Friday, September 3, 2010

Measuring the Business Impacts of Effective Data

This week I read several articles mentioning a study conducted by McCombs School of Business at the University of Texas, and sponsored by Sybase, to explore how investments in data management and information technology affect the financial performance of a company. In the study, entitled Measuring the Business Impacts of Effective Data, university researchers working in conjunction with the Indian School of Business, surveyed 150 Fortune 1000 firms across several industries in an effort to quantify the relationship between effective data and key performance metrics.

According the study, the findings definitely demonstrate the often dramatic impacts that even marginal investments in information technology can have when that technology addresses data quality, usability, and intelligence, whether it be using mobility or remote access solutions, analytics or business intelligence solutions, or a combination of the two. This study is the chapter one of a Three-Part Study.

CIOInsight published a list, in form of slideshow, called How to Sell the Value of Data to Your CEO, highlighting the information contained in this study:

- Improving the manageability of corporate data by 10% each year would enable companies to increase total sales by $55,900 per employee.

- Companies that improve the accessibility and usability of corporate data for employees can increase return-on-equity by 16%.

- Making data available to sales professionals outside the office can increase the average Fortune 1000 company's net income by $5.4 million per year.

- A 10% increase in the usability of data by mobile employees would result in a "significant increase in the productivity of the firm." Companies that fail to make data accessible, understandable, and easy to manipulate while mobile are experiencing productivity losses.

- Sales per employee in the retail sector would jump 49% with "a 10% improvement in data usability."

- Consultants would enjoy a 39% gain in sales per employee with better data usability.

- The average telecommunications company would experience increased sales of more than $9,600 per employee upon increasing data usability by 10%.

- The average consulting firm would see a $5,000 increase in sales per employee after making data 10% more usable.

- Increasing intelligence and remote access to data by 10% can help the average insurance firm improve return-on-assets by a whopping 42%, easily besting other industries.

- The average commercial bank can improve return-on-assets by 32% by implementing a 10% increase in data intelligence and accessibility.

- The University of Texas at Austin researchers find that "the cost of increasing effective data is relatively minor compared to the resulting substantial returns."

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