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THE CIO I N S I G H T RESEARCH STUDY

Information Governance's Big Payback

Thinking about information governance? Think about "information resourcemanagement," too. This term, long used in the public sector to describe the IT function, gets to the heart of an often overlooked insight: Information is a re-

source to be managed for maximum value, be it for the business, or public, good.

Unfortunately, according to this month's CIO Insight study on informa- tion governance, corporate America's in- formation resources need much better management. Users are skeptical about the quality and rehability of their com- pany's data, and frequently complain that they aren't getting the information they need. It appears that most customer information simply gathers moss.

How much better off would compa- nies be if they could manage this infor- mation more effectively? That's where information governance comes in, and makes the old concept of information re- source management real. Only one in three respondents' companies has an effective information governance pro- cess, but according to our results, compa- nies that are effective fare much better at using information for business advan- tage, improving business processes, and boosting productivity and profitability.

CIOs don't have all the answers yet on the mechanics of how information governance should work, but it's clear

say their company is highly effective at processing and using information for business advantage.

say their business users complain they are not receiving the information they need.

28% say the quality, usability and accessibility of their internal structured data is excellent.

of companies have an information governance process.

good information governance brings bottom-line benefits: Fifty-nine percent of companies with an information goverr\ance process say they are very effective at using financial information to improve profitability, compared with 42 percent of firms that lack governance processes. With a payback like that, companies can't afford to overlook infor- mation governance. —Allan Alter

FINDING Just two-thirds of executives say creating and using information is one of their company's strengths. Given how deeply companies havecometodependon their information systems,

that percentage seems low. Clearly, iT executives feel there is room for improvement; they rated making better use of information among their top business priorities in our April "CIO Role" survey But where are they lagging?

1.1 My company is highly effective at processing, understanding and using the information ^'^°^ we collect for business advantage.

less than $ioo million Sioo - $999 million ($1 billion or more

Agree

Disagree

53% of financial firms 5ay they are very effective.

48% of manu- facturers say they are very effective.

1.2 My company is very good at using information to improve business processes.

Agree

Disagree

total

63%

I less ttian Stoo million I $ ! • • - $999 miilion $1 biliion or more

62%

57%

73% I

27 I

F I N D I N G Howdocompaniesbenefit most from their information? By cutting costs and improving customer satisfaction. But harnessing information for growth strategies such as cross-sell-

ing and improving profitability is much more difficult, as is improving business processes, speeding uptime to market and improving supply chains. There is much to gain by tightening up information management.

2.1 The way my company collects and uses customer information is very effective at achieving the following results:

Improving customer satisfaction

Retaining more customers

Attracting new customers

Increasing customer profitability

Cross-selling products and services

total

73%

My company is highly effective st processing, understanding and using the information we collect for business advantage,

agree 0 disagree

S0%[

2.2 The way my company collects and uses financial information is very effective at achieving the following results:

N-Z59

My company Is highly effective at processing, understanding and using the information me collect for business advantage.

Reducing costs

Meeting regulatory requirements

Improving profitability

Improving productivity

Increasing revenues

total

67%

agree I disagree

71%

69 C

57% I

57 I

57 C

52 C

49 C

40 [

2.3 The way my company collects and uses business process information is very effective at achieving the following results:

N-247

My company is very good at using information to improve business processes.

Reducing the cost of doing business

Improving quality of products and services

Collaborating with customers and suppliers

Improving supply-chain performance

total

68%

I agree I disagree

Improving speed t o market 27

76% 1

681

58 I

33 I

331

49% C

49 [

34 [

www.cioins)ght.CDm

FiNDING Few companies excel across the board at producing and using high-quality information.

Even respondents who claim to be "highly effective" at creating and using information

have many areas of weakness—in particular, handling unstructured data. Why? Users feel they don't have

access to the information they need, while executives worry about the trustworthiness of the data and

what kinds of information actually has value for users. Simply shoving more and more information into

the network isn't sufficient.

3.1 What percent of your company's data is structured? What percent is unstructured? ^^^°'

Only 4 percent of respondents rated their data excellent in all four areas.

Structured

Unstructured

Total

61%

education

63%

financial rranufacturing retail/ servitM government healthcaie (noncomputing) wholesale

3.2 How would you rate the quality, usability and accessibility of the following kinds of data at your company?

exceltervtj ©good ©fair

Internal structured data

External structured data

Internal unstructured data

External unstructured data

I poor

3.3 My company's managers often doubt the accuracy and reliability of the information our company generates or imports from outside.

N-294

Agree

Disagree

total © less than Sioo million © S'oo - S999 million © Si billion or more

39% 37% c m A i v i " — " 1 37% L i m _

61 63 ( ' I 5911 i l l

43% of respon- dents at $1 bfilion-plus companies agree.

