October 16, 2018
The shipping industry is continuing to move towards what is generally agreed to be a digital future, defined by greater use of data and analytics. The need is unarguable and the drivers are well understood, yet somehow maritime seems to still be short of digital basecamp.
Data from noon reports, Excel sheets and manually-entered numbers are flowing ashore and in some cases ending up in analytics that contribute to understanding fleet performance. The regulatory workload and the risks of non-compliance are increasing, as are the bandwidth required to move the information, yet the dizzy heights seem a long way off.
But the shipping industry need not feel singled out or even unique in having a relationship to big data that is more aspirational than experiential. In terms of truly grasping the opportunities of big data and analysis, it seems that shipping has plenty in common with other industries; a start has been made, some progress achieved, but not everyone is where they want or need to be.
There are even reliably familiar parallels between the challenges of mainstream business in adopting digital and data strategies and those experienced in shipping. A survey of 196 organizations by Gartner showed that 91% of organizations have not yet reached a ‘transformational’ level of maturity in data and analytics, despite this being identified as a number one investment priority for CIOs.
Gartner’s levels of maturity range from one, where data is not exploited if it is used, two, where IT attempts to formalise information availability, three where different content types are still treated differently, four where executives champion and communicate best practice to five, where data and analysis is central to business strategy.
The survey revealed that 48% of organizations in Asia Pacific region reported their data and analytics maturity to be in the top two levels, compared to 44% in North America and just 30% in Europe, the Middle East, and Africa.
Most organizations should be doing better with data and analytics, given the potential benefits, Gartner observes. Those at transformational levels of maturity enjoy increased agility, better integration with partners and suppliers, easier use of advanced predictive and prescriptive forms of analytics – all of which translates to competitive advantage and differentiation.
Organizations reported a broad range of barriers that prevent them from increasing their use of data and analytics but no single reason. Organizations tend to experience a different set of issues depending on their geography and level of maturity, Gartner found, but the survey identified the three most common barriers as defining data and analytics strategy, determining how to get value from projects and solving risk and governance issues.
A fourth problem might be one very familiar to shipping: people. A separate survey – How Big Data and AI are driving business innovation – conducted by strategy consultancy NewVantage Partners found that people challenges loom large as firms seek to build a data culture.
Nearly half of the executives questioned by NewVantage identified personnel challenges as the greatest barrier to being data-driven, with only 20% saying that technology is the issue. A lack of organizational alignment and cultural resistance were reported as the biggest barrier to adoption.
The better news is that companies do continue to derive value from their big data and AI projects – almost three-quarters of respondents said they have already received measurable value from these initiatives.
But the survey seems to prove the maxim that innovation happens at the edges and few firms lead and many follow; just over a quarter of firms questioned are prioritising innovation initiatives – innovation/disruption, speed-to-market, and monetization – and innovation remains an aspiration for most large enterprises.
One of the biggest contradictions of the findings is that while large enterprises in particular fear disruption from external competitors, their own pace of transformation is slow.
Almost four in five respondents said they feared disruption or displacement from firms like those in the fintech sector or firms specializing in big data. AI is considered the most disruptive technology – chosen by almost three-quarters identified it as the disruptive technology with the most impact—far more than cloud computing or Blockchain.
Despite this, a continuing issue is the slow speed with which these established firms make the shift to a data-driven culture. Virtually all respondents say their firms are trying to make the shift, but only about a third have already succeeded at this objective.
Clearly firms need more concerted programs to achieve data-related cultural change and many start-ups have established data-driven cultures from their beginning, which is a key reason why firms fear disruption by them.
One of the approaches that firms have adopted in response is to establish new management roles; every year, the percentage of firms with Chief Data Officers rises.
However, there is still a lack of clarity about how different data-oriented roles relate to each other and even what types of backgrounds are appropriate for a CDO. The CDO is a new corporate role, and as such, there is evident confusion and disagreement on the mandate and importance, NewVantage said.
While the findings of any survey are a matter of interpretation, they are another blow to shipping’s persistent sense of exceptionalism. The opportunities for greater efficiency clearly exist and the desire to save costs and lift margins are just as obvious. The critical factor – and a bigger challenge – may be that the data part is relatively easy. Instead it’s the culture that needs to change.