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IBM Study Finds Top Firms Embrace Information-Driven Culture

Use of analytics, data governance practices and employee empowerment set successful companies apart.
Compared to under-performing firms, top-performing companies are more than 20 times more likely to challenge the status quote within their organizations to improve the business or create new opportunities. Furthermore, the companies that excel are more than 15 times more likely to be able to predict and prepare in advance for anticipated events, and they are more than five times more likely to give employees authority to use information to make decisions and drive change.

These are among the most notable findings of a study released last week by IBM Global Business Services entitled "Breaking Away with Business Analytics and Optimization." Based on an August 2009 survey of more than 400 business leaders, the study broke respondents into two groups: "top performers" were those in the top quintile based on self-reported performance relative to industry peers while "lower performers” where those in the bottom two quintiles. Compared to the latter group, the study revealed that twice as many top performers had mastered three basic characteristics:

  • Aware. Able to gather and use information from inside and outside the enterprise.
  • Precise. Able to sort through and extract the most relevant aspects of information.
  • Linked. Able to align information with business objectives and across functions.

"The differences between the organizations that are leading their industries and those that are followers are really stark," observes Andrew Warzecha, vice president of strategy, Information Management Software division of IBM. "These organizations have made a cultural shift to allow business people to challenge existing processes and how they do business. They also have the ability to predict what's likely to happen next."

Technologies such as predictive analytics, event detection and related skills support the ability to detect patterns and trends, but the resulting insight is useless without the ability to act, Warzecha observes.

"The more difficult side is the cultural change required to really do something about patterns and trends that have been detected and to change the way you are operating as a business," he explains.

In the area of data governance, the IBM study found that top-performing organizations were three times more likely (42 percent versus 14 percent) to take a sophisticated approach to data governance, meaning having strong management systems in place, including automation of data governance tools. The survey did not spell out specific tools, such as master data management, data quality and data stewardship software, but it did describe the typical MDM/stewardship outcome of "arriving at a common language" that is consistent and accepted across functions and lines of business.

"Data governance is a hot topic that we're seeing go mainstream," Warzecha says. "It's moving out of 'we have to do this for compliance reasons' and into 'this is something we have to do better for operational and strategic reporting purposes.'" Solid data governance also enhances an organization's ability to understand and trust information so leaders can act on insights with confidence.

Of course, readers might take a survey published by IBM with a grain of salt given that it touts technologies and capabilities that the company has invested billions of dollars in providing. This year alone IBM paid $1.2 billion to acquire analytic software vendor SPSS. It also forged a new Business Analytics and Optimization practice, reassigning some 4,000 employees and investing heavily in research, technologies and related marketing initiatives.