3-4 Our business users frequently complain that they are not receiving the information **' they need.

total © less than SlOO million © Sioo-Sggg million © Si billion or more

55% ^ ^ s a —Agree

Disagree

52% 46%

48 54 451

3.5 A majority of the customer data we collect goes unused. My company is highly effective at processing, understanding and

using the information we collect for business advantage.

total I agree I disagree

Agree 53%J 45% C 68%

Disagree 47 SSC 32

N.2ft«

50% of non- computer manufactur- ers and 44% of healthcare organizations agree.

3.6 At my company, it is clear who is responsible for the quality of information obtained from suppliers, customers and other outside sources.

My company is highly effective at processing, understanding and using the information we collect for business advantage.

I agree I disagree

Agree 31%

Disagree 45 33 69 C

N-299

www.ciomsight.com

Just 45% of smaller com- panies have an information governance pro- cess, compared to 68% of large companies.

Respondents claiming an effective infor- mation gover- nance process are far more likely to say they are adequately covered.

FINDING Oniy one in three companies has an effective information governance process. Information governance involves establishing rules and decision-making rights for the creation, collec-

tion, analysis and use of information; it answers the question "what information do we need, and who is

responsible for it?" But many companies lack an information governance process, especially for external data,

and often the processes they do have aren't effective. Clearly, there's a lot of work to be done in this area.

4.1 Does your company have an information governance process? N.290

• My company is highly effective at processing, understanding and using the information we collect for business advantage.

total I agree # disagree

Yes 59% 40K

No 48 41C

4.2 What kinds of data are covered by your company's information governance process? N.147

I agree

- My company is highly effective at processing, understanding and using the information we collect for business advantage.

# disagree

Internal structured data

External structured data

Internal unstructured data

External unstructured data

99% 98% C 100% C

63 L

69 C

381

4SL

58 [

4.3 My company's information governance process is highly effective. N-141

- My company is highly effective at processing, understanding and using the information we collect for business advantage.

total • agree I disagree

Agree

Disagree

67% 78% I

33 22

37% I

63 C

4.4 How well are the following covered by your company's information governance processes?

N-HS

total

adequately covered inadequately covered # not covered

Information security and privacy

Information access and usage rights

Information architecture and structure

Information strategy (including its alignment with business strategy)

Information storage and deletion policies

Information quality (i.e., accuracy, completeness and timeliness of data)

83% C

81C

16%

6 1

K I 341

How the survey was done: CIO Insight editors designed the 2006 Information Governance Survey together with Equation Research, LLC (www.equationresearch.com), an Estes Park, Colo.-based supplier of custom research services. IT executives gathered from Ziff Davis Media publication lists were invited to participate in the study by e-mail. The questions were posted on a password-protected Web site, and 325 qualified respondents (113 from companies with revenues in calendar 2005 below Sioo million, 139 from companies with revenues between $100 million and $999 million, and 73 from companies with revenues of Si billion or more) replied from February 28 to March 19,2006. Of the respondents, 63% percent were ClOs or CTOs, and the rest held titles of vice president, senior vice president, executive vice president, or global or managing director of IT.

www.cioinsight.com

Information governance is important in practice, not just in theory. Across the board, companies with an information governance process are more effective at collecting

and processing information, providing higher-quality data, and getting morevaluefrom their informa-

tion—often by large percentages. Yet even when such processes are in place, many companies still have

a long way to go.

At companies that do not have a highly effective infor- mation gover- nance process, 72% and 79%, respectively, say the quality of their internal and external unstructured data is fair or poor.

5-1 How would you rate the quality, usability and accessibility of the following kinds of data at your company?

. ^ 1 , _ _ _ ^ ^ _ information governance I 1 I ~ process is highly effective

fxcellent or good fair or poor excellent or good fair or poor

Internal structured data

External structured data

Internal unstructured data

External unstructured data

80 -—HI • 1

43 J t

5.2 The way my company collects and uses customer information is very effective at achieving the following results:

I Does your company have an information governance process?

Improving customer satisfaction 73% &0%^^^Lmimimmmmm2SSS R'i'itL J'"' '-"J"

N-2n

Retaining more customers

Attracting new customers

Increasing customer profitability

Cross-selling products and services

52 6 1 E 421

46 52 E 40 [

5.3 The way my company collects and uses financiai information is very effective at achieving the following results:

I Does your company have an information governance process? ——-

Reducing costs

Meeting regulatory requirements

Improving profitability

Improving productivity

Increasing revenues

67% 73% I

65 76 E

51 59 E

4 1 5 1 E

60%

4 1 49 C

5.4 The way my company collects and U5es business process information is very effective at achieving the following results:

r Does your company have an information governance process? —

Reducingthecostofdoingbusiness 68% '''"*' • — — i - ^ ^ ^ ^

Improving quality of products and services 62 71E

Collaborating with customers and suppliers 51 56 E

Improving supply-chain performance 28 35 E

Improving speed to market 27 35 E