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September 28, 2010

Improved Data – Shown to Promote Innovation

Sybase has just released the second part of a three part ground-breaking study that attempts to measure the direct correlation between a company’s IT investments and its business performance.  The study was commissioned by Sybase and conducted by researchers from the University of Texas in conjunction with the Indian School of Business.  In a previous blog post, I discussed the insights derived from part one –impacts of data effectiveness on general corporate financial performance.  Here is a link to that blog post:

http://blogs.sybase.com/sybaseiq/2010/09/the-benefits-of-improved-data-%e2%80%93-quantified-at-last/

The second part of the study has just been released, and focuses on the relationship between better data, and a company’s ability to innovate and grow revenue from new products and services.  This is important, because new business – an increasing customer base and variety of products – is a key indicator of a firm’s competitiveness and ability to thrive.

Part two of the documented study includes some thoughts from Mark Deck, lead director of product development practice at PRTM, a management consulting firm in Waltham, MA, who describes why there is a relationship between better data and innovation.  Mr. Deck says ”...increased data accessibility enables different groups such as product development in an organization to obtain data from functions like sales and services, which provide important information on customer preferences and demand patterns”.  Accurate data and correct analysis is critical for the creation and marketing of new products and services.

The study focuses on two aspects of data effectiveness – accessibility (availability by remote users) and intelligence (trends and patterns) – and how a 10% improvement in these attributes leads to increased revenue from both new products and services, and new customers.  These results were generated based on a detailed survey of over 150 Fortune 1000 companies.  Here are the key findings:

• An increase of 10% in data accessibility and intelligence leads to a .81% increase in revenue due to new products: $17 million additional revenue for the median firm in the study’s sample
• An increase of 10% in data accessibility and intelligence leads to a .7% increase in revenue due to new customers: $14.7 million additional revenue for the median firm in the study’s sample

The results demonstrate the often dramatic impacts from even marginal improvements in data quality and usability.  The third and final part of the report will explore customer-focused and operational impacts.  You can find the published report here:

http://www.sybase.com/detail?id=1082805

Posted by Sybase IQ at 8:29 PM

September 17, 2010

The Benefits of Improved Data – Quantified At Last!

Businesses spend huge sums of money on information technology – computers, networking, data storage, applications, mobilization, education – in the belief that better business intelligence leads to better performance.  But which specific investments and improvements lead to the biggest pay offs, and what is the magnitude of the return?

Sybase recently revealed the results of the first part of a ground-breaking three part study that attempts to measure the direct correlation between a company’s IT investments and business performance.  The study was commissioned by Sybase and conducted by researchers from the University of Texas in conjunction with the Indian School of Business.  The first part of the study looks at five distinct attributes of data: quality, usability, intelligence, accessibility and mobility, and examines how a 10 percent improvement in any one or two of these attributes affects business financial performance. 

Here is a depiction of the conceptual model that formed the basis of the study:

The methodology of the study involved these steps:

1. Develop a questionnaire that would elicit measures of the data attributes and financial impacts
2. Refine the survey with feedback from employees of Fortune 1000 companies across various industries
3. Conduct the survey
4. Analyze the results
   1. Use factor analysis to derive the specific variables that impact operational performance
   2. Apply multiple regression analysis statistical techniques to quantify the relationship between independent and dependent variables

The study focuses on the impacts of effective data on productivity of employees, and key financial performance indicators for a company.  Here are the highlights for a Fortune 1000 business (median  36,000 employees and $388,000 in sales per employee):

• A 10% increase in data conciseness and consistency results in a 15% average increase in sales per employee
• A 10% increase in data accuracy and accessibility results in a 16% average increase in return on equity (ROE)
• A 10% increase in mobility of data for the sales force results in a 1.4% average increase in return on invested capital (ROIC)
• A 10% increase in intelligence and remote accessibility of data results in a .7% average increase in return on assets (ROA)

The findings demonstrate the often dramatic impacts from even marginal improvements in data quality and usability.  Two subsequent reports will explore customer-focused and operational impacts.

The first part of the full report can be found here:

http://www.sybase.com/detail?id=1082805

Enjoy!

Courtney Claussen

Posted by Sybase IQ at 7:20 PM

September 14, 2010

Analytics: The Survey Says...

As we have noted more than once in recent weeks, organizations are moving to analytics solutions in unprecedented numbers. We thought it would be a good idea to get a clearer picture of both why and how this is happening, so over the summer, Sybase hand-picked a subset of its 1,800+ Sybase IQ customers for an anonymous survey. The customers surveyed represent the amazing diversity of the more than 3200 Sybase IQ implementations worldwide.

Some of the findings are pretty much in line with what you would expect from such a survey, while others are more surprising. Not surprisingly, more than 2/3s of those surveyed cited rampant data growth as a major driver behind their implementation of analytics. More surprisingly, fewer than 15% of these customers (all analytics customers, remember) have a formalized analytics plan in place.

Let’s look at some of the results in a little more detail.

Drivers

Rapid data growth continues to be a major driver for the adoption of analytics. As companies are faced with the challenge of managing the growing influx of data, they are turning to analytics to make sense of it all.

• 72% of those surveyed noted that data growth and the need to better manage and understand data was the biggest driver for implementing analytics
• Increasing and maintaining competitive advantage was ranked as the highest benefit sought with an analytics solution
• The highest priority for analytics solutions is time to results, followed by the total cost of ownership and initial cost of the implementation
• The number one impact companies report seeing from analytics is better planning, forecasting and decision-making

 

Analytics as a Priority

Although businesses feel that analytics is something their organizations must have, most companies still do not have a formalized analytics strategy or even include it as part of their annual IT planning process:

• A majority of those surveyed describe analytics as a ”must-have” for their business
• 86% of the survey participants do not have a formalized analytics strategy
• While half of the respondents do not include analytics as part of their annual IT planning process, 93% see the growth of business data and the distribution of that data increasingly impacting IT planning
• Many cited the change from needing data monthly, weekly, or daily, to the need to have answers continuously and in real time
• Half of those surveyed have expanded the use of analytics throughout their business since the original deployment

The Road Ahead

These results indicate that, while organizations are making progress with analytics, there is still a lot to be done. Although organizations are increasingly using analytics to drive business results with faster and more accurate answers, the discipline of developing, implementing, and managing an overall analytics strategy is emerging slowly. Meanwhile, organizations at an earlier stage are looking for how best to make the initial move in that direction. Greater recognition of the kinds of success reported by our users can only help in making such a call.

Do you have an analytics strategy in place? What are some of the challenges and what kind of successes have you seen from analytics? How are you dealing with the complexities of incorporating BI solutions to drive business results? Let’s discuss.

Posted by Sybase IQ at 10:52 PM