Realizing a return on big data investments—within a year
This is part two in a series of easy-to-consume snapshots focused on the findings and insights from the new IBM Institute for Business Value study “Analytics: The speed advantage - Why data-driven organizations are winning the race in today’s marketplace.”
In part one, we introduced what my colleagues—Glenn Finch, Steven Davidson, Christian Kirschniak, Marcio Weikersheimer, Cathy Reese and Rebecca Shockley—found to be four transformative shifts affecting the fast-paced digital marketplace:
- A solid majority of organizations are now realizing a return on their big data investments within a year.
- Customer centricity still dominates analytics activities, but organizations are increasingly solving operational challenges using big data.
- Integrating digital capabilities into business processes is transforming organizations.
- The value driver for big data has shifted from volume to velocity.
Now let’s take a closer look at the first two shifts:
A solid majority of organizations are now realizing a return on their big data investments—within a year.
Most organizations (63 percent) realize a positive return on their analytic investments within one year, and more than one-in-four respondents (26 percent) realized a positive return within six months. This marks the start of a trend toward positive returns, with a 10 percent year-to-year uptick over the 57 percent that reported a return within a year in 2013.
Moreover, 49 percent of organizations that have implemented one or more big data technologies reported that returns met or exceeded their expected returns; another 45 percent of implementations were under evaluation. Only 6 percent reported that returns failed to meet expectations.
Customer centricity still dominates analytics activities, but organizations are increasingly targeting operational challenges.
While customer-centric objectives are still the primary focus for a majority of organizations, more are starting to integrate big data technologies into back-office and operational processes. In more than half of all organizations, business executives are demanding data insights primarily to create stronger relationships with customers: 31 percent are working to improve customer acquisition through the use of data and analytics, while the other 22 percent are targeting improvements in customer experience (see Figure 1).
But it’s not all about the customer. Two out of five organizations (40 percent) are focusing data and analytics on operational objectives, a significant increase from 2013, when only 25 percent of organizations were focused on operations. In the past year, as executives have seen front office analytics deliver powerful results, they have started to apply these new technologies to manage operational costs even more tightly. One surprise was the low level of focus on financial and risk management objectives. Given the increased levels of data management required by CFOs, as well as the broad applicability of anti-fraud efforts, we expect analytics use in this area to increase in the coming year.
In part three, we’ll take a closer look at transformative shifts 3 and 4:
- Integrating digital capabilities into business processes is transforming organizations
- The value driver for big data has shifted from volume to velocity