Further proof - if it were needed - of the benefits of embracing a data-driven strategy has emerged in a new study which claims to show that by making better use of data, organisations can not only materially increase revenue and reduce operational costs, they can also boost profitability by an average of 12.5% of their total gross profit.
The joint research, carried out by Splunk and Enterprise Strategy Group (ESG), quizzed 1,350 senior business and IT decision-makers across eight industries in Australia, China, France, Germany, Japan, the UK and the US.
It 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.
In addition to analysing how organisations 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 organisation at operationalising its data.
Respondents were grouped into three data maturity categories:
Data Deliberators - Organisations that are in the early phase of their data strategy implementation.
Data Adopters - Organisations that are making good use of their data, but still have room for improvement.
And, finally, Data Innovators - Organisations which place the strongest strategic emphasis on data and have an advanced strategy in place to extract business value.
The study found that an organisation’s stage of data use has a major impacts on 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 organisations 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.
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% feel they tend to make better, faster decisions than competitors; while 91% believe that their organisation is in a strong position to compete and succeed in its markets over the next few years.
However, across industries and countries, fewer than 11% of organisations have reached the stage of Data Innovator, demonstrating that nearly 90% still have room for improvement.
Splunk president and chief executive Doug Merritt said: "Until now, it has been difficult for business leaders to put hard numbers around the monetary value of data. This study proves that a holistic and sophisticated approach to data can help any organisation become a Data Innovator, outpace their competition and become business and market leaders."