How to maximize the transformative power of next-gen data and analytics

In this episode of EY Microsoft Tech Directions, we explore ways organizations can leverage the full power of data and analytics, triggering truly customer-centric transformation.

Key takeaways:

EY Tech Horizon survey reveals that 53% of companies are making data and analytics their top investment priority during the next two years. Leaders in the field are forecasting 43% greater revenue growth than laggards.
Cloud can be key to success, giving organizations the transparency they need. Companies must have a clear view of their data model as well as clear management and governance systems and processes in place.
Organizations must put humans at the center of their data strategy and that means being successful in the race for talent by developing a human-centered purpose that resonates with employees.

For your convenience, full text transcript of this podcast is also available.

Susannah Streeter

Hello and a warm welcome to the EY Microsoft Tech Directions podcast. I'm Susannah Streeter and in this episode we're focusing on how to unlock the full potential of next generation data and analytics. Just what is the best way to drive powerful customer-centric transformation? It is clear that data is the new currency for big business. It measures together hugely valuable insights from markets, customers, and employees. Right now, the global economy is entering an entirely new generation of data and analytics, supercharged by new technologies. But there is still a huge divide between the data world we'll be in in the future compared to where we are today. That's the stark finding the latest EY Tech Horizons research. So how do you bridge this gap and lay the roadmap to reach those future opportunities? What are the best ways to build up the layers of technology needed to reach the next level and, ultimately, the end game? That's what we're going to be exploring in this podcast. And I'm delighted to say I'm joined by some of the best experts in the field to help us navigate the way forward. But before I introduce them, please remember conversations during EY podcast should not be relied upon as accounting, tax, legal, investment, nor other professional advice. Listeners must consult their own advisers. But I'm very excited to hear the views of some of the top experts in business lead digital transformation. First up a big welcome to Jim little EY, Global Microsoft Alliance Lead.

Jim Little

Hello, how's it going?

Streeter

Very well. Thank you. Great to have you on the podcast and a warm welcome to Andrew Wilson, Chief Digital Officer at Microsoft.

Andrew Wilson

Hello, Susannah, really good to be here. I hope everyone is safe and well.

Streeter

We certainly are. Let me start with you, Jim. So would you say that data and analytics are now really a leading priority for the majority of businesses?

Little

Yeah Susannah, I think that's a really great question. In our recent Tech Horizon survey surveyed a little over 1,500 companies across geographies and across sectors, and 53% of those 1,500-some-odd companies are making data and analytics their top investment priority over the next two years. That's a 50% increase from the last survey. So, you know, the market is almost screaming at us that data and analytics is becoming more and more important. And as you rightly said, in my opinion, the new currency of the world as we go forward. But it's also kind of interesting that we found that for the leaders in digital transformation that are fully taking advantage of data and analytics, they're forecasting 43% greater revenue growth than the laggards. So pretty profound numbers that support data being so critically important, but I think I could feel it every day, every day that I talk to clients, we're talking about their data strategies, how do they take advantage of AI and ML? They've invested in the cloud. How do they start to take advantage of that investment and start to combine that with the data and combine that with new capabilities to not just look backward in terms of what the data is telling them, but how do they look forward? How do they drive predictions? How do they optimise experiences with their customers, whether it's consumers or whether it's more of a business to business play? How do they improve operations, boiler optimization, if you will, some of the more technical things, and hopefully, you know, using the data to simplify their operating models and simplify all of our lives along the way.

Streeter

So Jim, you're feeling it? Andrew are you feeling this change, as well. And also, I want to ask you about the laggards that Jim pointed out. Where there are laggards why do you think they are falling behind?

