Here’s why data-driven leaders are profiting more from their business than others
- A strong data foundation is essential to staying ahead of the curve
- Data leaders are 11% more robust and able to detect and address security breaches more quickly
In today’s world, data is everything and for everyone – regardless of how big or small the organization is. Data collection is now a necessary component of running a business in order to analyze an organization and its clients’ potentials. Business leaders now place such a premium on being data-driven that there is already a risk that there will be so much data generated that it will be challenging for many to know what to analyze and what to extract that is valuable.
With so much data, however, firms will simply have more opportunity to outperform their competitors. That was just demonstrated in Splunk’s Economic Impact of Data Innovation 2023, a global study that measures the financial advantages of established data practices.
The report reveals that businesses that are most adept at using data see an increase in earnings of 9.5%, are 2.9 times more likely to launch products ahead of schedule, and are twice as likely to exceed financial projections.
A solid data foundation is necessary for staying ahead of the curve, according to REI’s CISO Mike Hughes, and the company is proud of its proactive approach to generating creative value from its data. “Our data visibility bolsters efficiency, competitiveness and resilience against an advanced threat landscape and macro challenges. Splunk is a critical element of our overall strategy to ensure we can scale and deliver the best experience for our customers,” he said.
Data-driven business gains more than others
According to the report, leaders are defined as companies that have excelled in the six crucial areas of data classification, aggregation, quality, analytical expertise, analytical tools, and monitoring. To put that into perspective, research demonstrates that data leaders experience higher earnings and innovation.
Data leaders report they have been able to introduce nine new products each year that wouldn’t be have been conceivable without their data innovation capabilities, as opposed to beginners’ average of three new products per year, with an average gain of 9.5% in gross revenues. They are also more likely to report (49% versus 30% of beginners) that using data innovation in sales, marketing, and customer service/support has helped to increase customer lifetime value.
Additionally, data leaders are 11% more robust, being able to detect and address security breaches more quickly. Apart from the increased profits and innovation, data leaders also outperform their rivals.
Data leaders are 5.7 times more likely to claim that their company consistently makes better decisions than their rivals. They are 4.5 times more likely to think their company is well-positioned to compete with other businesses in its market during the next years.
Furthermore, data leaders are deliberately operationalizing and generating revenue from their data. Additionally, leaders are more likely to claim that their data monetization sources are complementary and expand more quickly. They have 2.3 times as much money coming from data monetization, while also operationalizing 38% more of their data assets.
According to Ammar Maraqa, Chief Strategy Officer at Splunk, data-driven innovation provides a significant advantage. “Organizations 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.”
Innovation across industries
Data offers a chance to boost revenue and boost performance across all industries, with particular challenges and results. Key findings include:
- Public sector: Compared to the industry average of 8%, 20% spend significantly more than a quarter of their IT budgets on employees and products that look into, track, analyze, and act on data.
- Financial services: For data innovation, 79% have implemented AI/ML, compared to 67% overall.
- Healthcare: While 11% of healthcare and life sciences firms attained leader status, just 9% of the surveyed organizations were among the most advanced data innovators.
- Manufacturing: Compared to enterprises across all industries, 54% employ data innovation for supply chain and operational use cases.
- Retail: Retail firms are more likely to report higher brand loyalty, customer lifetime value, revenue from data monetization, product innovation, and a variety of other data innovation-fueled results because an above-average 10% of them are data innovation leaders.
Today’s rapidly evolving technological environment has made data usage to manage a business the new norm. Therefore, to gain a competitive edge over your sector rivals, you need to use your collected data effectively.