The technology, media, and telecom (TMT) sector creates and has access to more data (opens in new tab) than most industries. And yet, availability does not necessarily equal realized opportunities. A recent study by KPMG and HFS Research found that most UK TMT firms are not yet taking full advantage of their data, as only 37 percent of them have adopted a comprehensive data strategy at scale. At the same time, 83 percent of UK TMT companies believe it is likely that effective and widespread data usage will radically change their business model.
Ian West is Head of TMT at KPMG UK (opens in new tab).
Data is the gateway for TMT enterprises to understand customers (opens in new tab) and cater for their needs in a world where customization is the rule, not the exception. What’s more, insights from data can help firms develop new go-to-market strategies, create new revenue streams and capture market share from competitors.
Pandemic crowds out TMT data strategy
But our research highlights that TMT companies are not properly leveraging their data resources for potentially massive financial returns. To an extent, this relative lack of focus on data has been an understandable side-effect of the pandemic. The emphasis was necessarily on surviving and adapting to the circumstances into which businesses were plunged. In our research, approximately half of UK TMT respondents agreed that as organizations rushed to survive and thrive, most did not have time to think through the treasure trove of data they were creating for themselves. More than 53 percent of global TMT businesses believe they are under-utilizing their data volume for competitive advantage due to more pressing business issues related to the pandemic.
Solving this under-utilization has now become mission critical. Many advances in service delivery, personalization of services and new cost models depend on the effective use of data underpinned by comprehensive, enterprise-wide data strategies. Key elements including artificial intelligence (opens in new tab) (AI), machine learning (opens in new tab) (ML), automation and smart analytics are reliant on TMT businesses’ ability to become data-first organizations.
Of course, that is not to say that the TMT sector has not been actively working to develop effective data strategies. Most TMT businesses, for example, have infrastructure plans and programs to connect data across silos and standardize cloud (opens in new tab) use for data management and access. But half of UK companies in our research have a defined enterprise data strategy. Areas of opportunity include leveraging data as an asset, using data to transform business models and having a centralized function for data analysis. The foundational elements may be in place, but capturing the full value of data is still on the horizon.
There are many ways to leverage the power of data – but one key output could be to reframe traditional customer experience (opens in new tab) approaches. Consider the ability through data to link location, network, social media (opens in new tab) and customer profile datasets. An opportunity exists for telecommunications companies, for example, to detect customers who are on the verge of changing providers and create intervention scenarios such as discounts, proactive outreach and more. Data can transform an industry that is in constant pursuit of higher loyalty and lower churn rates.
Data investment firmly on the agenda
The realization of the need to bolster data activities is clear, with 88 percent of UK respondents in our survey planning to increase data-related spending in 2022. There is a strong appreciation of the potential rewards to be reaped – with 43 percent of companies strongly agreeing that over the next 12 to 24 months, data investments will have the highest returns of any other technology-related investments
We can expect to see a concerted focus on data within the TMT sector in the coming years. This will put data activities on a par with most other digital transformation programs – giving it the strategic focus and importance it deserves.
Five data recommendations
To that end, here are my recommendations for five high-impact data initiatives that TMT businesses should focus on as a priority:
Treat data like an asset and its use as a competitive differentiator
TMT companies are still at the early stages of transformative data use, but they are moving quickly to change this mindset. As they emerge from the pandemic, hybrid and work-from-home workforces are balancing out, and organizations have the time to step back and look at their data strategy through a more holistic lens. Recognizing data strategy as a foundational enterprise capability for success is driving this shift.
Target at least 10 percent of overall revenue from the monetization of data through new products and services
This is entirely achievable if you identify and then leverage the right data to inform the development of the right products and services.
Rethink the steps to achieve a cloud-based data architecture leveraging hyperscalers globally
This is the path to supercharge data access and accessibility across the ecosystem.
Use data in addition to gain process efficiency and to form the foundation of a connected enterprise within TMT
Expanding connectedness beyond the four walls of a TMT enterprise to encompass a larger ecosystem will only be accomplished through the effective use of customer, operational, compliance, and security data.
Drive transformation through the use of data with a focus on customer centricity
Democratize the data — create data sources both for today and the future focusing on both breadth and depth. It requires focus, investment and determination – but I believe that TMT businesses have the tools and capabilities to become world-class data organizations in the coming years.
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