Wilson

I'm definitely feeling the change. Digital transformation, which we've been talking about for a number of years exists for a reason. It exists to make companies and businesses successful revenue growth, great employee experience, great customer experience. Many businesses have been around now for decades. So they have history and legacy. And I think we technologists have moved in the last few years from a dialogue about systems and systems of record and transactions and availability to one that's far more fundamental to the mainstream current business agenda and business priorities. And that all pivots around data. Data and mission criticality for the overall business is what we technologists are now all about. And I think every customer that we speak to is feeling it. There's a demand from the customer base, particularly now, to enjoy new direct relationships with organizations. Organizations are very keen to understand who their employees are and retain them. Organizations need to know as they scale and are successful, how to deal with all of the data that they've always had. But have never had as real time access to. And now, there's a lot more data because we have Internet of Things. We have systems which generate far greater granularity of data, we have to navigate all of that. And I think there's a cultural shift as well in organizations who, who want data to be in the hands of the employee, in the hands of the people, that democratisation if you like, but how to handle all of that? So data really is the fundamental agenda. I think we follow data flow through business processes, we follow data to be that view of employee and customer. And the technologies must become the data scientists. And so that's a big change agenda. And organizations will not necessarily have that natural muscle. They need a combination of technologies and those who are inventing and developing, but they also need a broader set of capabilities than they previously had. And it doesn't naturally sit within any single management though, within organizations. So it's a complex question that needs careful consideration as organizations think about their future and the way data is going to be handled. It's an exciting time as well. And I think as Jim's describing, there are lots of questions that need to be asked that are a long way removed from the original sort of objectives of a digital transformation strategy. I think the laggards have heavy lifting, perhaps the new starts if they've got a clear Northstar, will have a cleaner start. The good news is I think tech is accelerating and advancing and helping us with this problem as well.

Little

I think the other interesting thing you see, often historically, when we talk about data, we think about data within the four walls of whatever company we're in, right? So how do we take advantage of the data we generate as a company, and that paradigm is changing pretty dramatically, right? It's certainly taking advantage of the data that we generate, but it's what I would call the ecosystem of data, right? So how do you take advantage of other sources of data, whether it's data being generated from the edge that may you may not own? How do you take advantage of customers' data that has been shared with you? How do you take advantage of supplier data that's been shared with you? How do you take advantage of external sources of data and how do you bring it all together to derive new experiences, new insights, better outcomes, as Andrew rightly pointed out. You know that the classic historical example has been Walmart, right? For decades now. They take advantage of that ecosystem of data to optimise their operations. And it's now bringing that into the more mainstream.

Wilson

Jim, you remind me of a big question we're all answering at the moment: sustainability. And Susannah, one of the key questions I think any organization has got to answer with increasing levels of compliance and auditability is, what their carbon footprint is, what their water footprint is, and are they achieving the public sustainability goals that many organizations are signing up for? That requires the data Jim's talking about, that requires a complete view of supply chain both up and down, that requires a convergence of different data sources that have never been compared and analysed before. So it's a great example of how the game is shifting.

Streeter

But where do you start? Because as you say, it is so complex, and particularly for those organizations just starting out on this journey. Jim, what advice can you give them about where they should be heading first?

Little

First of all, have the courage to start in the first place. As Andrew rightly pointed out, you know, the technologies are moving faster and faster. Having the digital foundation to both generate and consume data, cleanse it, do something with it, derive insight with it is becoming easier and easier. Microsoft as a company has a number of products that help with that along with others, and really helps to accelerate that. And I think of it is start with the customer first. Because when you start with the customer first you can see the impact. I don't know if you agree with that, Andrew, but love to have your thoughts too.

