CEOs globally to bolster spending on data analytics and cyber security

12 October 2016

Digitalisation has the potential to reduce costs, improve efficiency and unlock new areas of value. It may also come with new risk and new costs. In a new survey of CEOs, a trend towards increased digitalisation is marked, while concerns around cyber security risks too come to light.

In its latest Global CEO Outlook, titled ‘Now or never’, professional services firm KPMG explores the opinions of almost 1,300 CEOs about the outlook for their businesses in the mid-terms. The CEOs are from businesses across ten countries and stem from 11 industries, with the majority of companies generating revenues in excess of $1 billion.

Top CEO concerns

When asked about the top concerns CEOs have for the coming three years, customer loyalty and the impact of the global economy on their company are both cited by 88% of respondents. 86% of CEOs also cite concern about lacking the time to think strategically about the forces of disruption and innovation shaping the future of their companies, with a range of new challenges – from cross-border activity from tech giants to startups that come to cause industry wide disruption. Businesses also face challenges (say 86% of respondents) from changing wants/needs of millennials, both as consumers and as employees, whose personal values come to challenge business values. The fifth most cited concern from respondents comes from the direct competition finding ways to take market share.

Top CEO concerns

Cyber priorities

In terms of the top five strategic priorities for companies over the coming three years, fostering innovation comes in at number one cited by 21% of respondents. A strong focus on clients takes the second spot, cited by 19% of respondents, while implementing disruptive technology was seen as the top priority for 18% of respondents. Talent development and management is cited by 18% of respondents, while a strong focus on marketing, branding and communications came in fifth at 17%.

The top five areas of investment over the next 3 years, includes a number of digital and technology related areas. Top of the list is increasing data analysis capabilities, cited by 25% of respondents, followed by new product development, cited by 24% of respondents. Cyber security solutions is cited by 22% of respondents, while the measurement and analysis of customer experience and needs is cited as important by 21% of respondents. Geographic expansion within the home country was seen as important by 20% of respondents.

Top five strategic priorities

According to respondents, one of the main reasons (cited by 44% of respondents) for leveraging data and analytics (D&A) technology, is to drive process and cost efficiencies. Driving strategy and change too rated highly (by 44% of respondents), while finding new customers comes in third at 43% of respondents. Developing new products and services is cited by 43% as the reason to leverage D&A.

Cyber risks

Increased focus on digital technologies, from data collection to its analysis, as well as digital transformations of processes, comes with risks – 30% of respondents note that cyber security risks rank in their top five concerns. Regulatory risks come in second, at 28% of respondents. Emerging technology risks are cited by 26% of respondents, while 25% of respondents are concerned about strategic risks. Geopolitical risks are cited as a concern by 24% of respondents.

The top uses of data and analytics

Cyber preparedness 

In terms of actual risks, related to respondents from different global regions, a mixed bag was disclosed by the study. In ASEAN countries the biggest cited risk (by 34% of respondents) are related to operational risk. In Brazil, East Africa, Mexico and South Africa cyber security risks are cited as a problem by 40%, 50%, 38% and 32% of respondents respectively. In Ireland and South Africa, regulatory risk feature at 35% and 32% respectively, while in Canada and Mexico, environmental risk is cited as the top risk by 32% and 38% respectively.

The rise of cyber security risks, with more than 500,000 incidents per day and up to $400 billion per year in damages, sees companies scramble to defend their respective (and ever expanding) digital frontiers. Digital transformations, while sold as creating a host of opportunities, from acquiring new customers to delivering cost savings, also come with addition costs – particularly in terms of cyber security risks, cyber insurance and the cost post of hiring external or internal teams to secure in so far as that is possible – the businesses digital domain. When asked about how prepared companies are for a cyber event, a mixed bag of responses were recorded across regions.

Top five growth regions

In ASEAN and Switzerland the fewest respondents state that they are not prepared for a cyber event, at 58% and 50% respectively. In East Africa the largest number of respondents say they are not prepared for a cyber event, at 98%, followed by Taiwan, at 92%. 87% of Canadian respondents say that they are not prepared, while 84% of Irish respondents say that they are not prepared.

