Advanced Computing in the Age of AI | Tuesday, May 11, 2021

Don’t Be Too Quick Trusting That 2020 Data in Your 2021 IT Planning 

As companies approach their 2021 business planning after the current tumultuous, pandemic-decimated year, it might be a wise idea to use plenty of care when using 2020 business data to make any kinds of projections for the new year.

That's the recommendation from data intelligence vendor, Alation, which recently conducted its second State of Data Culture survey in 2020 to learn how companies are coping with data-based business decisions as the COVID-19 pandemic continues.

About two-thirds of the 300 respondents to the survey reported that they are leery about the validity and accuracy of their 2020 business data for conducting their 2021 planning, according to the 31-page quanitative report, which was conducted by Wakefield Research between Nov. 2 and Nov. 16. The respondents included data and analytics leaders at companies with more than 2,500 employees in the U.S., U.K., Germany, Denmark, Sweden and Norway.

“Because 2020 is considered anomalous, two-thirds of data professionals (64%) say they are concerned about relying on this year’s data for planning purposes,” the company says in the report, which was released Dec. 17.  “Even as companies are adjusting to ‘the new normal,’ they question how to use what happened in 2020 for planning purposes. Adjust for it? Throw it out? Use other sources of data?”

Alation debuted its first State of Data Culture report in September as a way to measure the progress organizations are making in implementing a data culture. The report and associated survey aim to measure the maturity and pervasiveness of various components that, according to Alation, collectively comprise data culture, including things like data search and discovery, data literacy and data governance.

Less than 10% of organizations have adopted those three pillars of data culture across all of their departments, according to the latest quarterly report. And there continues to exist a data culture “disconnect,” in which leaders of organizations think their data culture is better than it really is.

However, organizations may be forgiven for taking a purely data-driven approach to planning for 2021, thanks to the anomaly that is 2020. In lieu of by-the-book data-driven forecasting and budgeting, organizations are taking an “all of the above” approach to guide their planning, the report continues.

According to Alation, 55% of business leaders are using economic or financial news to drive their decisions, while 50% are tapping into data from 2019 or earlier. More than half are watching their competitors’ activities, while less than half are seeking third-party insights and news about the pandemic.

The study found that, overall, 15% of data professionals say their organizations were prepared to operate in a crisis, while the rest were somewhat unprepared, mostly unprepared, or completely unprepared. Among organizations with the lowest data culture scores, the fraction that were prepared for a crises drops to just 2%.

COVID-19 also contributed to a significant decline in “tribal knowledge” among organizations, with 66% of study participants saying they lost a lot or some critical knowledge due to staffing changes that were caused by the pandemic.

“The loss of this tribal knowledge can impact the company for years to come– causing confusion, and bad decisions based on misunderstood analytics,” Aaron Kalb, Alation’s co-founder and its chief data and analytics officer, says in a press release. “Companies must capture this knowledge and share it across the enterprise to become data-driven and achieve successful business outcomes.”

It wasn’t all bad news, however, and progress was made in the fourth quarter in the Data Culture Index (DCI), Alation says. The survey found that 35% percent of companies were ranked as having a top-tier data culture, up from 33% in the third quarter, and 30% were ranked as having a low-tier data culture, down from 35% previously.

There is also some reason to be optimistic about staffing plans for 2021, according to the report. While the forward-looking projections may be unreliable for uses, 52% of survey respondents said they still believed their company will be hiring in 2021, and 72% said they expect data and analytics budget to be fully restored in 2021.

This article first appeared on sister website, Datanami. 

About the author: Alex Woodie

Alex Woodie has written about IT as a technology journalist for more than a decade. He brings extensive experience from the IBM midrange marketplace, including topics such as servers, ERP applications, programming, databases, security, high availability, storage, business intelligence, cloud, and mobile enablement. He resides in the San Diego area.

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