The joint research study by Splunk and Enterprise Strategy Group (ESG) found that by making better use of data, has material increase to revenue, reduces operational costs, and boosts profitability by an average of 12.5% to total gross profit.
The report titled “What Is Your Data Really Worth?” also revealed 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.
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.
Relative to the Data Deliberators surveyed, Data Innovators have added 83% more revenue to their topline and 66% 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.
The study also found that 97% of Data Innovators meet or exceed their customer retention targets, with the majority (60%) having outstripped their goals. Meanwhile, 93% feel they tend to make better, faster decisions than competitors; while 91% believe that their organization is in a strong position to compete and succeed in its markets over the next few years.
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.
Splunk president and ceo, Doug Merritt noted the difficulty business leaders face in putting hard numbers around the monetary value of data.
“This 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,” he added.
Data utilization by industry
- 89% 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% of technology firms have increased revenue through better use of their data assets.
- 60% of retail firms have increased revenue through better use of their data assets.
- 88% 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% of manufacturing and resources firms have increased revenue through better use of their data assets.
- 93% of traditional communications and media companies agree that they must use data to reinvent their services or be disrupted by alternative entertainment offerings.
- 52% of public sector agencies have 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.
Data utilization in Asia-Pacific
- Across APAC, there is 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 believe that CX has been improved by better data utilization, Japanese respondent shared similar sentiments with 66% responding that they were able to improve CX through better data utilization.
- Chinese companies place the highest importance on creating stellar customer experience, describing their company culture as “customer-obsessed” than ”data-obsessed.”
- Chinese companies demonstrate the highest level of data maturity across the region:
- 48% of Chinese companies being Data Adaptors and Data Innovators, while 45% of Australian companies and 26% of Japanese companies falling within the same categorizations.
- 74% of Japanese companies surveyed fell within the Data Deliberator category, presenting opportunity for growth across APAC.
- Companies in APAC are seeking to demystify dark data through investing in expertise in the field of Data Analytics.
- Both Chinese (59%) and Australian (64%) companies surveyed have hired Chief Data Officers/equivalents in charge of all data analytics initiatives, higher than the global average (56%).
- 33% of Japanese companies say 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 has 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 have reduced their volume of dark data over the past 12 months. This is more than any other country, showing a willingness for Australians to harness that potential and do something meaningful with it. Among companies that attribute an operational cost reduction to better data utilization, Australian organizations (3.81%) also reported the largest average decrease in costs over the past year.