PLANNING AND LEADERSHIP FOR A BETTER WORLD
PLANNING AND LEADERSHIP FOR A BETTER WORLD Better data would have told Christopher Columbus that he was positioned nicely for a Caribbean vacation but was nowhere near Asia, and General George Custer would've known his troops were mortally outnumbered. But does better data make much difference in the modern world of cutthroat business?
A recent study by researchers at the University of Texas at Austin (UTA) and the Indian School of Business set out to discover if improving the data that a company uses improves that company's performance. "In spite of the explosion of data in recent years, not all firms have equally good data for decision making," says study leader Anitesh Barua, the William F. Wright Centennial Professor of Information Technology at UTA.
"Yet the benefits of improving data to make it more effective can be staggering," he says.
Sampling 150 Fortune 1,000 businesses, the researchers found that a company working with data that is 10 percent better than that of its competitors will experience a 16 percent higher return on equity. They say that for a median-type company in their study, this would mean "an additional $2.01 billion a year in sales."
The trick is to focus on several key attributes of the data being used for making decisions, including quality, accuracy, timeliness, depth, usability and accessibility. (Just reducing the effort it takes to access information has a positive effect on productivity.) These attributes might sound obvious, but the researchers found that many of the companies they looked at, despite having invested heavily in IT, were working with data that fell short of these values and merited a B+ at best. Raising the quality of just a few of those attributes—eliminating error-prone manual data entry would be a starter—would directly affect the bottom line, the research team concluded.
Actual business people agree with them. "The better data you have, the better decisions you can make," said Greg Linder, director of supply-chain operations for True Value. "Having end-to-end visibility allows us to . . . drill down into the cause of [a problem]."
While there's no discounting the importance of savvy data interpreters, Daryl Morey, general manager of the NBA's Houston Rockets, argues in his "Harvard Business Review" blog posting that it's unique data, not unique data analysts, that makes the competitive difference. "Many organizations have spent the last few years hiring top analysts based on the belief that they create differentiation," he writes. "But my experience, and what I'm hearing from more organizations (sports and non-sports), shows that real advantage comes from unique data that no one else has."
Others in the sports world —which is really the business world—would agree with this emphasis on better data. "Moneyball," the best-selling book turned movie, celebrates the idea that a competitive baseball team can be assembled by studying player statistics—data—that many talent scouts at the time ignored. That data includes things like on-base percentage and number of walks drawn. Despite this year's collapse, the Boston Red Sox won two world championships after converting to the gospel of sabermetrics, which holds that analysis of empirical data leads to better understanding of a player's value and hence better business decisions.
Barua and his colleagues note that unlike other enterprise initiatives that often promise better bottom-line results, improving the quality of data is well worth the expense. Their report concludes: “The cost of increasing effective data is relatively minor compared to the substantial returns.”
IBM expands global cloud capabilities with advanced #SmartCloud services & new customer adoption http://t.co/qpbR1XxK #ibmcloudStill confused to think of your #cloudmoment! Here are some good quotes that can help you think of your own http://t.co/3dsI0nO6 #ibmcloudRT @Shubhs77: I experience #cloudmoment whenever I upload my Daddy's fav songs/files on the Dropbox installed on his phone. He just need ...Good morning @cloud_indonesia! When have #cloud touched your life? Share your #cloudmoment! Check out our more at http://t.co/J4nxZKQZWe've launched a new site with stories of the moment cloud "clicked" for folks. Check it out & share your #cloudmoment! http://t.co/J4nxZKQZGood Morning from Asia/Pacific! #ibmcloudThat's it for me! More updates from the #IBMcloud Forum Chicago coming your way tomorrow. Over to Asia/Pacific.@RCChicago Thank you!*Brand new* video: Innovate without boundaries and harness the power of cloud >> http://t.co/gxSPLFbL #ibmcloudLots of #cloudmoment stories here today @RCChicago. http://t.co/X1JRs370
Like us on Facebook 
Follow us on Twitter 
Get the Smarter Tech Newsletter 
Register to view the archived "Data Center Optimization Techniques: Stop Wasting Time & Money" eSeminar
Register Now > 
