Andi Mann returns with findings from new research on how 'data innovator' companies are operationalizing data to speed innovation and produce revenue growth.
In an age of data-driven decisions, your board, peers, and staffs expect you to be the data expert for your business. But with the hype around big data, machine learning, and artificial intelligence, it is hard for technology leaders – CIO, CTO, CDO – to separate fact from fiction, or expectation from reality.
For this reason, my company, Splunk, recently commissioned an independent research firm, Enterprise Strategy Group (ESG), to conduct a global survey of 1,300 business and IT leaders, seeking objective insights that will help IT leaders better understand and act on today’s data reality.
ESG’s research identified some key business outcomes that define the top 10 percent of the most mature “data innovators” (as opposed to the least mature cohort, which they call “data deliberators”). Then, they asked what these businesses are doing right to uncover and operationalize data.
The findings have strategic implications for all executives, and especially technology leaders. For example:
Data maturity delivers revenue growth.
Sure, data innovators “do more with less”; but the real headline is that they also “grow the top-line”. Respondents reported better data use contributed on average 5 percent higher revenue and 5 percent lower costs – a 10 percent net profitability benefit and a total economic value of over $38 million. How better to prove that IT is a strategic revenue-generating asset, not just a tactical cost center – and why you deserve your seat at the table?
Data maturity enables better, faster decisions.
In part, the finding that data maturity improved the speed and quality of decision-making for 72 percent of data innovators explains this revenue impact. Mature data use helps to quickly moderate opinions, settle arguments, reduce bias, and highlight truths, making data innovators over three times more likely to make better, faster decisions than their competitors, when compared to data deliberators.
Data-driven decisions improve innovation.
Most new initiatives in modern businesses depend on technology, and increasingly on data. With data enabling better and faster decisions, 76 percent of data innovators say they can innovate more often and bring new products to market faster by leveraging data, compared to just 55 percent of data deliberators. Again, this helps to explain at least in part the profitability boost reported by data innovators.
‘Data-driven’ requires digital leaders.
The research shows that leadership commitment to hiring, prioritization, funding, and governance are key to being a data innovator. Indeed, in some industries (healthcare, government) or under specific regulatory controls (HIPAA, GDPR), data governance is a legally mandated executive responsibility. This certainly helps to explain why 95 percent of data innovators have hired or appointed a Chief Data Officer (vs. 29 percent of deliberators).
Data innovation requires data experts.
Innovative leaders understand that deep data expertise is critical, especially when working with specialized technologies – from algorithmic processing and predictive analytics to machine learning and artificial intelligence. As a result, we see that 88 percent of data innovators hire highly skilled data investigators (vs 27 percent of deliberators) and invest in the tools and processes needed to support them.
BUT… data innovation is a team sport.
Experts and leaders are important in the technology team, but broad data access is strategic to the entire business. As a result, over three quarters of data innovators consolidate and integrate data from across the entire business, and 85 percent give most employees access to analytic tools. This contrasts with less than a third of data deliberators in both cases, who typically spread data across silos and hoard tools in IT.
Data maturity is not free.
Given the critical importance of new leadership, roles, resources, tools, and skills, we found that in over half of all data innovators, IT leaders allocate more than 20 percent of their budget to data analytics. Just like with DevOps or Digital, you absolutely cannot just buy your way into a successful data-driven transformation, but our research clearly shows that the top data innovators invest for success.
The good news does not end there either. ESG’s research also found that better data usage positively correlates with higher availability, better customer experience, higher customer retention, improved product and services, reduced risk and waste, greater productivity, lower incidence of fraud, and more.
The ‘call to action’ here is abundantly clear. A strategic commitment to uncovering and operationalizing data across your organization facilitates data-driven decisions and helps to deliver key business goals. To replicate the successes of the top 10 percent of data innovators, you can start by downloading the research (free to Heller Report readers, with no registration required), to help understand what CIOs and CTOs at these orgs are doing. Then, you can start to build your own data strategy.
With proven data-driven results like these, the rest of the C-Suite will surely thank you!