Firms across Europe and North America struggle to use information for competitive advantage
June 2014 by PwC and Iron Mountain
Organisations understand that information has value but are more concerned with defending their information against data breaches or legal action than they are with using it to drive competitive advantage and growth, according to a new report by storage and information management company Iron Mountain and PwC.
The 2014 Information Risk Maturity Index explores how mid-market and enterprise-level businesses in Europe and North America protect their information and use it for business benefit. Around three quarters of the companies surveyed (72 per cent in Europe and 79 per cent in North America) regard information as a business asset, yet on average just 35 per cent employ data analysts to extract value from their information.
Respondents acknowledge that information has helped them to improve their decision-making, understand their customers better and drive revenue, but its potential in other key areas remains underexploited. Just half (51 per cent) of European firms, rising to 65 per cent in North America are using information to enhance product or service innovation. Only around a quarter (21 per cent in Europe and 28 per cent in North America) use information to increase their speed to market, while at most one in ten (10 per cent in Europe, 4 per cent in North America) say that information has boosted product or service development cycles.
When asked to rank their information management priorities, the majority focus on avoiding a data breach (76 and 85 per cent for Europe and North America respectively) and avoiding legal action or a fine for non-compliance (74 and 79 per cent).
The 2014 Information Risk Maturity Index is the third annual study to measure how prepared companies are to manage and respond to information risk and address other key information trends. Whereas in previous years the research focused on European mid-market businesses, this year the research covers mid-market and enterprise-level businesses in both Europe and North America.
The study found a clear correlation between firms who are well equipped to manage information risk and those who can extract value from information. The results are broadly, and sometimes surprisingly, consistent across mid-market and enterprise firms, across both continents and across the five business sectors surveyed. Unlocking the value of information appears to be a challenge for all.
Christian Toon, Head of Information Risk at Iron Mountain, said: “The 2014 Information Risk Index reveals a considerable gap between intent and action. Firms are introducing strategies to manage information risk without ever checking whether they are effective. Similarly, while most firms claim to understand the value of information, in practical terms information is not being used to develop and launch better products and services, faster, to more customers, in more markets.
“No organisation would willingly turn down such an opportunity for competitive advantage, which suggests that the problem lies in not knowing how to achieve it. It is critical that companies get to grips with this, and adopt a responsible-yet-proactive approach to information risk and value, not just to protect the business but to let it breathe.”
PwC surveyed senior managers at 600 European and 600 North American businesses with 250 to 2500 employees and a further 600 firms across both continents with up to 100,000 employees, in the legal, financial services, pharmaceutical, insurance and manufacturing and engineering sectors. The results, assessed for France, Germany, Hungary, the Netherlands, Spain, the United States and Canada show that the average Information Risk Maturity Index score for European companies in 2014 has fallen slightly from 56.8 in 2013 to 56.1, set against a score of 100. For North America the score is 54.5.
Claire Reid, PwC Risk Assurance partner says: “Businesses face the same problems everywhere. They operate in an information landscape that is defined by the increasing volume, variety and velocity of information moving through the business, and by a wide range of risks. At the same time, there is a growing expectation that businesses should exploit information to create value. Too many companies believe they understand the risks and value of information, but are frustratingly passive about doing anything about it. Your information may be the greatest business asset you have. Your customers have entrusted you with their most personal data – you cannot afford for information management to be merely a tick box exercise.”