Extra tags: Digital Transformation
Splunk Inc., the data platform leader for security and observability, in collaboration with the Enterprise Strategy Group, today released the Economic Impact of Data Innovation 2023, a global research report that quantifies the economic benefits of mature data practices. The report reveals the most data-savvy companies are increasing profits by 9.5%, are 2.9 times more likely to beat the competition to market, and are twice as likely to exceed financial expectations.
“A strong data foundation is essential to staying ahead of the curve–and we are proud of our proactive approach to extracting innovative value from our data,” said Mike Hughes, CISO of REI. “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.”
The research report defines leaders as organisations that have achieved excellence in the six key areas of data classification, aggregation, quality, analysis skills, analysis tools and monitoring. Key findings include:
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Data leaders experience increased profits and innovation. With an average increase of 9.5% in gross profits, data leaders report launching nine new products per year that wouldn’t be possible without their data innovation capabilities, compared to the beginner's average of three new products per year. They are also more likely to report that applying data innovation to sales, marketing and customer service/support has contributed to increasing customer lifetime value (49%, versus 30% of beginners). In addition, data leaders are more resilient and quicker to identify and remediate security incidents by 11%.
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Data leaders beat out their competition. Data leaders are 5.7 times as likely to say their organisation almost always makes better decisions than competitors. They are 4.5 times as likely to believe their organisation is in a very strong position to compete and succeed in their markets over the next few years.
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Data leaders are proactively operationalising and monetising their data. Leaders are also more likely to say that their data monetisation streams are additive and grow faster. They have operationalised 38% more of their data assets while also deriving 2.3 times as much of their revenue via data monetisation.
Virtually every organisation is under pressure to keep up with the rapid rate at which data is growing. However, the organisations that feel the most pressure are also having the most success: 67% of data innovation leaders report feeling a high degree of pressure versus only 41% of intermediates and 15% of beginners.
“Data-driven innovation gives you a massive edge,” said Ammar Maraqa, Chief Strategy Officer, Splunk. “Organisations that prioritise 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.”
Data Leaders Innovate Across Industries
Across every industry, data provides an opportunity to increase profit and improve performance, with unique challenges and outcomes. The industry-focused addendum to the report highlights these vital areas. Key findings include:
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Public sector: 20% spend more than a quarter of their IT budgets on solutions and staff that investigate, monitor, analyse and act on data — well above the 8% cross-industry average.
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Financial services: 79% have adopted AI/ML for data innovation, versus 67% overall.
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Healthcare: While 9% of surveyed organisations are among the most mature group of data innovators, 11% of healthcare and life sciences organisations achieved leader status.
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Manufacturing: 54% apply data innovation to supply chain and operations use cases, compared to 45% of organisations across all industries.
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Retail: An above-average 10% are data innovation leaders, and retail organisations are more likely to report greater brand loyalty, customer lifetime value, revenue from data monetisation, product innovation and a multitude of other data innovation-fueled outcomes.
Despite the high demand for data innovation adoption, organisations in Singapore are still trying to harness the power of data to drive business growth or reshape how they do things today. To counter the global talent shortage, organisations are required to focus on internal reskilling while looking for talents with data skills.
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85% of organisations rated the importance of uncovering and better operationalising data as one of their top 10 priorities. 65% of Singapore organisations shared that data has helped them make better decisions faster compared to their peers.
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Organisations are said to have benefitted the most from the following data sources: Customer data (31%), and Financial data (29%).
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Over 60% of respondents also shared that at least 20% of the organisation’s total revenue comes from its data-driven services and products.
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For supply chain or manufacturing-related operations in the past 12-24 months, 62% of organisations also shared that data has helped them optimise supply chain costs via better partner/vendor comparisons.
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However, the ability to make the best sense of data can be challenging. When it comes to innovating with data, 34% of companies responded that it’s hard to coordinate all the teams needed to advance an idea, and 37% shared that data does not have the quality or format to support innovation practices.
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68% of organisations also shared that retaining individuals with the desired data-centric skills has been challenging.
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To address the situation, organisations in Singapore have taken steps toward training and nurturing talents that help drive data innovation (15%), placing more emphasis on increased data-centric training/certifications (55%).
For additional insights and recommendations from the Economic Impact of Data Innovation 2023, please visit the Splunk website to download the report. Organisations can also assess their status — and potential — in their own data innovation journey by visiting the Splunk Data Maturity Calculator.
