As the pandemic’s impact on European businesses becomes clearer, the region’s data and analytics leaders are rapidly updating their strategies to meet new challenges
‘Uncertainty’ was the prevailing emotion in the data and analytics community when Europe first entered lockdown to stem the spread of COVID-19.
As with any ‘black swan’ event, the situation was a sudden shock to the system, and no one quite knew what would happen next. But as the pandemic’s impact on different industry sectors becomes clearer, data and analytics leaders are starting to look to the future again.
Since the pandemic began, we’ve polled 186 data and analytics leaders from across the globe. Up to May 31, 40% said they were ‘ambivalent’ about the outlook for their industry. But that figure drops to 19% for respondents who took our survey after June 1.
“There was this almost irrational fear in the beginning,” says Wendy Gilbert, Director, Global Data and BI Products at travel company Expedia Group. “Work was, to some extent, the least of your problems. What you wanted to make sure is that you still had food on the table.”
“Now, it’s more focused on the recovery,” she continues. “It’s focused on what really matters to our partners.”
Initial COVID-19 Disruption Starting to Ease
In the immediate aftermath of the COVID-19 lockdown, executives needed timely insights to inform their decisions as they attempted to chart the best path forwards. As a result, many data and analytics leaders found they had to adapt the reports and dashboards they were creating at breakneck speed to meet these new business demands.
“We had to be so much more reactive,” Gilbert recalls. “We used to plan quarterly. Then, when COVID-19 hit, that went to daily planning. Then, from daily, we went to weekly and then to monthly, and we’re starting to get back into a quarterly cycle.”
“In the best of times ‘cancels’ are not a huge part of our business,” she continues. “With COVID-19, of course, cancels were significant, and we had to focus much more effort there than we were used to.”
“We are still yet to fully understand how our roadmap of projects will change moving forward. There are too many unknowns to deal with”Tom Clements, Head of Data Science, Leisure Pass Group
Six months into the pandemic, this initial disruption is starting to pass, and data and analytics executives are starting to think more about the future.
Before July 1, 76% of our survey respondents said the pandemic was disrupting their business, with 46% describing that disruption as ‘major’. Just 30% of respondents have reported major COVID-19 disruption in their organizations since then.
At the same time, data and analytics leaders are now almost twice as likely to report that business is booming. A full 24% of post-July 1 survey respondents say that COVID-19 has resulted in a boost to business for their organizations.
Sectors such as the airline, hospitality and entertainment industries have been particularly hard hit by measures designed to limit the spread of COVID-19 and are still struggling. But businesses in other sectors are now in a position to start planning their recoveries.
Kshitij Kumar, CDO at fashion retailer Farfetch, explains: “Companies who may not have made the data and digital transformation (unlike Farfetch) will now need to quickly become data-savvy and implement the processes, tools and ‘ways of working’ changes that go with becoming a cloud-first data company.”
Data Leaders are Having to do More with Less
Given the huge disruption the COVID-19 pandemic has caused, it should be no surprise that data and analytics budgets are feeling the squeeze.
While 21% of our European survey respondents expect their departments’ budgets to increase in the near future, most are finding that they now must do more with less. In fact, 41% expect their budgets to decrease in the months ahead, with 10% anticipating a decrease of at least 21%.
“COVID-19 has made you further focus on systems you’re supporting that you shouldn’t really be,” Gilbert says. “For example, we have some legacy systems that, when it comes to cutting costs, you can’t cut them because they’re still supporting necessary work.”
“I’m also seeing users asking for data that they’ve never asked for before,” she adds. “The data we need to look at is very different than the data we needed to look at before COVID-19.”
“We have some legacy systems that, when it comes to cutting costs, you can’t cut them because they’re still supporting necessary work”Wendy Gilbert, Director, Global Data and BI Products, Expedia Group
Even among the 38% of respondents who expect their budgets to remain stable, there is a clear need to revisit existing strategies to ensure they are still aligned with wider business objectives. Faced with rising demand for their services and declining budgets, 44% of our survey respondents are searching for opportunities to generate rapid cost savings.
“Team consolidation across data science, reporting and engineering to deliver process efficiencies at a lower cost has already taken place,” reports Tom Clements, Head of Data Science at holiday company Leisure Pass Group. “We are still yet to fully understand how our roadmap of projects will change moving forward. There are too many unknowns.”
“Our strategy already had some simplification built in, but now it’s a much bigger focus,” Gilbert concludes. “How do we get down to where we get one single version of the truth as much as possible, so we don’t have to maintain multiple systems?”
Integrating legacy systems with new technologies has always been a challenge for data and analytics executives, especially at large enterprises. Old technology drives costs up and slows the pace of innovation.
With COVID-19 putting data and analytics spend in the spotlight, we should see organizations taking strides towards modernization and simplifying their data and analytics architectures over the next 12 months.