Do Investments in Big Data Analytics Generate ROI?

07 Sep

Data is the new oil. The global economy in the last century was essentially fuelled by black gold. Today’s data-driven smart economy has grown much faster than the economic growth of the yesteryears. Big Data brings big opportunities and the ability to achieve exceptional growth rates for firms and economies.

Growth and Adoption
A recent report (Research and Markets, 2015) expects annual spending in the Big Data technology and services market to grow to $72 billion by 2021. The emergence of Big Data and the insights it unlocks through analytics has impelled it to the top of corporate agendas. Big Data Analytics solutions are imperative for organizations that desire to compete. A survey of over 1000 IT executives found that 53% of participants are either planning to or have already started executing data-driven projects. Around 30% agree that analytics has improved decision-making(IDG Enterprise, 2015).

What about ROI?
Despite reaping benefits through Big Data Analytics initiatives, businesses face challenges such as lack of relevant talent, data governance, data security and difficulty shaping a data-driven culture. With all the positive press Big Data Analytics is attracting, one critical unanswered question that still lingers is whether the adoption of Big Data Analytics is generating a return on investment. To answer this question, this research conducted a survey of analytics professionals to explore the benefits delivered by Big Data Analytics.

Literature Review

  • There is a dearth of literature examining ROI in analytics
  • 2010 survey found that 33% of the organizations were unclear on how to determine the returns on their business analytics projects (IDC, 2010)
  • Only a small number of firms are meticulously capturing the ROI for their Analytics investments. (Davenport & Dyche, 2013)
  • Inexperience of early adopters results in informal project execution with primary goal being the implementation without considering metrics for success (Shim et al., 2015)
  • Every dollar invested in analytics returns $13.01 (Nucleus, 2014)
  • Business leaders are looking at analytics as more than just a means to reduce costs or increase revenue (Davenport & Dyche, 2013)
  • Research by technology firms found varying numbers of executives admitting to a positive ROI:
    • 2% (ZS Associates, 2016)
    • 27% (Capgemini & informatica, 2016)
    • 66% (Forbes & Teradata, 2015)


This research utilized both qualitative and quantitative approaches. Based on the literature review and survey data collected, the researcher has made generalized observations.

Literature Review Sources

Scholarly articles from Google Scholar, RULA, online academic journals, technology research publications and various online resources.

Statistical Methods

  • “Survey Monkey” platform for survey creation
  • REB (Research ethics board) approval granted
  • Descriptive analysis conducted using Excel
  • Survey included 25 questions
  • 33 complete survey responses received


  • 46% of participants reported ROI was positive, 25% reported it was negative, whereas the rest were uncertain
  • Benefits stated in the literature review matched participant sentiments in our survey
  • Most frequently cited benefits for Big Data Analytics are:
    • Increase in Customer or Operational Insights
    • Faster & Accurate Decision Making
  • Least cited benefit was Additional Revenue Streams
    • Success of project is measured in financial terms


Note: The above findings were part of a Major Research Project completed as part of my MBA program at Ted Rogers School of Business. The project was completed in collaboration with professor Murtaza Haider, author of Getting Started with Data Science.

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