At Sociocast we believe that ‘better data’ equals ‘better out-put’ which is one of the many reasons that we process all data from/for our clients from raw formats.
While everyone is talking around the concept of ‘Big Data’ right now, a study on data quality from the University of Texas at Austin (sponsored by Sybase) suggests that ‘Better Data’ might be a more relevant first goal for many companies, rather than setting their sights immediately on implementing ’Big Data’. Better data could translate into more sales and higher productivity.
The study found that if the median Fortune 1000 company were able to increase the usability of its data by just 10%, company revenue would be expected to increase by $2.01 billion with many new jobs being added. The paper explains that data can be made more usable by improving at least three areas of data:
- Better presentation
- Easier processesing
- More consistency across parallel data sets
The report argues that just having data alone doesn’t guarantee competitive advantage. Anitesh Barua, IT researcher and professor at the University of Texas McCombs School of Business, said that “For that you need other attributes like intelligence, usability, accessibility and mobility, and we now have the research results to convince CEOs and CFOs of that.” The report estimates that the following benefits could be achieved by improving data quality:
- For every 10 percent incease in usability, sales per employee increases 14.4 percent, or on average, $55,900
- For every 10 percent increase in data quality and sales mobility, the Return on Equity increases by 16 percent
- For every 10 percent increase in business intelligence from better data, businesses increase their number of products and services by 1.51 percent
- Reducing the effort to improve data usabilty by 10 percent would result in a significant productivity increase
Barua commented on the results of the survey that “if I can show that information technology can directly drive profitability, who cares whether the IT budget is three percent of the revenues? We can actually spend more.”
ReadWriteWeb.com developed an Infographic based on the results of this study showing the impact that better data quality can have across different industry segements, like insurance, telecommunications, and publishing.
This post was inspired by friend and former colleague Doug Pollack, who posted how data quality drives ROI in Digiday.