Data-savvy Organizations More Profitable, Innovative
- By Paul Mah
- October 13, 2022
Data-savvy organizations are more profitable, resilient, and innovative, according to the results of a new global survey by Splunk conducted in collaboration with the Enterprise Strategy Group.
To quantify the economic benefits of mature data practices, the “Economic Impact of Data Innovation 2023” study surveyed a large group of more than 2,000 IT, security, and business leaders from nine countries including Australia, India, Japan, New Zealand, and Singapore.
Organizations are under pressure
The report found that the most data-savvy companies are increasing profits by 9.5%, are 2.9 times more likely to beat the competition to market, and are twice as likely to exceed financial expectations.
But while virtually every organization is under pressure to cope with exponentially more data, it turns out that it is those that felt the most data pressure are also experiencing the most success.
Specifically, 67% of data innovation leaders strongly agree that their data is growing faster than their ability to keep up. Conversely, just 41% of intermediates and 15% of beginners said the same, suggesting that enhanced data innovation also drives a hunger for even more data.
The report revealed some industry-specific insights, too. For instance, 79% of the financial services industry has adopted AI/ML for data innovation, compared to 67% overall. Elsewhere, an above-average 10% of retailers are data innovation leaders, reporting benefits such as greater brand loyalty and revenue from data monetization, among others.
Characteristics of data leaders
Leaders are defined as organizations that have achieved excellence in the six key areas of data classification, aggregation, quality, analysis skills, analysis tools, and monitoring.
According to the report, leaders overshoot their earnings targets at twice the rate of beginner-level businesses and operationalize a higher percentage of their data: 66% of all data that their organizations produce, versus 48% among beginners and 57% among intermediates.
Other characteristics of data leaders:
- Data leaders experience increased profits and innovation with an average increase of 9.5% in gross profits. They also report launching nine new products per year which wouldn’t be possible without their data innovation capabilities, compared to the beginner's average of three new products per year.
- Data leaders beat out their competition – they are 5.7 times as likely to say their organization almost always makes better decisions than competitors. They are also 4.5 times as likely to believe their organization is in a very strong position to compete and succeed in their markets over the next few years.
- Data leaders are proactively operationalizing and monetizing their data. They are more likely to say that their data monetization streams are additive and grow faster. They have operationalized 38% more of their data assets while also deriving 2.3 times as much of their revenue via data monetization.
How to gain an edge
The report offered recommendations for organizations to drive data innovation. For a start, they need to prioritize data innovation and invest for success. For the latter, the report noted that nine out of 10 (92%) leaders focus their investment on a cohesive platform approach, rather than one-off point solutions.
To succeed, data-centric innovation must be represented at the highest levels of the organization. According to the report, more than 90% of leaders have C-level roles around customer success, data governance, data strategy, and innovation.
Finally, organizations should commit to either speed or achieving good market fit – but not both. Beginner and intermediate organizations are more likely to balance innovating at top speed with investigating how their innovations will be received; leaders favored either speed or well-researched market suitability.
The importance of data continues to increase, and the onus is on businesses to keep the pedal to the metal. Ammar Maraqa, the chief strategy officer at Splunk noted that data-driven innovation gives organizations a “massive edge”.
He said: “Organisations that prioritize investments in collecting and using their data have full visibility into their digital systems and business performance, which makes it easier to adapt and respond to disruptions, security threats, and changing market conditions.”
The full report can be downloaded here (free registration).
Paul Mah is the editor of DSAITrends. A former system administrator, programmer, and IT lecturer, he enjoys writing both code and prose. You can reach him at [email protected].
Image credit: iStockphoto/Sushiman
Paul Mah
Paul Mah is the editor of DSAITrends, where he report on the latest developments in data science and AI. A former system administrator, programmer, and IT lecturer, he enjoys writing both code and prose.