Only 38% of organizations trust insights from D&A

There's no doubt that data and analytics (D&A) has become a resident member in an organization today. However,  do organizations really  trust and depend on it?

 

KPMG International commissioned Forrester Consulting to examine the power of trust in data and analytics (D&A) in more than 2,000 organizations from around the world. 

 

The report shows that organizations do not fully trust their analytics. Only 38 percent have a high level of confidence in their customer insights. And only a third seem to trust the analytics they generate from their business operations. Yet the vast majority say these insights are critical to their business decision-making. 

 

 

 

While trust in D&A is a significant challenge for organizations, the study claims that a few seem to be talking openly about it. It highlights the trust gap that threatens every organization.The study recommends four key drivers for this growing interest in trust:

 

 

1. Analytics are becoming increasingly integral to business decisions

 

The study confirmed that D&A is now central to business decision-making, particularly in areas that drive new  growth, improve productivity and manage risk, particularly fraud. Of the organizations surveyed, 50 percent say they have adopted some form of predictive analytics and 49 percent say they use advanced visualization, beyond traditional static charts and graphics.

 

2. Lives depend on analytics

 

Organizations that target consumers based on inaccurate predictions, for example, will quickly erode (if not extinguish) consumer trust and shake the confidence of those executives who rely on these predictions to make informed decisions. 

 

3. ‘Black boxes’ are hard to trust 

 

Algorithms are not physical machines you can pull apart. Indeed, the internal workings of algorithms and models are largely hidden. Even within organizations, most analytics are effectively ‘black box’ systems that are too opaque to be verified by most individuals.

 

4. Use of D&A increases reputational risk 

 

Organizations recognize the link between their analytics. There are clear commercial risks if customers, reputations and their use of D&A. In fact, 70 percent of investors or regulators do not believe D&A is being used in a way that is considered valuable or appropriate. In fact, 70% of the respondents say that by using data and analytics, that is considered valuable or appropriate, for example, expose themselves to reputational risk.