How the UK's business leaders make decisions
Business leaders in the UK are relying more on experience and intuition than data and analytics in strategic decision making, according to new research from PwC.
The 2016 Big Decisions Survey looks at how organisations around the world use data and analytics to give them a competitive edge and what issues may be holding them back.
More than 250 UK business leaders were included in the study and 33% counted data as only the second most influential factor in the decision making process, ranking behind experience and intuition at 34%. External advice and input also accounted for a quarter of respondents.
Analytics is most often used merely as a diagnostic and descriptive tool, according to 59% of the UK participants. Less than a quarter use analytics to predict what would or could happen, while only 13% of respondents use an automated, prescriptive approach to determine what should happen and why.
Business decisions driven by data: 2016
|Rarely data-driven||Somewhat data-driven||Highly data-driven|
Yann Bonduelle, Consulting Data Analytics Partner at PwC, said: “This year’s study shows that data continues to be an underutilised tool in the decision-making process in the UK, despite the pace of technological change over the last two years.
"It’s clear that organisations know data is important, but are not yet properly leveraging it to supplement human judgment.
“According to our research, the great majority of organisations are using data to look backwards and are missing out on the great advantages that tools such as predictive analytics can bring to a company’s success.”
The next big decisions by UK business leaders
|What will be your next big decision?||Percent|
|Developing or launching new products or services||25%|
|Investment in IT||20%|
|Entering new markets with existing products or services||18%|
|Entering a new industry or starting a new business||9%|
|Corporate restructuring or outsourcing||8%|
|Change to business operations||5%|
|Shrinking existing business||4%|
The survey shows the UK to be lagging behind in using data as part of daily business operations when compared to other major economies. Only 30% of UK organisations overall claim to be highly data-driven, in contrast to 45% in the US and 53% in China.
This trend is not, according to PwC, the result of lacking data resources. 23% of decision-makers attribute limitation factors to issues with leadership courage.
Yann concluded: “At a time when rewards for first-mover advantage can be so high, now is the time to use the power of predictive analytics to increase competitive edge.
"To become a data-driven organisation, business leadership needs to set the tone and deliver on their commitment. This means adopting a culture of experimentation.”
The factors that limit decision making
- Leadership courage: 23%
- Availability of resource/manpower:18%
- Budgetary considerations: 17%
- Operational capacity: 14%
Source: PwC Big Decisions Survey