Poor understanding, inadequate valuing and mismanaging data is costing firms billions of dollars every year, according to a report published today by Anmut,

The Data Leadership Report, which compiled data from around 100 Chief Data Officers from organisations found that 91% of business leaders believe data is critical to the success of their businesses.

However, only one in three (34%) said that data assets are managed with the same disciplines as other areas of their business.

Many of these firms spend their allocated data management budget on creating value from their data, which helps them scale their businesses and develop their strategies.

The remaining two thirds (66%) are using half of their data budgets to fix problems and errors identified within the data itself. According to the report, the average global business spends between 4% and 7% of annual operating expenses on managing its data. For a global financial services brand, that amounts to as much as $1.5-3 billion annually.

“Time and again we’re seeing international businesses and household name brands coming under fire for reasons that seem preventable with hindsight,” says Herman Heyns, CEO of Anmut.

“Those that succeed do so because they really understand the value of their data, and therefore prioritise and manage it well,” he said.

Three-quarters of respondents (76%) say their businesses are investing in large-scale data and digital transformation strategies, whilst 63% say data is more critical than technology to achieve business transformation.

Yet, Anmut’s report also finds that technology investment regularly overshadows data investment. Technology gets three times the attention (73%) and five and a half times (88%) the budget as data. This is in spite of the fact that technology is dependent on reliable data to run well.

Heyns added: “The preference to invest in technology over data throws up a fascinating question about what digital transformation really means for businesses all over the world. Digital transformation is a term that’s used everywhere, in every annual report and corporate strategy document.

“Digital transformation is what companies do to become data-driven. The advances many companies make might be digital in name, but to create the transformation they’re aiming for, they cannot lose sight of the data.”

Chief Data Officers interviewed for the report regularly cite the challenge to make data something that everyone in their businesses understands, values and knows how to manage.

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Peter Jackson, Chief Data and Analytics Officer (CDO) at Exasol, said: “The ability to effectively manage and analyse data can be the difference between success and failure for a business.

“Collecting data is one thing, but if insights aren’t being gathered and applied to make positive business transformation then it’s largely meaningless.

“Forrester states that a CDO is present in 89% of companies that have systematically harnessed data to improve their differentiation in the market and invested accordingly.

He continued: “As part of this, enterprises also need a coherent data analytics strategy in place to reach the full potential of what they can do with data. Developing a clear data strategy and data-driven culture led by CDO must come first, as this avoids a disjointed approach to data and prevents employees from feeling disillusionment or distrust in business processes.”

In March, the UK’s Department for Digital, Culture, Media & Sport (DCMS) published its Increasing Data Access across the UK Economy report, in which they commit to creating a framework within which the government may have the ability to make interventions into private and third sector organisations to unlock the full value of their data.