A report by DXC Leading Edge
A study conducted by DXC Leading Edge found that most organizations struggle to make the time-critical decisions necessary to play in today’s volatile markets. Our findings suggest that two conditions must be met in order to optimize decision making. First, decision making on behalf of the organization must be understood to take place within the three states of Discover, Develop and Defend. Second, data and insights must flow through the organization in a focused and timely manner that supports these three states. In combination, we call this “data metabolism.”
Data metabolism consists of the ability to serve up relevant data and insights at the right time and speed to the right people, and, crucially, to optimize decision making. Data management and decision making are inextricably intertwined but are often considered separately, or not at all. They can, however, be realigned to enable optimal performance by enterprises, teams and individuals, as you will read in this paper.
In this paper, DXC Leading Edge:
Surfaces the crisis in decision making:
- Our research reveals organizations are experiencing a crisis in decision making exacerbated by an inability to metabolize data — to serve up the right data and insights at the right time and speed to their constituent groups.
- Organizations with failing data metabolism and overly democratized data, analytics and other information assets are encouraging the people who are invested in protracting or preventing decision making.
- A 2021 Economist Impact survey found that six in 10 executive respondents (61%) reported having to cancel a digital project for lack of the right data.
- Business structures and processes are typically — and erroneously — based upon the rule that capital increases in value over time. But information loses value over time, which means existing management and control structures for balancing risks and rewards no longer work correctly.
- A combination of social media, mobility and analytics has led customers, partners and employees to become what we call “appified” and to expect instant gratification at nearly no cost.
- Few organizations can make decisions and act on data at the speed that appified people demand. If your organization cannot roll out thousands of new products every week in a cycle time of less than a week from design to production, you are falling behind.
- Organizational paralysis in decision making is fed by the assumption that more data is better, which perpetuates the problem. Future investments in data, analytics and information management tools not only fail to generate positive returns but also cause further dysfunction.
Explains how to fine-tune data metabolism:
- The taxonomy of Discover, Develop and Defend (the three D’s) describes the primary states and outcomes of business activity, enabling focused data usage and a gameplay for optimal decision making.
- The value of data changes differently along the life cycle of each of the three states, and decisions can be optimized by accruing or disposal of data as it values and devalues.
- Many organizations do not recognize the sunk costs associated with Defend duties. In large organizations, it’s not unusual to see a substantial proportion of the workforce dedicated to Defend processes.
- Data metabolism can be optimized through careful interventions that balance both decision making and data engineering, as summarized in Figure 1. These interventions have been designed based on our learning through the research conducted.