A new study released by Sybase found that businesses can save significant amounts of money simply by increasing the usability and accessibility of enterprise data.
The study, underwritten by Sybase and conducted by researchers from the McCombs School of Business at the University of Texas and Indian School of Business, connected the dots between what they called "data usability" and corporate financial performance. This takes into consideration the additional processing time required to make data valuable for the business. Improve data usability, and the subsequent processing time can be reduced by as much as 10 percent, the researchers say. And this translates into potentially billions saved.
Researchers say data usability can be improved by focusing on the following factors:
- Intelligence of data "can be improved through the accuracy of the prediction, trends analysis, recommendations and profile matching/associations made by the associated applications. For example, what percentage of recommendations made by a business intelligence application results in cross-selling?"
- Remote access to data and applications is essential in an increasingly mobile workforce.
- Sales mobility "involves the ability of salespersons to use portable devices and applications to exchange information related to all aspects of a deal or transaction with a customer."
- Improvements in data quality will result in improvements that "may come through better and timely decisions (which may increase customer satisfaction, loyalty and hence revenues), as well as fewer errors and rework, lower working capital requirements, faster receivables, etc. (which will lower costs)."
A 10 percent improvement in any one or two of these attributes affects common business metrics, the study says.
A 10 percent improvement can add up to big dollars. Researchers determined that if a median Fortune 1000 business (36,000 employees and $388,000 in sales per employee) increased the usability of its data by just 10 percent, it would translate to an increase in $2.01 billion in total revenue every year, or $55,900 in additional sales per employee annually.
Return on Equity (ROE) could be boosted by 16 percent, and if the average Fortune 1000 business were to increase the mobility of its sales organization’s data by just 10 percent, Return on Invested Capital (ROIC) would increase by 1.4 percent as a result of net income increasing by $5.4 million. Also, if the average Fortune 1000 company were to increase both intelligence and accessibility of data by 10 percent, Return on Assets (ROA) increases by 0.7% percent -- "the equivalent of squeezing $2.87 million of additional income out of the average Fortune 1000 business’s assets, assuming assets remain fixed."
UPDATE: Fellow ZDNet contributor Eric Lai (who works for Sybase) also posted details about the study here at the ZDNet community, pointing out that the results punch a hole in Nick Carr's famous assertion that "IT Doesn't Matter."