By Dave Hannon
Ask savvy investors what metrics they analyze to determine a company’s future growth potential and two that often get mentioned include the percent of revenue a company is getting from new products and the percent of revenue it’s bringing in from new customers. They’re usually a clear indication of a firm’s level of innovation and growth.
Now read this next sentence twice: Increasing the accessibility and intelligence of data by only 10% will result in a 0.81% increase in revenue from new products and a 0.7% increase in revenue from new customers at the average Fortune 1000 firm.
Those are among the findings in an eye-opening study released this month by the University of Texas and sponsored by Sybase. According to the researchers, “Revenue due to new products and services is an indicator of a firm’s innovativeness, while revenue from new customers shows the ability of a firm to grow its market penetration and customer base. In a comprehensive study of more than 150 Fortune 1000 firms from every major vertical, we found that an improvement in two of five data attributes used in our study – intelligence and accessibility – can have a dramatic impact on a firm’s ability to innovate and grow.”
The study found that by increasing the accessibility and quality of business data to a broader user base, employees “can better spot trends, demand patterns, and improve recommendations for decision-making.” And spotting such market trends leads to innovative new products and underserved market segments to capitalize on.
And the industries seeing the biggest benefits might surprise you: Firms in the petroleum and telecom industries reported the biggest increase in sales from new customers as a result of data improvements.
I’d encourage you to take a look at the first part of the study findings as well and keep your eyes peeled for the third and final part due out soon. And when your executive management board looks to the IT organization for ideas on how IT can drive top-line results, you’ve got one more piece of evidence in your arsenal.