Most companies make IT investments in terms of money and time expecting to have a better business performance. But is there any measurable evidence of a direct dependence between improved information technology, especially, data management and financial consequences? The study from the University of Texas (source: "The Benefits of Improved Data – Quantified At Last!") found the impacts of effective data on productivity of employee and key financial performance indicators for a company. The research has been conducted for a Fortune 1000 business (median 36,000 employees and $388,000 in sales per employee). They found that a 10% increase in:
- data conciseness and consistency results in a 15% average increase in sales per employee
- data accuracy and accessibility results in a 16% average increase in return on equity (ROE)
- mobility of data for the sales force results in a 1.4% average increase in return on invested capital (ROIC)
- intelligence and remote accessibility of data results in a 0.7% average increase in return on assets (ROA)
The findings demonstrated the often dramatic impacts from even marginal improvements in data quality and usability.
In conclusion, there is a noticeable correlation between key data management elements and business results. The revealed relationship between improved data management and increased business performance may encourage many companies to pay more attention to their company’s data management area.
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