An organization’s maturity of data exploitation impacts its ability to convert information into concrete, data-driven decisioning and agility: report.
What is the correlation between an organization’s use of data and its business success?
Can the economic impact of the value of data across organizations be quantified?
By making better use of data, can organizations materially increase their revenue and reduce operation costs to boost profitability?
A global study, “What Is Your Data Really Worth?” was commissioned by Splunk Inc and Enterprise Strategy Group (ESG) to answer these and other burning questions on the minds of business leaders grappling with digital transformation.
The joint research study involved 1,350 senior business and IT decision-makers across eight industries in Australia, China, France, Germany, Japan, the UK and the US. Results showed that a more advanced data strategy was tied to improved outcomes including revenue growth, operational cost reduction, increased innovation, faster time to market, higher customer satisfaction and retention, and better, faster decision making across all industries and in all countries.
By making better use of data, successful organizations surveyed had materially increased revenue and reduced operational costs, boosting profitability by an average of 12.5% of their total gross profit.
What the study achieved
In addition to analyzing how organizations were saving money and growing revenue with data, the study assessed respondents’ different stages of data-maturity based on criteria such as the prevalence of modern analytics tools and skill sets, and the effectiveness of the organization at operationalizing its data. Respondents were grouped into three data maturity categories:
- Stage 1: Data Deliberator—Organizations that are in the early phase of their data strategy implementation.
- Stage 2: Data Adopter—Organizations that are making good use of their data, but still have room for improvement.
- Stage 3: Data Innovator—Organizations that place the strongest strategic emphasis on data and have an advanced strategy in place to extract business value.
The study found that an organization’s stage of data use impacts its ability to not only glean insights from its data, but to convert these insights into concrete, data-driven decision-making and real-time action. All organizations reported benefits from better data use, but Data Innovators achieved considerably higher key business and economic benefits.
Relative to the Data Deliberators surveyed, Data Innovators had added 83% more revenue to their topline and 66% more profit to their bottom line in the past 12 months of the study period. The study found Data Innovators to be more likely to have a data-obsessed company culture and employ AI technologies for data analysis by acting on their data more frequently.
In addition, the study found that 97% of Data Innovators meet or exceed their customer retention targets, with the majority (60%) having actually outstripped their goals. Meanwhile, 93% felt they tend to make better, faster decisions than competitors; while 91% believed that their organization was in a strong position to compete and succeed in its markets over the next few years.
However, across industries and countries, less than 11% of organizations have reached the stage of Data Innovator, demonstrating that nearly 90% still have room for improvement.
Said Doug Merritt, President and CEO, Splunk: “Until now, it has been difficult for business leaders to put hard numbers around the monetary value of data. This first-of-its-kind study proves that a holistic and sophisticated approach to data can help any organization become a Data Innovator, outpace their competition and become business and market leaders.”
Embracing data to lead next-gen businesses
The study quantified the economic impact resulting from an organization’s better data use, with significant findings across eight major industries. Specifically,
- 89% of financial firms agreed that the intelligent use of data and analytics is increasingly becoming the only source of differentiation in the financial industry.
- 65% of technology firms had increased revenue through better use of their data assets.
- 60% of retail firms had increased revenue through better use of their data assets.
- 88% of healthcare and life sciences firms agreed that advancements in data analysis and correlation of different data sets will have as big an impact on health outcomes as other medical advancements.
- 55% of manufacturing and resources firms had increased revenue through better use of their data assets.
- 93% of traditional communications and media companies agreed that they must use data to reinvent their services or be disrupted by alternative entertainment offerings.
- 52% of public sector agencies had reduced their cost of operations through better use of their data assets.
- 51% of higher education institutions used data to provide better and more proactive protection from cyber threats.
- The study also surfaced trends related to data utilization maturity by country across APAC.
- Chinese companies demonstrated the highest level of data maturity across the region, with 48% of Chinese companies being Data Adaptors and Data Innovators, while 45% of Australian companies and 26% of Japanese companies fell within the same categorizations.
- 74% of Japanese companies surveyed fell within the Data Deliberator category, presenting opportunity for growth across APAC.
- Companies in APAC were seeking to demystify dark data through investing in expertise in the field of Data Analytics.
- Both Chinese (59%) and Australian (64%) companies surveyed had hired Chief Data Officers/equivalents in charge of all data analytics initiatives, higher than the global average (56%).
- Across APAC, there was a strong emphasis on customer experience, with the region outperforming global respondents in terms of data and analytics being an enabler of improving customer experience (CX).
- 67% of Chinese organizations believed that CX had been improved by better data utilization, Japanese respondents shared similar sentiments with 66% responding that they were able to improve CX through better data utilization.
- Chinese companies placed the highest importance on creating stellar customer experience, describing their company culture as “customer-obsessed” than ”data-obsessed”.
- 33% of Japanese companies said they bring data and analytics to all executive decision support processes—the highest percentage of respondents amongst the countries surveyed. In the region, Japan also had the highest number of businesses that require all business decisions to be validated by quantitative data, with 8% of Japanese business respondents affirming the statement.
- Chinese companies have acknowledged the importance of deciphering dark data to discover previously untapped insights, with 31% of respondents stating that uncovering and better utilizing dark data is their most important business and IT priority over the next 24 months. This surpasses the global average of 25% of respondents concurring with the statement.
- 74% of Australian organizations had reduced their volume of dark data over the past 12 months. This was more than any other country, showing a willingness for Australians to harness that potential and do something meaningful with it. Among companies that attributed an operational cost reduction to better data utilization, Australian organizations (3.81%) also reported the largest average decrease in costs over the past year.
These findings showcase the immense opportunity present for firms in APAC if and when they tap into the insights derived from dark data.
Helping hand from a Data Maturity Calculator
To help organizations assess their stage of data use, Splunk recently launched a Data Maturity Calculator. The free, web-based assessment tool allows companies to discover how well their organization is maximizing the value of its data for desired business outcomes. It is touted as a quick and easy tool for organizations to assess their own stage of data use, and then find the right tools to help them make the most of their data.