Wilson

I certainly agree with that Jim. Building on that, we were talking earlier the foundations as well, and I'm an organizer at heart. And so this topic really appeals to me, which is get organized and seize that new role that an enterprise needs and redefine the role in my case of the CDO to be the transformer and the source of insight for the organization. To do that, you need to be organized. So a clearer view of the organization's data model, a clearer understanding of the sources a place to put it, a place to govern it, a place to be able to manage access to it, but not in a central controllist way, but in a way that allows business owners and true owners of data to know what data they have, where it is, who is using it for what and with what outcome. That's the transparency that a modern data culture demands and drives. So good solid foundations, I guess I would say it wouldn't I but cloud gives you that, cloud gives you the ability to have an enterprise data lake, the ability to liberate data from trap silos, the ability to optimise the storage and management of that so that there are cost savings and efficiencies as well. But I wouldn't sell this as something which is all about cost management, although it's a good benefit. This is about speed, agility, currency, accuracy, predictability, fairness, and all of those other things that you need in a modern data posture. So I think having clear data models, having a really good up to date view of what the enterprise's data posture is certainly for the enterprise data that is within the four walls, as Jim was describing, is really foundational, and is a great place to start. Along the way you can then prove, I think this is where the cultural change is, that there isn't a loss of control, if you like, you know, people like to protect their data and different parts of the organization will be perhaps wary of each other and exposing data. But my goodness, let's make sure that there's a single view of the truth we talk about, don't we? I think that's that's key. So this is as much around a philosophy of how work is done. Insights are generated and outcomes are perceived. That means there's a big cultural shift there.

Little

I agree with everything Andrew just said. I want to make sure it gets interpreted right to the audience. Let's build that foundation. And what I would call is expose it to all parties or as many parties as are appropriate within the organization. What you don't want to do is centralize everything and then centralize access to the data so that very few people can access that data.

Wilson

I think Jim is reacting to what many organizational divisions do which is that wariness. Centralization doesn't mean loss of control. It actually creates better access and view and gives most capabilities access to things they didn't have access to before. But there's a there's a proving there. I think back several years to when we were trying to convince ourselves that cloud was safe and cloud was the right place to be, that cloud was better than being on prem. And again, there was a, there was a need to re-educate ourselves as technologists in our businesses, because we'd grown up with, you know, several decades of a different paradigm for operations. And yet now you look back, and certainly as an organization that runs entirely in the cloud, it's hard to imagine going back to a world that didn't have that flexibility.

Streeter

Let me pick up on what you're talking about, the change in culture. Jim, I want your take on this because Andrew's, you know, really explained why he thinks there needs to be a cultural change. But I want to examine what this is. I mean, do you think it means that the IT function should be completely overhauled and democratised across departments to truly kind of integrate technological innovation across the business?

Little

The day and age of IT business, I'm going to say is nearing an end, right, where IT is a core component of the fabric of the business or technology, if you will, as a core component of the fabric of the business. And so we need to rethink the way technology is deployed, we have to rethink the way technology operates. Andrew made a great point about traditional data centre and data centre management that would always take up 40-50% of any particular IT budget back in the day to move into the cloud. And the role of the cloud engineers has evolved dramatically versus the data centre operations folks. So the sheer, what I would say is tone and texture and philosophy of technology is much different today than it was. And that requires a cultural shift. That cultural shift is not about laying down big, elongated waterfall type processes that take forever. Take an army of folks, and then hopefully it works at the end. It's about how do we move faster and be more agile? How do we get more data? How do we cleanse that data? How do we create tool sets and workbenches so we can have departments, functions, even customers take advantage of that data? How do we deploy new capabilities to optimise operations, you know, drive income statement or balance sheet improvement, and then really thinking that through within the context of that particular company. Each industry is changing at its own pace. So it's going to evolve at their particular paces. But I think in you know, 5-10 years, IT and technology is gonna look and feel a lot different than it does today. And I'm sure we'll get into during the course of this podcast, the dialogue around talent. So talent is changing and their desires are changing to.

Streeter

Absolutely. Before we move on to this, I just want to ask you, then Andrew, do you think the IT department as a concept is dead the?

