Audio Quick Take: Dell Technologies’ Arthur Lewis on How Mid-Size Businesses Can Become Data-Ready
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Julie Devoll, HBR
Welcome to the HBR Quick Take. I am Julie Devoll, Editor of Special Projects and Webinars at HBR. Today, we are joined by Arthur Lewis, President, Global Infrastructure Solutions Group, Solutions and Portfolio Management, at Dell Technologies. Arthur, thank you so much for joining us today.
Arthur Lewis, Dell Technologies
Thank you, Julie. It is great to be here.
Julie Devoll, HBR
Tell us a little bit about the Data Paradox research that you have done.
Arthur Lewis, Dell Technologies
Dell Technologies commissioned a study with Forrester that sought to dig deeper on the subject of data management, serving over 4,000 leaders around the world on their data management strategies. These leaders were spread out around 40 locations throughout the world. The data management study really pulls back the cover on the dichotomy that data can be both a burden, in terms of being very problematic and creating a barrier to digital transformation, and also a business’s greatest asset. Whether it is the former or the latter really depends on how data ready a business might be.
That is the crux of the data paradox. The Forrester study also captured many everyday data paradoxes in business that we are shining a light on. There are three topics that really came out in this study: First, businesses believe they are data driven, yet many are not treating data as capital and not prioritizing its use across the organization. Second, about 70 percent of midsize businesses are gathering data faster than they can analyze and use it, yet they are constantly in need of more data than their current capabilities can provide. Third, most businesses recognize that a cloudlike service model will enable them to be more agile, provide scale, and reduce complexity, yet only a minority have made the transition. Those are the big takeaways from the research.
Julie Devoll, HBR
What did the Data Paradox reveal about the barriers organizations are facing with digital transformation?
Arthur Lewis, Dell Technologies
We run another index called the Digital Transformation Index, which is a Dell Technologies proprietary biannual survey of 4,000 customers around the globe. In that, we have discovered that data overload and the inability to extract insights was the third-largest barrier to transformation, up from 11th place back in 2016. We believe that the volume, velocity, and variety of the data will only become more challenging as data proliferates in the on-demand economy that has been brought about by a new wave of data-first, data-anywhere businesses, as well as home exercise equipment, online streaming, virtual doctors’ appointments, and remote learning, just to name a few use cases.
These data-first, born-to-scale businesses are using digital deliveries, digital technologies delivered via an as-a-service operating model to scale, pivot quickly, and meet business outcomes faster. They are data-driven businesses that pay for only what they use, so telemetry data becomes an incredibly valuable asset. These businesses create and capture an immense amount of data. Their IT infrastructures use this data to provision their businesses accurately, flexibly, and dynamically.
These companies are the bedrock of a burgeoning, on-demand economy that is awash with data. They are primed to turn data into an advantage. However, as the research has shown, the more manual, less data-ready firms will struggle under the weight of so much data, given the expectation to generate, collect, clean, analyze, store, and put so much data to good use in real time. At the end of the day, it really comes down to being data-ready.
Julie Devoll, HBR
What does data readiness really mean?
Arthur Lewis, Dell Technologies
There is no doubt that we are living in the data era. In this wonderful world of data, as I like to call it, we are going to see an explosion of data. There are about 35 zettabytes of data that exist in the world today, and over the next four to five years, that is going to grow to about 175 zettabytes. For those who are not familiar with how big 175 zettabytes are, I will give you a visual— Imagine 68 stacks of DVDs that span from the Earth to the moon. That is an incredible amount of data.
Adding to that is the complexity that more than half of that data is going to be created outside of the traditional data center or at the edge. These dynamics are leading to a distributed hybrid multi-cloud world of interconnected infrastructure. This study that we commissioned measures respondents’ readiness for this explosion in data by scoring initiatives to advance their data culture and skills as well as their technology and processes. It is important that businesses not focus only on technology and processes while neglecting culture and skills, or vice versa.
The scoring is extremely helpful to us because it helps us gauge how businesses are truly faring given the gap in perception. We found that two-thirds of businesses say that they are data-driven and that data is the lifeblood of their organization. However, quite paradoxically, only 13 percent of the same data set say that they treat data as capital and prioritize its use across their businesses today. Data readiness is about shifting IT operations from infrastructure speeds and feeds to outcomes, or what technology can deliver and how it differentiates businesses from competitors in their industries. This data readiness occurs when customers can harness their data and freely move it around the globe simply, securely, and at speed, and are able to draw insights from wherever the data may reside.
Julie Devoll, HBR
What does it mean to be a data champion? Do you see midsize companies getting there in the near future?
Arthur Lewis, Dell Technologies
Data champions strike the right balance between building and developing a tech-savvy team of enthusiasts while also investing in technology and process. It is not “either or,” it is both of those things. For example, these companies that have data champions are leveraging multi-cloud environments, deploying machine learning to automate anomaly detection, and looking deeper into the performance stack to rearchitect how they process and better utilize the data that they have.
Consequently, they are getting better-quality data and more useful insights from that data. They are also equipping and incentivizing their workforce to innovate with data and analytics, recognizing that without a team of data-savvy enthusiasts to use the data or the insights and treat them as capital, the quality of the data will not be what it could potentially be. Reaching data readiness and realizing the real value—we refer to this as time to value.
