The Data Culture Gap: Q1 2022 State of Data Culture Report

What’s a common trait of businesses that hit revenue targets? They all prioritize a data culture. In fact, 90% of organizations with top-tier data cultures either met or exceeded their revenue targets over the last 12 months.

This was a key finding in the quarterly Alation State of Data Culture Report, which provides an assessment of the progress enterprises have made in creating a data culture. Even as the survey confirmed that data culture is a strong predictor of revenue, in this, our sixth report, we were surprised to see that only 15% of companies surveyed met the criteria for “top-tier” data culture organizations in our Data Culture Index (DCI).

Organizations that do not embrace data culture risk lost revenue and competitive disruption. Taken together, these findings show the revenue growth risk for enterprises that have not yet invested in building a data culture. Furthermore, organizations that do not invest in data and analytics technology also risk disruption by their competition and the market.

Investing in technologies and strategies that support a data culture is essential to overcoming such obstacles. Yet data leaders report their requests for funding in data & analytics projects are often rejected. The report found that just 18% of data leaders expect to receive the necessary funding.

So what must businesses do? As the report firmly states, building a data culture is a business imperative in 2022. And, according to the top-tier companies, a data catalog is an essential element to creating a data culture.

Data Culture Strongly Associated with Achieving Revenue Goals

A top-tier data culture company is one where most or all departments in an organization have adopted all three pillars of data culture: data search & discovery, data literacy, and data governance. As noted, only 15% of respondents qualified as top-tier in this DCI report. The drop, down from 29% in our previous report, may reflect a number of factors. These include the impact of the Great Resignation, a lack of investment in data and analytics technology, or simply a greater awareness of internal shortcomings as companies increase in their data maturity.

Maturity, after all, brings awareness of just how tough big-data management truly is.“As awareness about data culture grows, executives and their organizations are learning how hard it is to build a solid foundation for it,” said Satyen Sangani, co-founder and CEO, Alation.

“Early in the life cycle of this research many either thought they were done or barely acknowledged the problem, whereas today, executives know they have a bigger hill to climb,” he points out. Yet embracing a data culture early on is imperative.

“If these organizations fail to recognize the power of data-driven decision making, and don’t fund data and analytics initiatives properly, at best they’ll introduce significant risk to their organizations; at worst, they will be disrupted by competitors that threaten their existence,” Sangani concludes. As people come to grasp all the nuances of data culture, it’s only natural they should experience a dip in confidence around how their own data cultures stack up.

48% of companies report having few or just one department adopting the three pillars of data culture, making them low-tier data culture organizations. Just 37% of those companies report exceeding revenue goals in the past year, whereas 50% of top-tier companies exceeded their goals. While companies are falling out of the top tier, their lack of a data culture is causing them to miss out on revenue opportunities.

The C-Suite Data and Analytics Investment Strategy Gap

Building a data culture means investing in technologies and implementing strategies that enable data search & discovery, data literacy, and data governance. 98% of data leaders surveyed say their organization needs to invest more in data and analytics to get or stay ahead of the competition.

Executive support can make or break a company’s data culture. When it comes to whether data leaders can expect their C-level executives to make the needed investments, we again see a stark difference between top-tier companies and the rest of the field. Data leaders in top-tier organizations say that they are likely to get most (60%) or all (28%) of the necessary investment. Conversely, more than half (51%) of data leaders at lower-tier organizations say that they’ll receive half or less of the investment in data and analytics needed to stay competitive.

There is a significant gap between data leaders and the C-suite when it comes to understanding the link between data technology investment and competitive advantage. Most data leaders (66%) say that business leadership either does not support or makes empty promises about investment. And 71% are less than very confident that their company leadership sees the link between data and analytics investment and beating the competition.

Companies that don’t invest in data and analytics technology are vulnerable to disruption by those that do. Top-tier companies are more likely to make those investments, which, as we have seen, boosts the likelihood that they’ll meet or exceed revenue goals. Perhaps the most effective data leaders choose their technology tools wisely, and demonstrate their value to their executive leadership. A data catalog is one data and analytics tool with proven, justifiable ROI.

The Data Catalog as a Critical Investment

A data catalog represents one slice of the modern data stack for companies focused on analytics. But it is one that 87% of respondents overall, and 94% at top-tier companies, say is either very important or essential to establishing a data culture. This is a significant jump from our previous report, where 68% of data leaders said the same, reflecting a growing understanding of the value of the data catalog.

Data catalogs allow enterprises to build on all three pillars of data culture. The technology helps companies take what data leaders say are the critical first steps: creating an inventory of existing data, creating data processes, and fixing existing data quality issues. A data catalog also enables self-service data search & discovery, which improves business efficiency, a key driver for data and analytics investment.

Businesses looking to improve the customer experience and enable digital transformation – key strategic goals cited in the survey – can also benefit from investing in a data catalog. From cataloging data migrated to the cloud, to enabling active data governance to protect the most sensitive customer data, implementing a data catalog helps companies find, understand, and trust the data they need for data-driven decision-making.

Setting Data Culture Goals for the Future

As the State of the Data Culture Report has shown, a strong data culture is a leading indicator of a company’s ability to meet or exceed their revenue goals. But what technology do such companies use to foster data culture? Top-tier data culture companies say that a data catalog was either very important or essential to establishing their data culture. A data catalog is a key investment for companies wishing to become data-driven, improve the customer experience, enable digital transformation, and improve efficiency.

Technology is advancing rapidly. What was a top-tier data culture one year ago may be dismissed as mediocre today. Could the power of new tools be outpacing our ability to wield them effectively? And is human self-doubt corroding confidence in the data cultures respondents have built? Perhaps.

And while fewer companies have ranked themselves as boasting top-tier data cultures, we believe it shows that enterprises recognize the importance of cultivating a data culture across all three pillars and throughout the organization. This can be the year of opportunity for those organizations that recognize that building a data culture is essential to revenue growth, and that investment in data and analytics is essential to building a sustainable competitive advantage.