Wilson

No, I do not. But it's evolved. As Jim says, it's evolved in reaction to the fact that the role of technology in enterprise is so much greater and more prevalent than it's ever been, and will continue to be so. It's evolved because the capabilities that we're manipulating have changed from the classic on prem and self coded to platform based cloud first economies with a data first posture. It's got new capabilities arriving faster than ever before, AI being a really good example, it's very closely allied to the data theme. So doing it the same way with the same skill base, either as leaders or as the practitioners wouldn't achieve the result, wouldn't achieve the speed, wouldn't achieve the ability to be representative within the business and to help the business become a technology company as every business must be. So whether or not that's an individual organizational entity, whether or not that's a set of governance models that control IT in a more prevalent way throughout, both both are workable, and that's a function of governance, history, access to talent, different industries have and will have a different allure to technologists. And so there is that talent market question that we're all aware of at the moment. I think most organizations will have evolved their IT organization if we still call it that, as I said earlier, you need broadcasters, data scientists, change managers, coaches, you need individuals who are capable of writing and measuring and delivering business cases, that's a very different paradigm to classic IT. So transformational roles, Insight Officers, Data Officers, you see all of these organizational entities. And then with the democratisation of data, as we were talking about, but also the democratisation of code. These things are arriving at a rate we've never seen before. And that acceleration is continuing. So an organization cannot turn off that navigation, it would be anarchy, candidly, but what it won't do is run it all as it used to. So I think the digital transformation strategy going forward is in equal parts one of philosophy as we've talked about culture, the way work's done, it's also around being organizationally agnostic. I think a digital strategy must persist, delivered via a whole variety of organizational constructs, particularly if an organization is very acquisitive, your organization is not a steady state entity, we see that in all of the worlds we live in. So it's here to stay, but it will look and continue to look completely different.

Streeter

Now let's talk about that access to talent that you've highlighted and Jim's highlighted. I mean, Jim, do you think the labor crunch really is causing a huge headache for companies now, across the board? I mean, Andrew's talked about the fact that you really have to provide the allure to attract the top talent. How much of an issue is this right now?

Little

I think it's a huge issue. Right now, you know, there's some statistics that say, you know, in the United States, 3 million people have left the workforce during the pandemic, not just recirculated, but left the workforce. That's material. So you know, the skill shortage is pretty significant. And it is affecting progress. And I'm going to specifically focus around technology, it's affecting progress. And it's not just the lack of skills, it's the change the dynamic of what those skills find important. As a generalisation, it's not just about okay, how much are you going to compensate me tomorrow. The purpose of those employees and those skills and the talent, you really have to have a story that describes to them and they resonate with. I live in Seattle, so pretty significant tech hub, where it's pretty much a dogfight, trying to find the right technology, talent, and Andrew would know that very well. But being able to show them the purpose, show them that technology is important to that particular firm, show them how they can, you know, affect the broader community, can either help make the corporation or help hinder it. Now, that being said, there's a lot of hope, as well. So more and more talent is coming out of universities and below universities from an education standpoint, with technology skills, right? It's no longer okay, we have to go to a four year university and then maybe get an MBA or a master's in something, to become a leader in a particular firm, you can go to a coding academy, and you can, you know, get hired by Microsoft or even EY and start doing tremendous technology work and continue to move up the ranks that way or stay doing tremendous technology work. And so I think the the hope is that technology is not just becoming more important, but the talent are finding new avenues to learn, to get motivated, to build their skills and build community around that.

Streeter

Do you think, Andrew, if companies don't get this right, it really will act as a drag on company transformation?

