Logistics Minded

Where’s the ROI in Big Data?

What is the return on investment (ROI) for big data analytics initiatives? The question may seem simple, but in fact it’s devilishly difficult to answer. Nevertheless, Teradata recently set out to answer that question, and to quantify the value that organizations are finding with big data.

In the study, titled “Betting on Big Data,” Teradata sliced and diced the ROI question from several angles. The analytics giant partnered with Forbes Insights and McKinsey in preparation for the study, which involved 316 senior data and IT decision-makers at companies with average revenue of $500 million.

If the survey had to be summarized in one sentence, it would probably look like this: About two-thirds of companies are reporting solid results from their investments, while about one-third percent are still searching for a return.

Teradata’s Chris Twogood is mostly happy with the numbers. “I think the big essence of the study is that people are getting value from their investments but it’s hard,” the vice president of product and services marketing for Teradata tells Datanami. “It’s not just, ‘Lets go buy some technology deploy it and it’s great.’ It’s about being able to build data into the DNA of the company, which means you have to deal with people and process and technology, and build a culture to adopt it.”

“I was pleased with it, especially with the size of the companies,” Twogood says. “It’s asking a lot to take a specific initiative and attribute [value to it]. How do you fundamentally associate an ROI back to an initiative? Depending on the size of these companies, if you can save single digits in your operational efficiency or you can grow revenue without introducing new products or channels” then you’re doing good.

“I think it will continue to grow,” Twogood continues. “I don’t think we’ll hear companies say ‘Big data analytics alone grew my company by 15 or 20 percent.’  I think that’s crazy for a single initiative. But as this evolves, you’ll absolutely see it grow.“



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