Sybase Analytics

Businesses spend huge sums of money on information technology – computers, networking, data storage, applications, mobilization, education – in the belief that better business intelligence leads to better performance.  But which specific investments and improvements lead to the biggest pay offs, and what is the magnitude of the return?

Sybase recently revealed the results of the first part of a ground-breaking three part study that attempts to measure the direct correlation between a company’s IT investments and business performance.  The study was commissioned by Sybase and conducted by researchers from the University of Texas in conjunction with the Indian School of Business.  The first part of the study looks at five distinct attributes of data: quality, usability, intelligence, accessibility and mobility, and examines how a 10 percent improvement in any one or two of these attributes affects business financial performance. 

Here is a depiction of the conceptual model that formed the basis of the study:

The methodology of the study involved these steps:

1. Develop a questionnaire that would elicit measures of the data attributes and financial impacts
2. Refine the survey with feedback from employees of Fortune 1000 companies across various industries
3. Conduct the survey
4. Analyze the results
   1. Use factor analysis to derive the specific variables that impact operational performance
   2. Apply multiple regression analysis statistical techniques to quantify the relationship between independent and dependent variables

The study focuses on the impacts of effective data on productivity of employees, and key financial performance indicators for a company.  Here are the highlights for a Fortune 1000 business (median  36,000 employees and $388,000 in sales per employee):

• A 10% increase in data conciseness and consistency results in a 15% average increase in sales per employee
• A 10% increase in data accuracy and accessibility results in a 16% average increase in return on equity (ROE)
• A 10% increase in mobility of data for the sales force results in a 1.4% average increase in return on invested capital (ROIC)
• A 10% increase in intelligence and remote accessibility of data results in a .7% average increase in return on assets (ROA)

The findings demonstrate the often dramatic impacts from even marginal improvements in data quality and usability.  Two subsequent reports will explore customer-focused and operational impacts.

The first part of the full report can be found here:

http://www.sybase.com/detail?id=1082805

Enjoy!

Courtney Claussen