Wilson

Absolutely. The requirement and the need to appeal to a workforce is interlinked and interlace with the brand of an organization. Yes, there's a big reflection on what the work value proposition is and what individual humans want. But that reflection is cross industry and so we need to think both as the providers to the world of IT capabilities, but also employers ourselves, what sort of experiences, what sets of behaviours in work are going to appeal? How do we make the job of work as fun, flexible, hybrid, dare I say, open and future oriented to appeal to the maximum number of workers and those workers who may not have imagined a career because of whatever their existence. We can raise the question of accessibility, providing access to a rich and very capable set of talent that, perhaps has not been enthroned to the work market previously. I think questions of appealing to every form of humanity. So it's the inclusion and diversity agenda as well, by the way, which you need a clear view of data on in order to navigate. So it's all coming together. And it all hinges around the human. I think that as you look through what we've gone through as a pandemic. I think it's taught us a lot. You see different organizational responses and views on how it will be in the future. But my goodness, humans are flexible. And I think, alongside flexible technology, if the digital strategy has positioned the company accordingly, organizations are now realising they can do a lot more differently with a different set of humans. And they're going to have to really up the game in terms of making sure that the experience they offer is one that they understand, and they can measure and track and that the employees enjoy. And I think all of that is sitting firmly in the lap of the technologies in terms of running all of those channels, those linkages, those platforms, we've got a different ecosystem haven't we? I mean organizations like EY, organizations like Microsoft help organizations to be successful, either as the hyper scalar or driving transformational change. So there's a lot of talent out there, and all of the humans who were out there are still out there. They may need re-motivating and they may do different things, or in different places, or at different times, or in different ways. But technology can navigate that. So I'm an optimist, that of any industry, tech will be the one that can be most innovative in providing most career options, choices, locations and behaviours to continue to attract and retain. And then help organizations to be able to, through their HR transformation programmes, actually understand who their workforce is, and what their DNA is and what their workforce needs. So a great time to map out a North Star for that, the way work is done in the future, as well and talent will always be at the heart of it.

Streeter

Would you agree, Jim, that it's this real offer of flexibility and also reaching those really diverse talent pools that currently may be out of reach for many companies that is going to be really crucial to ensuring that you have the right talent going forward?

Little

I do. I do agree probably about 5,000%, the Tech Horizon survey talked about a little over 50% of employees would entertain leaving, if flexibility is not a core component of the agenda of that particular company. That's a lot. First of all, just by sheer nature. I think the other piece is there's a general thirst in the market for diversity, diversity of opinion, diversity of thought. Now what I would call is the new generations in particular thrive on that, thrive on a different way to collaborate. It's not step by step by step, have a manager check in, approve, step, step. It's more amoeba like, if you will, where, you know, folks are either virtually or physically in a room. They're sounding ideas with each other. They're building on each other's ideas. And really the energy associated with that collaboration is one of the things that the talent is thirsting for. You saw that during the pandemic, of course, we're still in it. But the beginning of that pandemic, you saw some companies worry about productivity, as Andrew pointed out a little bit and how do they take advantage of technology to address productivity concerns, but you saw a lot of companies start to worry about community. Worry about collaboration, safety of employees, how do they take advantage of technology to further support the teams that they've built and constitute that feeling of collaboration that sometimes a physical presence can provide. So to me, I agree with Andrew 100%, or 5,000%, as I said earlier, and I do, I'm an optimist. I've got a lot of hope, I've got three kids. So I get to live it every day and see what they get to do.

Streeter

I get to dip into that optimism now and ask you about what you think the scenario will be in, say, five years’ time. So Andrew, how convinced are you that companies will have equipped themselves with the right tools and strategies to unlock the full potential of next generation data and talent?

Wilson

I'm excited for the future. I think we've learned a lot in the last two years. I think organizations will step up and thrive and accelerate in delivering new experiences, in the new digital realm with even more pervasive technology underpinning it. I think organizations are going to be really enabled as employers of choice and of ways of working as we were talking about, I think technology is going to be even more mission critical. I keep coming back to that mission criticality. And I think that it's a main board conversation and a main business strategy conversation, and not just a response to those, it is the topic of urgency and focus. I think organizations will be AI infused, I think services will be delivered across an ecosystem, which is richer in its integrations, which is able to move faster, that will give organizations the ability to operate at that speed when talent will always be as scarce as we've just discussed. And I think technology will create new opportunities to solve new problems, as quantum comes online, as organizations achieve a full cloud posture. That modernization that we were talking about earlier, will continue. And I think it's really exciting. I think we'll become more the managers of the machines managing the service, I think that will place new responsibilities on us in terms of fairness and appropriateness of responsible AI. I think that's a new task for what we were previously calling the technologist or the IT department. There's a fabulous opportunity for, for growth, and for reset, and for helping brands succeed and grow and thrive. So I'm very optimistic. I think conversations like this show that we're thinking about it and encourage us to not just start here, but to think about what that North Star is what that not so much end state but next state needs to be. So it becomes a purposeful thing, and not just a reaction to how we got there in the first place.

