Businesses using customer data more productive and more profitable, says report

Inside the Datavores, released by innovation charity Nesta, explored the effect of data and online analytics on firm performance. The findings were based on surveys on online data practices and IT employment, combined with data on financial performance.

When data activity was broken down into high levels of analysis and high levels of collection, the results showed that data collection is of little use without subsequent analysis: businesses conducting high levels of data analysis – for example using regression analysis, data mining and text mining – were 11% more productive than the average. High levels of data collection resulted in no increase in productivity.

The report also found that businesses performing deeper analysis were associated with higher profitability: firms conducting more analysis on their data generated an additional profit of £3,180 per employee.

Lastly, businesses giving their employees greater autonomy to make decisions reported a “productivity premium from data use” that was almost four times higher ( 16% above average compared to 4% above average) as those with centralised decision making.

The full report can be accessed here. A shorter briefing document can be accessed here.