The Bright Future of Data-Driven Businesses

More and more businesses are becoming data-driven, providing a new and better way for business leaders to make decisions. Data-driven decision-making and management are allowing modern businesses to unlock value and create new opportunities based on data.  

“More data has been generated in the last two years than at any time in history. In an automotive plant, 2,200 terabytes of information are generated per month. This is equivalent to 500,000 movies on Netflix,” said Alejandro Preinfalk, President and CEO of Mexico, Central America and the Caribbean and Senior Vice President of Digital Industries, Siemens.

Data analysis can make the company more productive, competitive and efficient, allowing organizations to reduce human error, avoid costly mistakes and save time and resources. “Data management allows for better decision making, allowing us to focus on the customer and to boost innovation,” said Ingrid Avilés, Country Manager, Waze.

Moreover, capitalizing data can generate new business opportunities, increase sustainability and open the door to more markets. “Data-driven businesses can increase their productivity by up to 40 percent. Data management also increases efficiency, agility, flexibility and predictive maintenance, allowing the use of new technologies, among other benefits,” said Preinfalk.

Additionally, data allows global companies to have a local approach and adapt their services to the needs of specific markets. Data management can even transform companies into actors that improve life quality and even save lives. For example, by sharing data with the public sector, emergency services can respond faster to emergencies. “Waze receives accident notifications faster than government entities. By sharing this information with them, we have helped to optimize the time in which an ambulance arrives at an accident,” said Avilés.

Alliances and the use of data can accelerate the development of solutions that provide widespread benefits, such as supporting the fast development of the COVID-19 vaccine. “Siemens worked with pharmaceuticals that developed the COVID-19 vaccine. During this time, we managed to develop the formula and distribute it in less than a year,” said Preinfalk

However, done incorrectly, this transition can create potential weaknesses that expose the business to risks. For that reason, data protection should not be treated as optional. “Data protection is a need for users and an obligation for companies. It needs to be based on a regulatory framework,” said Sergio Dueñas, Chief Digital and Growth Officer, GBM.

Companies that manage large amounts of data should always prioritize security, as mishandling sensitive data could hurt both the business and its clients. “Poor data management harms organizations. In Latin America, there are 35 attacks per second and in 2021, cyber damage amounted to US$6 billion,” said Preinfalk.

If done right, businesses can use data to expand their customer base, grow their operations and increase revenue. So why are companies not realizing the full potential of their data? The most common reasons are slow data transmission, ineffective data analysis, inadequate risk management systems, budget limitations and securing executive buy-in. The lack of talent and technological gaps in Latin America are also hampering the digital transformation. 

“In Mexico, we have had a delay in digitization. Mexico is a country with a marked idiosyncrasy that is based on the fear of digitization, the use of cash and traditional behavior. To generate data, people must be part of the digital ecosystem,” said Dueñas. Companies of different sizes also move at different speeds when data is involved. “The digital transition represents a lot of work. Things are changing fast and SMEs do not always have the capabilities to adapt to the changes of regulations,” said Ferdinand León Meister, Director Latam and Iberia, SentiOne. However, SMEs’ smaller size also provides them with some perks. “Compared to other companies, SMEs do not face many problems to adopt a data driven culture, as they have a simpler structure,” added León. 

For all companies to succeed in the effective collection and use of data, they have to find the balance between a centralized and a decentralized strategy. “Decentralization is important to increase companies’ business value,” said León. It is also important for directives to take the lead in the transformation in the mindset and vales of the business. “The culture of a company allows organizations to enter the digital transformation as it is a change in the business model, not a technical transformation,” said Preinfalk. 

However, experts agree that the responsibility to boost this transformation does not lay only on companies; individuals, companies and communities have a responsibility to facilitate the transition and leverage data in favor of all actors. “Transition to the use of data can really add value. It is not only about having the data, it is about knowing why you have it and how you are going to use it,” said Dueñas.