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Sybase and University of Texas Study Reveals Incremental Improvements in Data Effectiveness Deliver Annual Gains of up to $255

^{Published on 2010-09-27 06:11:03 - Market Wire}
 

DUBLIN, Calif.--([ BUSINESS WIRE ])--Sybase, Inc., an SAP company (NYSE: SAP) and industry leader in enterprise and mobile software, today issued the second installment of results from a new report a" aMeasuring the Business Impacts of Effective Dataa™ a" an extensive study benchmarking some of the worlda™s leading Fortune 1000 enterprises across a wide range of vertical industries by measuring the direct correlation between a companya™s IT investments and overall business performance.

"Business growth attributable to new offerings and new customers are both critical indicators of the competitiveness of an organization, and this second installment of findings begins to unearth where data improvement impacts are felt the most"

While the [ first installment ] quantifies the relationship between incremental investments in effective data and the key financial indicators of an enterprisea™s health and profitability, the second installment examines aImpacts of Effective Data on Business Innovation and Growth.a™ That is, the impact on a companya™s ability to drive innovation, organic growth and sustained customer growth a" each of which make financial performance gains possible.

aBusiness growth attributable to new offerings and new customers are both critical indicators of the competitiveness of an organization, and this second installment of findings begins to unearth where data improvement impacts are felt the most,a said [ Anitesh Barua ], distinguished teaching professor and lead researcher, University of Texas at Austin. aWe have already drawn definitive correlations between improvements in data and key financial performance metrics of businesses today, as outlined in our initial installment. Unlike previous studies, we are continuing to further peel back the onion to more holistically understand how better data influences a companya™s health and profitability.a

Even the most incremental investments made towards improving only two data attributes a" data accessibility and intelligence a" can deliver dramatic impacts on the following key business innovation and growth metrics:

• Percentage of revenue from new customersa" an essential metric for understanding the growth and sustainability prospects of an organization operating in a dynamic, competitive environment is positively influenced by data accessibility and intelligence. When both attributes are increased by 10%, revenue generated through new customers increases by 0.7 percent. Applied to the median organization in the sample, annual new customer revenue increases by $14.7 million.
• Percentage of revenue from new products and servicesa" the most commonly used measure of business innovation, is positively influenced by data effectiveness. A 10 percent increase in these attributes will lead to a 0.81 percent increase in new product and services revenue. Applied to the median organization in the sample ($17 billion in annual revenues, $2.1 billion coming from new products/services), new product and services revenue increases by $17 million annually.
• Data accessibility and intelligence improvements have the largest impact on the petroleum vertical industry. When the effectiveness of data is slightly improved, revenue growth from new products and services for companies in this market could be 14 times greater, equivalent to $255 million annually, when compared to the median organizationa™s gain in the overall study. Similarly, the industry stands to generate 15 times greater improvements in annual new customer revenue, equivalent to $225 million. Both represent the biggest improvement gains for any vertical market in these customer-focused growth measurements.
• Other vertical industries whose median revenue growth potential well exceeded the overall median include telecommunications, consulting, machine tools, retail, commercial banks, paper products and credit institutions.
• Specialty products and servicesa" commonly referred to as the [ Long Tail ], which describes how niche offerings may be sold in small quantities but collectively have the potential to represent a significant portion of revenue a" is increasingly important to diversify an organizationa™s portfolio of products and services. In examining the share of specialty products and services within each organizationa™s overall portfolio of offerings, the study found that increasing data intelligence by 10 percent leads to a 1.51 percent share increase in specialty products and services offerings, which increases business from existing and new customers alike.

aEvery day, we have conversations with our customers about how their data can be leveraged in new ways to generate revenue, whether it be through the development of new products and services or reaching a new market segment,a said Dr. Raj Nathan, executive vice president & CMO, Sybase. aIn the end, we always come back to one thing a" empowering employees with effective data so that data itself doesna™t become an impediment to business growth. This study deductively shows that simple, pragmatic improvements in data intelligence and accessibility help employees better understand evolving demand patterns, customer preferences and market dynamics that enable companies to both drive innovations to market faster and attract new customers.a

The third part of the study (to be released shortly) will apply the same data attributes to examine the operational impacts of effective data with a focus on improving the accuracy of planning and forecasting.

[ Click here ] to download a free copy of this second installment on aImpacts of Effective Data on Business Innovation and Growth.a™ [ Click here ] to download a free copy of the first installment of the report on aFinancial Impacts of Effective Data.a™

About the Study

The referenced study was commissioned by Sybase and conducted by the [ McCombs School of Business ] at the [ University of Texas ], in conjunction with the [ Indian School of Business ]. The methodology of the study involved three steps a" 1) operationalization of data attributes, survey design and testing, 2) data collection, and 3) analysis. The objective was to collect data from a variety of industries and functions. The questionnaire was tested for clarity and face validity and refined with the help of inputs from Fortune 1000 employees in functions who need accurate and timely information to make decisions or take actions (e.g., sales, forecasting, etc.). The final survey instrument was completed by over 150 respondents from Fortune 1000 firms. Financial and some operational performance data on the firms represented by the survey respondents was collected from archived sources. The empirical analysis involved two steps: Factor analysis to determine distinct attributes of data, and multiple regression analysis to test the relationships between data attributes, controls and performance measures.

About Sybase

Sybase, an SAP® company, is an industry leader in delivering enterprise and mobile software to manage, analyze and mobilize information. We are recognized globally as a performance leader, proven in the most data-intensive industries and across all major systems, networks and devices. Our information management, analytics and enterprise mobility solutions have powered the worlda™s most mission-critical systems in financial services, telecommunications, manufacturing and government. For more information: [ www.sybase.com ]. Read Sybase® blogs: [ blogs.sybase.com ].Follow us on Twitter at [ @Sybase ].

Sybase is a registered trademark of Sybase, Inc. ® indicates registration in the United States. SAP is a registered trademark of SAP AG in Germany and in several other countries all over the world.

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