield Research study for SoftServe was conducted in November 2024, surveying 750 business and IT leaders responsible for data management and AI utilization in global companies with annual revenues exceeding $1 billion across eight countries and eight industries. The full report, “The Great Data Divide,” which presents the current state of data management, challenges, and recommendations for effective data utilization in business strategies, can be found here: https://info.softserveinc.com/enhance-growth-with-a-sound-data-strategy.
