Since 2022, Dresner Advisory Services has researched how significant external forces impact organizations (see the Research Insights “Data Leaders Need to Prepare for the Challenges That External Forces Will Pose” and “Mitigate Short-Term Negative Economic Impacts and Pivot for Growth by Investing in BI and Analytics”).
Our most-recent data from the second half of 2024 show (once again, and by a sizeable margin) that economic uncertainty most frequently hindered organizations (58 percent reporting significant or moderate negative impact—down 2 percentage points year over year). That high mark was followed (once again) by staffing and recruitment (46 percent indicating significant or moderate negative impact—down 7 percentage points year over year). Two new survey responses—cost of capital and security issues—were added in 2024. Organizations cited cost of capital next most often as an impediment (with 40 percent ascribing it significant or moderate negative impact).
Although year over year the average frequency of negative impact and no impact responses fell, and the average frequency of positive impact responses rose, the averages did not change by much—no more than 2 percentage points across all responses. That narrow range of difference indicates that many organizations begin 2025 needing to deal tactically with ongoing impacts related to economic uncertainty, staffing and recruitment, and the cost of capital, while also preparing their organizations to execute and win as impacts from external forces likely continue to play similar roles throughout the year.
Data leaders should use our external forces data and its business context to stress with executive leadership the ongoing need to invest in data and analytics and emphasize data-driven decision making. Many organizations expect to prioritize data and analytics in 2025, with 69 percent reporting plans to increase their investments in this area (see the Research Insight “Drive the Right Investments During This Peak of the Data and Analytics Investment Cycle”).
Our most recent external forces data provide additional evidence supporting the case for increased investment in data and analytics. Regarding the external force most frequently cited as having negative impact—economic uncertainty—organizations at the highest level of data and analytics excellence (that is, indicating the highest level of success in their business intelligence (BI) initiatives) have the highest weighted mean score (that is, the least negative impact). In fact, these organizations report the highest weighted mean scores in almost all categories of external forces (except for security issues, for which they report the second-best score).
In short, organizations with solid data and analytics foundations that power BI excellence repeatedly show the best ability to mitigate external forces, regardless of how or whether their relative priorities change. Successful BI initiatives provide strategic advantages just when many of their organizations need them the most. Therefore, data leaders that have not already done so should build for their executive teams a narrative—grounded in the fundamentals of data management and advanced analytics—that emphasizes how successful application of BI helps offset negative impacts due to external forces, better positions organizations to take advantage of potential opportunities stemming from external forces, and ultimately provides organizations with a source of ongoing strategic advantage.
Organizations need to continue to invest more in BI and analytics, and not cut or freeze programs, to ensure they successfully leverage data and analytics to offset and navigate uncertainties and negative impacts related to economic uncertainty in the short term, while also positioning themselves to better understand changing business landscapes, improve operational execution, and grow in 2025.
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