Brands and businesses continue to struggle with harnessing the value of the mounds of available data, which can lead to misinterpreted or downright unreliable insights. New research from data-to-everything platform provider Splunk explores the correlation between an organization’s use of data and its business success.
The firm’s new global study, What Is Your Data Really Worth?, quantifies the economic impact and value of data across organizations. The study found that by making better use of data, leading organizations surveyed had materially increased revenue and reduced operational costs, boosting profitability by an average of 12.5 percent of their total gross profit.
Results found 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.
The data-to-everything journey: Different stages of data maturity impact the scale of data value
In addition to analyzing how organizations are 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 which 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.
Organizations by maturity of data use:
Relative to the Data Deliberators surveyed, Data Innovators have added 83 percent more revenue to their topline and 66 percent more profit to their bottom line in the past 12 months. 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 percent of Data Innovators meet or exceed their customer retention targets, with the majority (60 percent) having actually outstripped their goals. Meanwhile, 93 percent feel they tend to make better, faster decisions than competitors; while 91 percent believe that their organization is in a strong position to compete and succeed in its markets over the next few years. However, across industries and countries, less than 11 percent of organizations have reached the stage of Data Innovator, demonstrating that nearly 90 percent still have room for improvement.
“Until now, it has been difficult for business leaders to put hard numbers around the monetary value of data,” said Doug Merritt, president and CEO of Splunk, in a news release. “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. Splunk is proud to help our 19,000+ customers bring data to everything and re-imagine business outcomes with the data that’s already at their fingertips.”
Organizations embracing data are primed to lead the next generation of business
The study quantifies the economic impact resulting from an organization’s better data use, with significant findings across eight major industries, including:
- 89 percent of financial firms agree that the intelligent use of data and analytics is increasingly becoming the only source of differentiation in the financial industry.
- 65 percent of technology firms have increased revenue through better use of their data assets.
- 60 percent of retail firms have increased revenue through better use of their data assets.
- 88 percent of healthcare and life sciences firms agree 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 percent of manufacturing and resources firms have increased revenue through better use of their data assets.
- 93 percent of traditional communications and media companies agree that they must use data to reinvent their services or be disrupted by alternative entertainment offerings.
- 52 percent of public sector agencies have reduced their cost of operations through better use of their data assets.
- 51 percent of higher education institutions used data to provide better and more proactive protection from cyber threats.
How better data use drives positive outcomes:
Organizations who utilize data outperform their global peers
The study also surfaced trends related to data utilization maturity by country:
- 53 percent of UK organizations have progressed beyond Stage 1 data utilization maturity status; tied for 3rd out of the seven countries included in this survey.
- UK organizations were most likely to say they have improved product/service quality as a result of better data utilization. 73 percent reported improved product and/or service quality compared with a global average of 67 percent.
- Relative to organizations in other countries, they are also most likely to report improved employee efficiency and/or productivity as an additional benefit of better data discovery and use. 65 percent reported increased employee efficiency and/or productivity, compared with a global average of 60 percent.
- Among respondents attributing an increase in top-line revenues to improved data utilization, UK organizations report an average 12-month revenue gain of 3.97 percent; the second-highest increase among all countries surveyed. The highest increase was in China, with 4.05 percent.
How data can transform entire organizations:
Splunk unveils Data Maturity Calculator
To help organizations assess their stage of data use, Splunk launched its new 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.
The Splunk Data Maturity Calculator is a quick and easy way 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. To find out how data mature your organization is, access the Splunk Data Maturity Calculator.
The joint research study between Splunk and Enterprise Strategy Group (ESG) surveyed 1,350 senior business and IT decision-makers across eight industries in Australia, China, France, Germany, Japan, the UK and the US.