Major corporations are lacking in data forecasting accuracy and could save hundreds of millions of dollars each year with improved utilization of existing information assets, according to the latest findings in an extensive
The study, entitled “Measuring the Business Impacts of Effective Data,” is the final of a three-part analysis of more than 150 Fortune 1000 firms from various industries.
Mobility and forecasting were the two greatest areas for improvement noted in the study and by researchers. A 10% increase in sales force mobility leads to a more than 7% spurt in asset utilization, which, for the media organization in the sample with $4 billion in assets, meant a reduction of $271 million in total assets annually, the study indicated. Planning and forecasting data accuracy jumped by 18.5% when business intelligence attributes were increased by at least 10%.
Anitesh Barua, lead researcher and distinguished professor at UT-Austin, says that most large businesses still have room for improvement in finding operational efficiencies in the top level of BI. The biggest competitive advantages and savings researchers found were when corporations were able to develop “smart,” customized data systems across departments, a process that Barua admits takes time and investment.
“It’s different from how we thought about it five or 10 years ago. Increasingly things are becoming so complex … where planning, forecasting and utilizing are becoming huge challenges,” Barua says. “With all of these customization strategies, there are critical elements to getting to know a customer and to be able to sell better. And you could do all those things but still be inefficient.”
Rather than just pumping more money into the top end of a data system to find efficiencies, sometimes combining existing information can find big rewards later on, Barua says. He gave the example of one corporation from the study that compiled a global list of parts providers for their operations. That way, when something breaks down or is needed, the company can quickly and easily find the closest and cheapest spot for that part, saving time and money.
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