CEOWORLD magazine - Latest - CEO Insider - The Competitive Advantage to Creating a Data-Driven Culture

CEO Insider

The Competitive Advantage to Creating a Data-Driven Culture

Florian Winterstein, CEO at Jedox. (Photo: File)

No matter the industry, whether it is manufacturing, IT, pharmaceuticals, finance, or personal services, companies of all sizes are drowning in data. Excel spreadsheets get tossed between departments while an overview of financial, sales and HR data is muddy at best. The growing demand for real-time data leaves executive decision-makers without the right tools in a quandary.

In a recent Reuters webinar about supply chain management with executive decision-makers from Walmart, Kroger and Under Armour, the general tenor was the same for them all: speed, accuracy and easy access to real-time data is the only way to manage consumer surges such as the toilet paper debacle in 2020. They view the move from legacy data to real-time data essential to keep pace with today’s consumer demands. While this need is relevant far beyond the consumer goods sector, a majority of executives have failed to embrace a culture that supports data-driven strategies effectively.

According to a 2019 Deloitte survey, 63% of US executives surveyed do not believe their companies are analytics-driven while 67% say they are uncomfortable accessing data using existing tools. The good news is there are tools available that provide collaboration, automation, transparency, and scalability potential based on data analytics. Forrester Research reveals that companies with a data-driven strategy are 140% more like to achieve a more sustainable competitive advantage while 78% are more likely to improve revenue. If the corporate culture were to support such aims, it would dramatically improve business performance.

Consider the all-too-familiar scenario: a successful enterprise that grew over time maintains financial data in a swarm of spreadsheets and a fragmented technology ecosystem that is isolated from other key systems such as ERP or CRM, leaving their data incomplete Generating budgets requires manually sifting through a stack of disjointed reports that eats up time and resources while carrying the risk of overlooking valuable information. Add multiple team members across departments, each approaching the data slightly differently and making minor changes to date ranges or filters, causing conflicting results that are nearly impossible to correct. A small shift in data management can dramatically impact accuracy. CFOs simply cannot provide accurate budgets and forecasts based on inaccurate information. The result is an embarrassing round of explanation to stakeholders about the discrepancies in the data.

Business is a combination of people, processes and tools. Creating a data-driven culture often stems from a driving need to improve processes as a result of rapid growth. Magna, a global automotive supplier with 348 manufacturing facilities and 91 product development, engineering, and sales centers in 28 countries, is no exception. Headquartered in Ontario, Canada with 31 factories and 10 R&D centers in China and with more than 10,000 employees worldwide, the company battled an overwhelming increase in data volume in 2019. Making an effort to improve their data resources usage, company executives decided to morph their data strategy from a physical to a cloud-computing environment. Magna’s digital transformation supported its rapid growth by replacing cumbersome processes.

“Excel is traditionally used in our budget preparation,” says Huang Qing Song, Finance Director at Magna. “This is not advantageous for a large and multinational enterprise. Our budget preparation process is complex and repetitive, requiring a large amount of manpower and material resources. When faced with long budget cycles and budget version controls, accuracy, timeliness, and transparency suffer.” The ability to analyze large data sets at high speed while quickly transforming them into applicable information is a daily business challenge for many organizations. In the case of Magna, preparing and managing budgets had proven to be a labor-intensive task, which led to confusion in the company’s long budgeting cycles. Company executives decided to upgrade their planning processes with a modern EPM solution. The results led to a simplified planning process, a fast and user-friendly implementation, the ability to formulate rolling forecasts combined with strategic development, access to more timely and relevant analysis and a 360-degree data overview in order to compare plans, forecasts, and actuals.

Florian Winterstein, CEO at Jedox. (Photo: File)

Artificial Intelligence (AI) is another modern tool that companies can utilize to support a data-driven culture. Founded in 1997, Mitsui Chemicals Europe is the subsidiary of the long-established Japanese company with a primary focus on the manufacturing, sales and marketing of Mitsui Chemicals products. As part of Mitsui Chemicals Inc., Mitsui Chemicals Europe has a wide range of product groups in its portfolio. Its existing planning solution based on Microsoft SQL and Access and the typical Excel scenarios was entirely too complex. In 2017, the Performance Controlling department decided to embrace a data-driven culture based on smarter tools to help them access data in real-time. The company implemented a new AI-based planning solution that significantly simplified and accelerated sales planning for Mitsui Chemicals Europe. Because the new platform integrated various subplans, Mitsui was able to quickly adapt to changing market conditions at the push of a button, thereby enhancing agility in its planning process. The module, which includes predefined business logic, supports the 12-month rolling sales forecast at Mitsui with AI-generated sales predictions. After just a few months, the accuracy of the forecast in relation to the actual values increased to up to 95 percent for several product groups. Harnessing the power of AI brought a level of insight to Mitsui that simply wasn’t there before.

The cash-in-transit service Loomis Turkey provides another example of simplifying complexity by embracing a data-driven culture. With 23,000 employees at 400 branches in more than 20 countries, Loomis offers comprehensive solutions for cash handling primarily to banks and retailers. Serving the growing demand for cash and gold logistics, the cash handling specialist entered the Turkish market by offering cash, jewelry, money processing and ATM supply and maintenance service. Its enormous client base and customer service points accumulated massive amounts of operational data. With its inflexible traditional data management methods, the company struggled to prepare management reports reserved to only a limited number of employees. In addition, Loomis required a real-time overview of its operational and financial data. The executive team sought to streamline its reporting process with mobile data access from anywhere in the world while consolidating its reporting, planning, and complex calculations into one single solution. The results were overwhelmingly positive: a centralized platform for all data and management reports, driver-based financial planning and reporting, transparent processes for planning and budgeting and flexible access through a mobile app. The company’s digital transformation has led to the speed, accuracy and easy access to real-time information required for businesses to thrive today.

Businesses undoubtedly have a growing need to improve their data management strategies based on a smooth integration of multiple data sources. Establishing a “single source of truth” is not only possible, it is also crucial to remain competitive in today’s environment. Committing to a data-driven culture enhances an organization’s ability to respond to an increase in data volume, leading to measurable benefits and a positive progression on its journey to enhanced business performance.

Written by Florian Winterstein. Have you read?
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CEOWORLD magazine - Latest - CEO Insider - The Competitive Advantage to Creating a Data-Driven Culture
Florian Winterstein
Florian Winterstein, CEO at Jedox, is an expert on fast-growing SaaS/PaaS organizations with a career spanning more than 20 years in management and leadership of software and consulting companies. He brings comprehensive expertise in digitalization, business transformation, growth strategies and organizational development to his executive role.

As a former chief strategy officer (CSO) of the BravoSolution Group, he brings comprehensive expertise in business and operational processes, growth strategies and organizational development. Previously, he played a central role at international companies such as Lufthansa, Allianz and ThyssenKrupp. At Jedox he contributes his experience to further expand the internationalization and leading market position of the company.

Florian Winterstein is an opinion columnist for the CEOWORLD magazine. You can follow him on LinkedIn.