In today’s fast-paced business environment, unstructured data is everywhere. By 2025, it’s estimated that 80-90% of all enterprise data will be unstructured (IDC). While most businesses focus on structured data to guide decisions, unstructured data holds untapped potential. It provides valuable insights into operational challenges, explains the “why” behind certain trends, captures the true sentiments of customers and suppliers, and reveals hidden risks and opportunities.
Why Unstructured Data Should Not Be Overlooked
Unstructured data is not just a collection of disorganized bits; it offers actionable intelligence that can drive smarter business decisions. Here’s how:
Uncovering Operational Bottlenecks
In day-to-day operations, the real issues often surface in unstructured communication channels like Slack, Teams, or emails long before they appear in formal reports. Monitoring these channels can reveal emerging bottlenecks—whether it’s a confusing new process or an outdated tool—that, if addressed early, can prevent costly inefficiencies down the line.
Getting to the “Why” Behind the Data
While structured data can tell you that a supplier’s on-time delivery rate has dropped, unstructured data—like email exchanges—can explain why. For instance, email threads may reveal an ongoing issue with invoice reconciliation. The structured data points to a symptom; the unstructured data provides the underlying cause.
Understanding True Customer and Supplier Sentiment
Structured data gives you facts (e.g., a support ticket was closed late), but unstructured data—such as emails or customer chats—helps you understand the context and sentiment behind the situation. It’s the difference between knowing a metric is poor and understanding how a customer feels about it, which can be crucial to managing relationships and reputation.
Identifying Hidden Risks in Contracts
While a contract’s structured data might include details like renewal dates and value, the unstructured text often holds critical information that can create risks, such as confusing clauses or auto-renewals. These hidden elements are easy to overlook in traditional systems but could lead to significant financial leakage if ignored.
The Risks of Ignoring Unstructured Data
Failing to manage unstructured data properly can lead to a variety of negative outcomes for businesses, including burnout, compliance failures, missed revenue, and strained supplier relationships.
The “Human Swivel Chair” and Employee Burnout
Many companies invest heavily in systems like Workday and Salesforce but fail to connect them effectively. The result? Employees are forced to play the role of human integrators, constantly hopping between emails, spreadsheets, and legacy systems to reconcile data. This manual, repetitive work can quickly lead to burnout, especially when skilled professionals are bogged down in low-value tasks instead of focusing on solving real business problems.
Compliance and Audit Failures
When important operational decisions, like approving a non-standard payment term, happen in emails, they become difficult—or impossible—to audit. This “dark matter” of decisions can introduce serious compliance risks, leaving your organization exposed to fraud and legal penalties. A simple “I think someone approved it in an email” response during an audit is a recipe for disaster.
Direct Revenue Loss
In industries like healthcare, unstructured data can directly impact revenue. For instance, an email request to add a new medical device to the billing system can easily get lost or delayed, leading to unbilled revenue. Over time, these missed opportunities can cost millions.
Damaged Supplier Relationships
If a supplier’s invoice is rejected due to a data mismatch, the process to resolve the issue is often manual and time-consuming. For example, an employee might have to dig through multiple systems—such as an ERP and a document management system—while also reviewing email communications. Delayed payments can harm supplier trust, strain partnerships, and even lead to worse pricing or service in the future.
How AI Helps Leverage Unstructured Data
AI is the solution to making sense of unstructured data. It can analyze disorganized information that was once too complicated to process, helping businesses extract valuable insights from emails, contracts, PDFs, and even images.
AI Understands Intent, Not Just Keywords
Traditional search tools can look for specific keywords like “invoice,” but AI goes much further. Using technologies like Large Language Models (LLMs), AI can understand the broader context, such as recognizing frustration in an email about a recurring invoice issue. This deeper comprehension allows AI to route workflows differently, ensuring that critical issues are addressed promptly.
AI Connects the Dots Across Systems
AI’s real strength lies in its ability to bridge disparate systems. It can pull data from emails, extract relevant information like PO numbers, cross-reference it with ERP records, and even check contract terms stored in separate systems—all within seconds. This cognitive “reconciliation” process eliminates hours of manual work and drastically reduces the chances of human error.
Codifying Tribal Knowledge for Automation
In many organizations, how to handle complex data issues is often stored in the heads of a few key employees. AI can externalize this expertise by observing how senior analysts manage exceptions. It then builds a set of rules that can be scaled across the entire organization, making valuable knowledge accessible and automated.
Challenges in Managing Unstructured Data
While AI offers a powerful solution, managing unstructured data remains a complex challenge due to its sheer volume and variety.
The Scale and Variety Problem
The global data landscape is growing exponentially, with IDC predicting that the datasphere will reach 163 zettabytes by 2025—ten times more than the 16.1ZB of data generated in 2016. Unstructured data, in various formats like PDFs, images, emails, and chats, is overwhelming. Traditional ETL tools, designed for structured data, simply can’t handle this level of complexity.
The Context Trap
A single piece of unstructured data is often meaningless without the surrounding context. For instance, an email asking about an invoice status can’t be answered without looking up the corresponding purchase order in the ERP or checking the receiving status. This manual context-gathering process is time-consuming and slows down decision-making.
The “Last Mile” Automation Gap
While existing automation platforms can connect structured data systems, they struggle with the messy start and end points of the process. AI can bridge this gap by interpreting emails, processing the unstructured data, and triggering actions across systems—no human intervention required.
How Leaders Can Take Control of Unstructured Data
To unlock the value of unstructured data, leaders must take a deliberate approach and start with a targeted strategy.
Identify the Pain Points
Rather than trying to tackle everything at once, focus on one area where unstructured data is causing the most harm. Whether it’s invoice reconciliation, contract management, or something else, quantifying the financial impact of a single pain point will provide clear direction for your efforts.
Map the Workflow
Identify the key process that requires the most manual intervention and shadow the team responsible for it. Document every system they interact with and every manual step they take. This workflow map will serve as the foundation for building an automation strategy.
Introduce AI with Human Oversight
Start with a solution that automates the majority of data gathering and reconciliation, but leaves room for human oversight. This hybrid approach builds trust, reduces risk, and delivers immediate value.
Invest in Execution, Not Just Record-Keeping
Your existing systems store data, but the future lies in platforms that can take action on that data. Invest in AI solutions that not only record information but also execute tasks, turning unstructured requests into actionable results.
Conclusion
Unstructured data presents both a challenge and an opportunity. By harnessing AI’s power to organize and make sense of this messy data, businesses can unlock insights that drive operational efficiency, uncover hidden risks, and better understand customer and supplier sentiment. Those that take control of their unstructured data today will be in a stronger position to succeed tomorrow.
