The press release’s headline sure is impressive: “Study Reveals 10 Percent Increase in Usability of Enterprise Data Can Translate to $2 Billion in Additional Revenue Every Year.”
That’s Billion with a B. Not too shabby.
The University of Texas’s business school in conjunction with the Indian School of Business conducted the research, which appears to be no small feat. The study “looks at five distinct attributes of data—quality, usability, intelligence, remote accessibility and sales mobility—and examines how a 10 percent improvement in any one or two of these attributes affects the metrics commonly reported for assessing the financial performance of businesses,” notes a press release.
The Daddy Warbucks sponsoring this research is Sybase, which sells “enterprise and mobile software to manage, analyze and mobilize information” (also know as “data”).
Now, most of us have come to a place in our adult lives where “sponsored survey” equals “substantial skepticism.” After all, most companies don’t commission surveys and research because they have a quest for uncovering communal market truths; they pony up the cash because they want “outside” and “independent” validation of their product and sales strategies.
Which should not disparage the researcher’s efforts or the thrust of the findings: A 10 percent improvement that delivers $2 billion in additional revenue? Not bad. (But just be sure to grab some salt.)
The survey does quantitatively validate what many others have been saying for decades: Even the best of applications and decision-making processes will be rendered ineffective by bad data. Garbage in, garbage out.
“This is the first study that quantifies the relationship between incremental improvements in data and key performance metrics of businesses today,” notes Anitesh Barua, distinguished teaching professor and lead researcher at the University of Texas at Austin. “Previous studies tell us neither the magnitude of the effect on performance nor what it takes to improve the attributes of data.”
The study (which can be downloaded for free) looks at four areas and offers compelling numbers on: employee productivity, return on equity, return on invested capital and return on assets. The survey researchers looked to the “world’s leading enterprises across a wide range of industries” for their data: The researchers measured the direct correlation between a company’s IT investments and overall business performance.
For some, the critical correlation—that a company’s IT investments can boost its overall business performance—is somewhat relatable to the “IT Doesn’t Matter” firestorm lit by Nicholas Carr in 2003, in that well-done IT can make a significant difference.
In fact, in a related blog post on ZDNet, Eric Lai, who is employed by Sybase’s marketing team, states that this new data “refutes” Carr’s inflammatory theories. (When I was on ZDNet.com, there was also a Sybase advertisement right next to Lai’s post.)
“While there’s been no dearth of rhetoric since Carr first made his argument seven years ago,” Lai opines, “there’s finally some empirical data addressing—and refuting—it.”
Hmmmmm. The study’s authors never mention Carr in the report. And I’m not sure Lai should have either.
Commenting on Lai’s post, David Dobrin, founder of B2B Analysts and enterprise software expert, writes: “The study says, simply, that IT installations vary in effectiveness; if they are used more effectively, there are benefits. No one—not Nick Carr, not Eric Lai, not me, no one—doubts this?”
Add me to the list, too. Like IT, the study does matter. It’s just all about how effectively you can use the results to your benefit.
Thomas Wailgum covers Enterprise Software, Data Management and Personal Productivity Apps for CIO.com. Follow Thomas on Twitter @twailgum. Follow everything from CIO.com on Twitter @CIOonline. Email Thomas at firstname.lastname@example.org.