This time to value is about turning data into real-time insights, powering new levels of automation, and empowering people around the world to achieve more than ever before. Those companies that have digital transformation strategies will get there, and those that do not, will not get there.
Julie Devoll, HBR
What should midsize companies be doing to continue their digital transformation paths to becoming data-ready?
Arthur Lewis, Dell Technologies
It was clear not only from the survey but also from many conversations that I have with customers that a lot of these businesses still struggle with data silos. There are technologies and processes that can fix that. Business silos are altogether a different beast. About 50 percent of midsize firms say that they are held back by these silos, and yet only 18 percent of these companies are running initiatives to promote the democratization of data.
To resolve this struggle, businesses need to examine their business processes and people, which encompass the strength of their workforces, data skills, and data culture. Sixty-eight percent of these midsize firms admit that they are not setting data-driven personal development targets, and only 15 percent are incentivizing employees to innovate with data and analytic processes, which explains why almost half report that data savviness of their people has plateaued or reduced.
Businesses are feeling the effects of these skills gaps. Sixty percent of midsize firms call out insufficient in-house data science skills as a barrier to capturing, analyzing, and acting on data. Fifty-five percent say that they are held back by insufficient technical skills, and just 19 percent are actively recruiting data scientists and/or software developers. Businesses can resolve these issues only with strong data leadership. The research suggests that is lacking now. Twenty-five percent of midsize firms have appointed a chief data officer, but 70 percent of those have not taken steps to ensure their visibility supports the company’s data and analytic strategy.
If these companies focus their IT spend on a complete portfolio that can truly meet their needs, as well as end-to-end and technology partners that are aligned to this advantage, they will become data-ready. It is about taking advantage of the highly integrated solutions that digital transformation demands, namely intelligent business operations, modern data pipelines, cloud operating models, and flexible consumption options.
Building on this data readiness, shifting IT operations from infrastructure speeds and feeds to outcomes will drive business and differentiate these companies in understanding how technology can enable them.
Julie Devoll, HBR
What are some of the key technology investment areas they should focus on to prepare for the data-driven future?
Arthur Lewis, Dell Technologies
Broadly, I think there are three ways that businesses can turn their data burdens into data advantages. We talked about this a little bit in the answer to the previous question. First is focusing on infrastructure that helps them modernize IT operations. There are four key things to look for here: one, infrastructure that scales adaptively to workloads; two, self-driving systems that simply work together, independently enabling rapid transformation of productivity; three, seamless data services, the plumbing of modern data pipelines for the data era; and four, resilient trust, which is, simply put, ensuring that their infrastructures are incredibly secure.
The second way businesses can turn their data burdens into data advantages is by designing a modern IT infrastructure that meets data where it lives, whether at the edge, at the core, or in the cloud. This incorporates bringing business infrastructure and applications closer to where data needs to be captured, analyzed, and acted on while avoiding data sprawl by maintaining a consistent multi-cloud operating model. Having a singularly focused, repeatable architecture that optimizes the portfolio for all locations, including the ever-growing edge, is essential to data readiness, and deriving the most value from your data where, when, and how you want.
Underscoring this, at present just 36 percent of midsize firms are looking to increase the number of POCs, or proofs of concept, for data uses at the edge, and a mere 27 percent of midsize respondents are processing priority data at the edge. Clearly, there is a lot of work to do here.
The third way businesses can make data burdens advantageous is by optimizing data platforms so data can flow freely and securely while being augmented by technologies like artificial intelligence and machine learning. In the next one to three years, 47 percent of midsize firms plan to use multi-cloud environments, and 69 percent intend to deploy machine learning to automate anomaly detection. This will help immensely in developing software to deliver the personalized and integrated experiences that customers crave.
Currently, most midsize firms have not been able to improve on their progress in gaining a deeper understanding of their existing customers, target and audience. So, there’s clearly more work to be done here. You want to make sure you are working with a partner that has taken the proper steps to modernize its portfolio and really focus on outcomes across all infrastructures, whether they are compute, storage, data protection, or hyper-converged.
Julie Devoll, HBR
What are the areas of opportunities that midsize companies need to home in on to grow and lead their industries in the future?
Arthur Lewis, Dell Technologies
A fantastic opportunity exists around enabling a digital-first experience that is consumed flexibly and increases IT’s agility and control. Midsize companies can drive leadership by enabling a cloud operating model that is adaptable to their businesses and outcomes, and quickly and easily take advantage of data readiness and simplify their IT operations overall. Though only 22 percent of midsize businesses have moved most applications or infrastructures to an as-a-service model, there is a general awakening to the benefits of taking an on-demand approach.
Firms perceive top benefits to be a high level of adaptability, the ability to scale quickly, and the ability to provision applications immediately or without complexity. For example, we found that 62 percent of midsize respondents believe these benefits would enable them to be more agile. Two-thirds see the opportunity to scale to changing customer environments, and about 60 percent forecast business would be able to provision applications quickly and simply with just the touch of a single button. We are seeing the realization shape their one-to-three-year plans, and 57 percent of these companies intend to move to a data-as-a-service model within that period. With the right interventions and course corrections, it is very possible that the 64 percent of midsize businesses that have a plan to modernize their data will find success.
Julie Devoll, HBR
Arthur, this has been a great discussion, and I want to thank you so much for joining me today.
Arthur Lewis, Dell Technologies
Julie, thank you so much for having me.
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