Disconnect Between Data and Decisions Proving Costly  Study

Majority of critical business decisions are based on "gut feel," rather than fact, executive survey finds


Majority of critical business decisions are based on "gut feel," rather than fact, executive survey finds

San Jose, CA July 20, 2004 Executives throughout the United States and Europe are frustrated with their inability to access the information required to make sound decisions, and the majority of executives acknowledge that more than half of the critical business decisions made within their organizations are based on "gut feel" and experience, rather than sound and verifiable information, according to a new research study.

In a survey for the study, conducted by BusinessWeek Research Services and business intelligence (BI) solutions provider Business Objects, the majority of survey participants 77 percent indicated that they were aware of bad business decisions made within their organization because of insufficient information.

In addition, nearly all participants recognized that inefficient information access significantly has an impact on the overall productivity of their organizations, and the survey also showed that businesses are buried by a glut of incompatible applications and databases, and organizations are struggling to make the various systems work together.

"The research results indicate that sub-par information access and greater pressure to make sound decisions have conspired to undermine the confidence that executives have in the ability of their organizations to perform at optimal levels," said Chris Caren, vice president of corporate marketing at Business Objects. "These bad decisions may involve millions of dollars and compromise a company's competitive position. Moreover, decisions made on inaccurate or incomplete information are apt to be repeated until the problem data is corrected."

Other key findings from the research include:

  • Two-thirds of executives said that more than half of their important business decisions are based on "gut feel" and experience, rather than on sound and verifiable information.

  • 77 percent of respondents are aware of bad decisions that managers have made within their organizations because they did not have access to accurate information.

  • A chasm exists between low-level tactical decisions and high-value decision making, with a majority of time spent on routine, day-to-day tactical decisions, rather than on strategic decisions with the greatest impact on business success.

  • More critical business decisions need to be made today compared to two years ago, and it is becoming more challenging to make important business decisions, according to the survey participants.

  • Data retrieval is not just an annoyance, but has a material impact on overall productivity of the business, the participants reported.



Caren suggested that Business Objects own business intelligence solutions can help by providing one version of the truth, bringing accountability to information access and the decision making process.

For the study, "The Fact Gap: The Disconnect Between Data and Decisions," a survey of 675 executives assessed the state of information access and decision making within organizations throughout the United States and Europe. The survey was conducted by BusinessWeek Research Services on behalf of Business Objects.

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