Streeter

Absolutely. So Jim, I want to ask you, what challenges will remain? And do you think you know, as Andrew was pointing out there, there is this huge shift companies have to get used to in terms of the organizer of the machines, will they be able to really adapt to that shift? sufficiently?

Little

I think it's a great question, you know, the one thing I would bet on is it's going to take longer than some people think. So these things tend to take a little bit longer than the average consultant might tell you. And I'll say that with all due respect to my consulting brethren, but they tend to have more profound impact than are predicted once it does get to maturity. So I think it's going to be continued to evolve over time. So I wouldn't lock it in in a five year time horizon, I think you're going to see some companies that absolutely started to achieve the vision that you know, and aspiration that Andrew has pointed out, and working that through. I think the challenges will continue to evolve. You know, when you look at today, where 16% of organizations are, quote, unquote, data centric, if you will, they'll continue to evolve, they'll start to evolve faster, the state of business will be moving faster than it is today. And for some people that's scary, because today is moving faster than ever before. For some people that's very exciting to me that it's very exciting. And it creates a lot of interesting opportunities. I think there's so much both ideas and capabilities that have been untapped. You know, Andrew mentioned quantum, right, we can take quantum into drug research and we just saw how quickly you know, the world was able to pull off a vaccine, for example, but imagine if we could do that in days instead of months. We just took the five year cycle down to nine months. And what if we took that down to 10 weeks or something even less, we're still going to have significant challenges around talent, maybe not accessibility to talent, we'll have to let that evolve out. But getting the right talent at the right place, continuing to put humans at the centre, and that includes diversity at the centre, that includes all things surrounding human, putting that at the centre is a real differentiator today, and it's hard for me to imagine that not being a differentiator in the future. As Andrew was talking a little bit about AI it reminded me about the early forecasts of AI destroying jobs.Will unemployment go through the roof, that type of thing? Well, really, what it's done is it's shifted the way we think about talent, to further promote humans at the centre and create new capabilities. What is IoT gonna bring? What is quantum gonna bring? 10 years ago, nobody thought about Uber as an example. That's data driven. DoorDash, probably fewer people thought about it until two years ago. And now it seems like whether it's DoorDash, or one other competitors, lots of people think of that. So I think it's going to be a lot of challenges. Data is going to be at the core of those challenges, how we take advantage of that, new technologies will continue to evolve. And the opportunity is in front of all of us.

Streeter

That's great. Well, thank you so much to both of you. It's been really fascinating getting your insights on the podcast today. It's clear there are so many opportunities ahead for businesses to capitalise on data and analytics to build out a more customer centric transformation. So thank you very much, Jim. And Andrew, or should I call you Chief Optimist and Chief Organizer?

Wilson

Thank you.

Little

Thanks, Susannah.

Streeter

For more information you can visit ey.com/Microsoft. And a quick note from the attorneys. The views of third parties set out in this podcast are not necessarily the views of the global EY organization, nor its member firms. Moreover, they should be seen in the context of the time in which they were made. I'm Susannah Streeter and I hope you'll join me again for the next edition of the EY Microsoft Tech Directions podcast. EY and Microsoft. Work better, achieve more.

Presenters

Jim Little

EY Global Microsoft Alliance Lead and EY Americas Technology Strategy Lead

Andrew Wilson

Chief Digital Officer at Microsoft

Podcast

Episode 8

Duration

32m 5s

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EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

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How to maximize the transformative power of next-gen data and analytics

Key takeaways:

Presenters

Jim Little

Andrew Wilson

In this series

Presenters