Oreščanin: Data is the Fuel of the 4th Industrial Revolution

An increasing number of companies depend on data, but there are still many that do not yet realize this. We are particularly lagging in using data in creative ways. What are the advantages and what is the value of data for companies, and how much are Croatian companies investing in data science, reveals Dražen Oreščanin, Director of Business Intelligence and member of the Organizing Committee of Data Science Economy conference taking place on May 17 and 18 in Zagreb.

What is essentially a Data Driven organization?

Digital transformation of business has already deeply affected the entire global economy, and everything digital is based on data. By analyzing information obtained from data, companies can better understand the needs and behaviors of users and tailor their product and service offerings to the actual needs of individual consumers. Data Driven organization uses data not only to understand its users and its business but also to identify or create and leverage new market opportunities or even create a new market or niche.

What is the value of data for a company today?

The value of data for every company is extremely high, but still, a large number of companies do not fully realize how much their business already depends on data, especially how much it will depend in the near future. We can safely say that data is the fuel of the fourth industrial revolution, and its significance and value will continue to grow year by year, and the focus on data privacy will also become increasingly important.

Do Croatian companies today have a good strategy for using data?

A very small number of companies in Croatia are focused on using data. The leading companies in data usage are large telecoms and banks, which have the largest and most diverse sources of data. There are a few other industries in the world that use diverse data in creative ways, which are not common in Croatia due to the insufficient maturity of the market. These primarily include leading global IT companies like Google, social networks like Facebook and Twitter, and e-commerce giants Amazon and Chinese Alibaba. Many large cities and utility companies use data for better traffic management and advanced services for citizens, and pharmaceutical companies also use data and analytics, especially in the area of developing new drugs and clinical research. Retail and distribution are also major users of data and analytics.

Do business leaders today use data for making business decisions? How many companies in Croatia have developed a system for accessing up-to-date data on which they make decisions or to accurately create business forecasts?

They generally do, but primarily in the Enterprise segment, namely the aforementioned large banks and telecoms, as well as large companies like Atlantic Group or Orbico. Medium-sized companies generally have quite basic reporting systems that mostly meet their needs, which are often not large and complex. Overall, investment in IT in Croatia is relatively low compared to leading economies, so investments in analytical systems are not large either.

Can the ability to extract value from data enable companies to be innovative and competitive?

Certainly, it can; the most powerful corporations today are based on business models that strongly or entirely rely on data collection and analysis. However, it should be realistic and emphasize that for companies like Google or Amazon, data collection and usage is their main business, while for most companies, data is a “catalyst” that enables them to achieve better business results through increased revenue or reduced operating costs.

A recent study on the European market shows that by 2020, the total value of data economies in the EU is expected to reach 739 billion euros, with a total impact of 4% on the EU GDP. Can this reflect a stronger role of digital innovation and higher overall investments in the ICT sector that primarily enables these innovations?

The IT sector has two roles. The first role is to serve the entire industry with IT solutions needed for business management and improvement. The second role is to design innovative solutions that change our daily lives. The amount of investment in research and development is almost always proportional to the results that arise from such innovative processes and find their way to the market. Croatia should certainly be much better at drawing funds from EU funds for financing innovative projects, as the industry unfortunately generally lacks free and available funds for such projects.

Which sectors in Croatia do you recognize as those that invest the most in data science?

The aforementioned telecoms and banks, and it is certainly worth mentioning the media, where Styria has a very high-quality team of data scientists working for the entire group. Digital agencies also invest a lot in the field of analytics and data science. Additionally, Business Intelligence and other Croatian IT companies have experts who deal with both data management and preparation (data engineering) and data science, and our services and solutions are used by companies from many other countries in Europe and the world. The demand in the global market is high, and it can be said that our services in this area are a very good and quality export product.

What are the basic prerequisites for a company to become a Data Driven organization?

The first and basic prerequisite is that the company understands that digital transformation is a necessity for survival and development in the market, which naturally requires understanding and vision from management. The second prerequisite is that the company has and is willing to invest certain financial resources in this area. The third prerequisite is that there is internal knowledge within the company that will enable changes or awareness that knowledge does not exist, and that it is necessary to engage someone who possesses knowledge. The fourth prerequisite is setting clear and achievable goals. Everything else after that is a matter of realization.

How high is the demand from companies for experts, regardless of whether they are looking for employees with specific skills or specialized companies in that area? Does supply exceed demand or vice versa?

The demand is extremely high worldwide and far exceeds supply, and it is estimated that in the world in the next few years there will be about five million unfilled jobs for data experts. What is important to emphasize is that there is an increasing demand for data management (engineering) experts compared to data scientists (science), due to the increasing amounts and diversity of data that need to be collected and processed to be in a format suitable for analysis.

Can a person in Croatia be adequately educated to become a data scientist?

Yes! From this year, the Algebra College has launched a data track for its master’s program, which has enrolled about fifteen students from the first generation. The program has a very high-quality curriculum, and the best professional lecturers from Croatia in this field are engaged in the program. FER is also preparing a Data Science track, although there are already quite a few elective courses in the master’s program that are very useful for acquiring knowledge about data science. However, the most important thing is practical experience. This is why we organize the BIRD Academy every year at Business Intelligence. In this two-month intensive program, each year about fifteen selected graduates from Croatian studies undergo training with the methodologies and tools we use, thus preparing for a consulting career at Business Intelligence. We have been running the Academy since 2013, and the participants of the first generation are now leading consultants at Business Intelligence who manage numerous complex projects for our clients in Europe and the USA, and some of them are also lecturers at Algebra.

What does this year’s Data Science Economy conference bring and why should we participate?

This year’s conference emphasizes the “data driven” approach to the modern economy, and I think it establishes a balance between the fields of data science and data engineering, and that the time has finally come to break the mystique surrounding the term data science. There will be many presentations on practical cases (IoT, Smart City, clinical research, communications…) and many innovative ideas. We will also have a section dedicated to education in this area. The first day will be more business-oriented, while the second day will feature technical workshops. In any case, the conference is again this year the central place where everyone interested in working with data should be, and there are more and more of them year after year.