Finding Value in the Information Explosion

The rapid growth of data creates new opportunities for smart analytics and improved customer service — but only if IT and business management can work together.

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Using data from its ERP system, Campbell Soup identified opportunities to reduce costs.

Image courtesy of Flickr user KJGarbutt.

Modern enterprises are awash with data, and in most organizations the volume of data is expanding by 35%-50% every year. Today’s companies process more than 60 terabytes of information annually, about 1,000 times more than a decade ago. Moreover, most of the data companies collect, create and manage today are unstructured — located in word processing documents, spreadsheets, images and video that can’t easily be retrieved or interpreted.

How well are companies managing the data explosion and capitalizing on the opportunities it presents? To what extent are they extracting value from the data at their disposal? To answer these questions, we and our colleagues from seven IT research centers studied data- and information-related activities at 26 corporations and large nonprofit organizations in the United States. (See “Related Research.”) More than 80% had annual revenues of more than $1 billion. They represented a wide range of industry sectors, including retail, healthcare, manufacturing, education and government.

Despite the buzz around “big data,” most organizations in our study were focused on the challenges of storing, protecting and accessing massive amounts of data, efforts for which IT is primarily responsible. But these organizations have not spent significant resources on the business opportunities possible with such data. Our research shows that while the IT unit is extremely competent at storing and protecting data, it cannot make key decisions that turn data into increased business value. Only a few CIOs and other IT executives reported that their organizations were succeeding at generating significant business value from their data.

Within organizations, business leaders must take the lead in making better use of data.

Why the Information Explosion Is a Top Management Concern

Related Research

C. Beath, I. Becerra-Fernandez, C.F. Gibson, M. Kleeman, R.L. Nolan, J. Rockart, J. Ross, J. Short, P. Tallon and M. Winograd, “Capturing Value from the Information Explosion,” Industry Report 2012-4, Center for Large-Scale Data Systems, San Diego Supercomputer Center, UC
San Diego, in press.

In every organization we studied, data growth far exceeded revenue growth. The yearly increase in the volume of stored data ranged from zero for a company that was actually shrinking in every sense (revenues, employees, etc.) to 150% for a hospital group.


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