Related recently released CEO studies:
CEOs with outsider mind-sets more likely to make better decisions (by McKinsey & Company)
CEO turnover at a record high, outsider executives gaining terrain (by Strategy&)
PwC: CEO confidence in business growth drops slightly (by PwC)


How data insights helped Network Rail improve the South-East route

11 April 2019

Amey Consulting has leveraged data insights to assist Network Rail with the improvement of its South-Eastern route. Using the Quartz tool, which monitors train movement, Network Rail will now be able to commit to data-enabled interventions to quickly improve underperforming train stations.

With rail services in the UK coming under strain from the demands of modern commuter life, while the infrastructure and service delivery of the nation’s railways has come in for sustained criticism in recent years, a period of regeneration is on the cards at last. Network Rail is the owner and infrastructure manager of most of the railway network in Great Britain, and has subsequently tapped the consulting industry on a regular basis to help find areas of improvement.

The group recently drafted in consultancy BearingPoint to conduct a thorough organisational evaluation and advise Network Rail (High Speed) on attaining a ‘fit for purpose’ organisational standard – for which the consultancy was nominated at the 2019 MCA Awards. Meanwhile, ArupArcadis and Aecom have been contracted to help Colas Rail and Babcock Rail implement a decade-long framework for Network Rail, aimed at supporting the delivery of the next generation of rail systems, with the contracts said to be worth as much as £5 billion

How data insights helped Network Rail improve the South-East route

As Network Rail further aims to improve its performance and customer service offering, another area it has sought help from the consulting sector for is its South-East route. The network of railways connects London with the southern parts of the country, as well as with Europe, making it the busiest in the country, with more than 500 million passenger journeys per year. This crucial expanse of rail was plagued with small minute delays, which were impacting millions of passengers every day, while reducing the efficiency and capacity of the overall network – something Amey Consulting was selected to help solve.

Amey Consulting soon determined that with the sub-threshold delays to services only lasting for 1 or 2 minutes, most were not the subject of detailed root cause analysis, and this made their corrections almost impossible – with dire consequences. Without addressing these delays, passenger satisfaction would fall, while the capacity and efficiency of the network would be reduced, stinging the income of Network Rail even before a host of delay-related fines would hit the company.

In order to help the client gain a better understanding of where, how, when and what these small delays occur, Amey Consulting looked to demonstrate the value of data-led consulting, with a significant reduction in delays within the first month of rolling out changes to key stations. The consultants embedded themselves in Network Rail’s team, helping them learn the key skills needed to support and apply data-driven solutions.

Agile transport

This involved the deployment of the Quartz tool. The system utilises to-the-second train movement data to present the performance of individual stations across the South-East route. It allows users to effortlessly understand station performance with a high level of detail, and use this information to identify losses caused by small-minute delays. The granular data allows for targeted actions to drive efficiency savings and performance improvements. More importantly, it allows users to understand the impact of small process changes on performance. 

Steve Dyke, an Executive Partner at Amey Consulting, said of the project, “We looked to identify the physical root cause on the infrastructure, building a case for change then managing that project implementation and tracking the benefit/value.  In doing so we are working to define a data performance improvement service to the operational and infrastructure owners.”

Just as important for the project as the technology, however, was teaching the Network Rail team how to leverage it after the consultants were gone. The Amey Consulting team worked to develop an agile working culture within Network Rail’s South-East division, helping staff to be confident in using data to improve the journeys of millions of people per year by attacking the problem from the ground up.

Dyke concluded, “This is less about the tools and about the approach to managing performance.  It meant using by-the-second analysis, data science, and then agile development to visualise and identify areas where improvements can be made.  We then worked with NR to change the way they approached the management of the infrastructure changes.  So rather than pass the information down the value chain, any of which could have been missed, we managed the change end-to-end.”

The project was so successful that Amey Consulting was also among those honoured at the recent MCA Awards. The firm scooped the Performance Improvement in the Public Sector prize for its work with Network Rail, at the 2019 ceremony in London.