Digital analytics are playing an increasingly important role in helping to drive digital transformation programmes, according to new research published this week by Econsultancy and Lynchpin.
The key findings of the 2017 Measurement and Analytics Report — now in its tenth edition — were unveiled last night at a Web Analytics Wednesday event in London, hosted by Lynchpin and featuring panellists from Addison Lee, Saga and The Book People.
This year’s research, based on a survey of more than 900 companies, has found that 81% of client-side respondents now believe that digital analytics are important to digital transformation programmes within their organisations, an increase of four percentage points from 77% in 2016.
How important are digital analytics to your organisation’s digital transformation programme?
Respondents 2017: 352; Respondents 2016: 332
Mark Carlock, head of analytics at The Book People, described how analytics were playing an important role at the bookseller as the company evolved from being a catalogue business into an ecommerce company.
According to Graeme McDermott, chief data officer at Addison Lee, the data and analytics function he runs was established as a result of new company ownership — the London taxi company was acquired by private equity firm the Carlyle Group in 2013 — and largely in response to the disruptive threat of Uber in the marketplace.
The research shows that executive sponsorship is widely seen as a prerequisite of digital analytics success, describing how “a top-down approach to digital analytics and data-driven decision making is crucial for ensuring that a culture of analytics is embedded within the organisation”.
The overwhelming majority of this year’s survey respondents (94%) agree that executive sponsorship is important for promoting digital measurement and analytics internally, but only 50% say they have this support within their businesses.
According to McDermott: “Ultimately the CEO has to believe data and analytics is an intrinsic part of decision making, or else the other executives will just pay lip service.”
While the panellists generally agreed that a top-down approach to data and analytics was crucial, Dave Rhee, head of analytics at Saga PLC, stressed the importance of instilling a ‘bottom-up’ approach to ensure that the right culture permeated the business over the long term, rather than being reliant on a particular sponsor.
Strategies and frameworks still missing
Reflecting the lack of senior buy-in for analytics at many organisations, the research has also found that related strategies and frameworks are missing with many companies.
Almost two-thirds (64%) of responding companies are lacking a documented data analytics strategy, up from 62% last year. Meanwhile, the percentage of companies that have a measurement framework in place remains at 59%.
Lynchpin’s head of consultancy Gary Douglas, who was also on the panel, stressed the importance of having the right over-arching metrics in place: “You need to have metrics in place that are linked to commercial outcomes for the business, that make a difference and help to define long-term success.”
GDPR – ‘You don’t have to outrun the bear’
Panelists also discussed how prepared companies were for May 2018 when the European Union’s new General Data Protection Regulation (GDPR) comes into effect.
The imminence of this legislation is resulting in a compliance headache for companies simultaneously seeking to mine client data more extensively and intelligently, while at the same time trying to protect it. The extensive EU text seeks to harmonise and tighten privacy laws across Europe, with additional obligations around areas such as consent, data portability, consumers’ ‘right to be forgotten’ and breach notification.
The chart below shows how prepared analytics teams are for GDPR. Only 10% of client-side respondents said their teams were ‘already compliant’, while a further 38% said they were ‘in the process of making the necessary changes to be compliant’.
Is your analytics team (or are your clients’ analytics teams) prepared for when the EU General Data Protection Regulation (GDPR) will come into effect in 2018?
Company respondents: 317; Agency respondents: 221
Asked whether there were similarities with the Millennium bug (when there seemed to be minimal impact compared to the Y2K hype that had preceded the new millennium), McDermott said that GDPR could be much more significant for businesses, adding that ‘your systems won’t fall over, but you will get fined a lot more money’.
Saga’s Rhee stressed that it was important to read what the new laws say, and then take a view as to what they actually mean, rather than relying on what other people are telling you.
Confirming that Saga would be ready for the deadline, he said that some companies would get away with not being fully compliant, as long as they were more prepared than others: ‘You don’t have to outrun the bear, you just have to outrun your companion,’ he said.
The 2017 Measurement and Analytics Report, published by Econsultancy in partnership with Lynchpin, is now available to Econsultancy subscribers for download.