MARKET | Nov 30, 2017

Young entrepreneurs and Data Management: the challenge of awareness

In a Digital Transformation Institute and Confcommercio study the view of SMEs regarding innovation as stimulus for growth

Which tools should a business adopt to take up the challenge of innovation? And having chosen the right tools, how can one make them effective in changing operating and strategic procedures? How to do so in markets which make the ability to analyze data coming from consumers their strategy and the ability to manage this data their strong point?

41.8% of companies are not familiar with, nor do they know how to use Big Data to support their business and their decision-making processes. This is made clear by the study “Innovation as a stimulus for growth: the perspective of young entrepreneurs” conducted by the Digital Transformation Institute in partnership with Confcommercio Imprese per l’Italia and with the collaboration of organizations associated with the Institute.

Through a structured study, which saw the participation of Confcommercio and the Institute’s experts on technical and political organizations, and a group of almost 100 young entrepreneurs involved in thematic focus group, it emerged that the investments in digital infrastructure considered most important by companies for launching a Digital Transformation process are the most traditional: security and privacy for more than half of the companies surveyed (55.6%), communication and marketing (45.4%), sales processes (37.1%).  And only 26.4% believe it necessary to invest in infrastructure that promotes the diffusion of Data Management, i.e. company management based on the ability by entrepreneurs to make decisions based on indications coming from the processing of collections of relevant data.

And to compete in new Digital Transformation scenarios?

The businesses said yes to the creation of a business network which would use Information Technology to improve both production processes and those for marketing and sale of products/services (24%), to the use of digital platforms shared between companies (23.6%), to the development of cloud solutions (21.9%). But only 14.9% – which falls to 8.1% in situations with a number of personnel between 20 and 250 – intend to invest in the development and use of Big Data to aid in company decisions.

Even for the development of new organizational models that facilitate the process of digitalizing companies, the development of Data Driven Decision, systems, aimed at directing the development of better services and at facilitating management, is considered of little use; indeed, the solution is labelled indispensable by only 14.7% of the companies surveyed.

Thus, in the era of Big Data, in which software and hardware have made giant leaps forward, allowing for the processing in an extremely short time of quantities of data which were unthinkable before, Italian companies are not ready, nor do they deem it necessary to be ready, to use new strategies to manage information, with advanced analytics to improve customer experience. The reality is that the companies which first dedicated themselves to these systems are gaining important competitive advantages, not just expanding the boundaries in their traditional market, but invading territories of organizations which do not have any obvious points of contact with theirs.

What is holding back a strategic choice that is so competitively important?

Definitely the lack of digital skills, which should be built up at all levels of the business, because they not only help to understand “how” to do things, but also to understand “what” to do, in a market which sees the digital as an element of substantial change.

Indeed, from the study on young entrepreneurs conducted by Digital Transformation Institute, one sees a lack of awareness, especially in reference to the development of Data Drive Decision systems to improve company organization, to steer the growth of an SME with respect to competitors, to allow for the identification of broader or alternative markets compared with that in which the SME traditionally operates or to increase the speed of expansion in its own market.

Indeed, almost half of the companies admit to not having opinions on some of the digital solutions proposed (from Blockchain to “factory as service” type business models), nor do they know how to use Big Data to support their business and to support their competitive capabilities. Furthermore, 44.7% admit to not having an opinion on some of the most widespread digital solutions, especially the use of Data Drive Decision systems to develop new organizational models which support companies’ digitalization processes.

Thus the challenge, which takes shape even before teaching companies how to build a fluid and reliable Data Management system aligned with their business, is that of developing awareness in businesses and in their entrepreneurs and developing those digital skills which make it clear how important it is to take decisions based on data to support company management, in a totally new scenario, in which the digital has already changed the entire market structure, impacting the habits of consumer choice and purchase and redefining the logistics and dynamics of competition.

Stefania Farsagli