Information glut costs NZ economy $400m: research

Two studies from Hitachi Data Systems point to unmanageable rise in information

A glut in information is costing the New Zealand economy $400 million a year, according to research from Hitachi Data Systems.

The diagnosis follows two independent studies from research houses AMR and Deloitte Access Economics, tracking the impact of information on organisational performance.

Two years after a first report entitled The Great Information Glut was released, the latest data shows a notable increase in organisations that suffer from information mismanagement and are incapable of finding a digital cure.

Hitachi defines the information glut as the effect of an unmanageable rise in information in an organisation. It results in rising costs, process inefficiency, and organisational inflexibility.

Hitachi Data Systems chief technical officer Adrian De Luca says the transtasman study involved 402 organisations, 101 from New Zealand.

Almost every respondent – 95 percent – admitted they experienced some degree of information glut, with 25 percent reporting significant impact on organisational performance. Key symptoms include:

• increased operational expenditure (49 percent)
• inability to recover key files or data (38 percent)
• struggle to meet reporting requirements (22 percent)
• losing sales or failing to win business (17 percent)
• reputational damage (11 percent)

“We commissioned the first report in 2009 to try to understand the emerging information glut, its growth and what the impact was on business,” De Luca says. “This time, we’ve measured some other things, such as the effect of social media.

“Also, rather that just do a survey, we got Deloitte to put a dollar cost on it in terms of its drag on productivity.”

He says the information glut is a more prevalent experience in public sector organisations (42 percent) than in private sector organisations (35 percent), which is consistent with the findings in 2009.

“It’s driven by two major things: the digitisation of society, and rapidly changing behaviour, such as the adoption of electronic banking and e-commerce.

“Things like digital TV and services like catch-up TV are pushing consumers to online services.

“Unstructured data is growing considerably more than structured data.

“The problem is growing far more quickly than was anticipated [affecting the ability] to get the right strategies in place for storage.

“The major shift in information is not the ability to store it but the ability to find it.”

Ric Simes, director, Deloitte Access Economics, who has authored a resulting white paper, says: “Chronic information glut is likely to turn into a fare more acute disorder unless companies can find a way to control their data diet. Without effective organisation of data, the technology used to make sense of the data is likely to produce just more data, undermining the very relationships with partners and customers it was originally meant to support.

“Our modeling shows that the ability to effectively manage the inexorable growth in digital information can significantly lift national productivity

“Since the first research was undertaken, the explosion of social media has contributed to information glut, compounding the problems faced by many firms who complain of inadequate information storage, inadequate information storage architecture, and an inadequate IT budget.”

50 percent of the businesses surveyed had some kind of social media presence but 40 percent had no formal information strategy for their official social media presence to manage the content they generated through these new channels.