- 45 percent of respondents likely to change valuation or
investment opinions as a result of a company's D&A
strategy.
- 52 percent of respondents believe D&A strategies have
begun to deliver better business performance or will do so in the
near future
- 62 percent of respondents say that they would view investing
in a company in their sector more favorably if it used D&A to
improve operating performance
NEW YORK, July 7, 2015 /PRNewswire/ -- Buy and sell-side
analysts anticipate a significant rise in the strategic use of data
and analytics to drive investment decision making, valuations, and
improvements to companies' performance in coming years, according
to Data and Analytics – A New Driver of Performance and
Valuation, a new global report by KPMG International and
KPMG LLP in the U.S. Importantly, 45 percent of respondents stated
that they were very or somewhat likely to change their valuation or
investment opinions of companies over the next two years as a
result of their D&A strategy. In addition, 52 percent believe
D&A strategies have already begun to deliver better business
performance or will do so during this period.
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"The results of our study illuminate one of the key variables in
the complex process of capital markets valuation as company boards
of directors look to the future," said KPMG U.S. Data &
Analytics Leader Brad Fisher.
"D&A will undoubtedly alter the competitive landscape in the
longer term, rewarding some companies and punishing others.
Companies that are willing to see the value in the vast amounts of
data being collected today sense a significant opportunity ahead,
with respondents emphatically stating that they would view
investing in a company in their sector more favorably if it were to
use D&A to control costs, shrink inventory, and optimize
resource allocation."
Additionally, the data revealed that the use of data and
analytics by issuers (publicly traded companies) has already begun
to alter the competitive dynamics of nearly all industries, with a
vast majority (82 percent) of investors and equity analysts
expecting some level of disruption from D&A during the next
three years. As part of the anticipated disruption, investors and
analysts believe that D&A strategies will improve company
performance and bring higher valuations.
A majority (52 percent) of all respondents believe that D&A
strategies have already begun to deliver better business
performance to companies or will likely do so within the next two
years. One-third of respondents also believe that proactive D&A
strategies reward companies with higher valuations or will do so
during this period.
OPPORTUNITIES VARY BY SECTOR
The results of the study also indicate that investors and
analysts expect D&A to enable companies across sectors to
achieve various broad business objectives over the next two years.
These include improvements in operating performance (i.e.,
increased profitability), followed by companies' expansion of
current lines of business, risk management, and finally expansion
into new products and business models.
Respondents' views regarding which specific D&A
opportunities are most attractive for companies vary considerably
from sector to sector. Of all respondents, 54 percent expected
D&A strategies to cause a dramatic or moderate disruption of
competitive dynamics over the next three years across all sectors.
By individual sector, however, the results show that the most
likely disruptions from D&A—along with the accompanying
opportunity and risk—are expected in the technology sector and the
business and professional services sector. Of respondents focused
on each, 71 percent and 70 percent expect D&A strategies to
cause a dramatic or moderate disruption in the technology sector
and in the services sector, respectively, during this period. These
sectors are followed by the consumer, financial, health care,
capital goods/industrials, energy, and basic materials sectors.
"For companies looking to identify the business goals to which
they should apply their D&A efforts, our sector-by-sector
rankings serve as a useful guide for resource allocation," said
Marshall Toplansky, KPMG's Managing
Director of U.S. Data & Analytics. "In the services industry,
for example, we found that investors and analysts would most
favorably view investing in companies that use D&A to develop
new business models and information products, to improve operating
performance by controlling costs, and to expose fraud. In the
capital goods and industrials sector, on the other hand, investors
and analysts favor companies' using D&A to forecast business
performance faster."
REGIONAL VARIATIONS ON KEY FINDINGS
Regional comparisons among the US/Canada, Europe, Asia
and Latin America showed marked
differences in key areas. Regarding views on whether investors
would change valuation or investment opinions over the next two
years as a result of a company's D&A strategy, 72 percent of
respondents in Asia and over half
of respondents from Europe and
Latin America said that they would
do so, compared to 41 percent in the US/Canada.
Similarly, respondents in Latin
America and Asia ranked
highest – 92 percent and 73 percent respectively – among the
regions on whether the use of sophisticated D&A to improve
operating performance would favorably influence their investment
decision or recommendation. The response from the two regions were
notably higher than US/Canada
respondents at 65 percent, and Europe, the lowest at 44 percent.
A RELATED REPORT
Additionally, in a recent KPMG International survey report of
700 senior business executives, Going Beyond the Data – Turning
Data from Insights into Value, key findings suggest that
businesses are also increasingly concerned about the value they
derive from their data. To address investors' call for better
operational performance, 47 percent of respondents said their
biggest motivation for using D&A was improved productivity,
with 37 percent using D&A for cost reduction. However, the
findings suggest that bridging the gap from turning insights to
value continues to be a challenge; while over 80 percent of
respondents say that D&A enables them to make faster, more
accurate decisions, 58 percent say they have difficulty relying on
the quality and reliability of their data.
THE ROAD AHEAD
"Our research validates what we've long suspected across board
rooms and investor meetings within the last decade. Data and
analytics matter at a fundamental, financial level and businesses
of all sizes need to take notice," said Christian Rast, KPMG's Global Leader for Data
& Analytics. "From the two-person startup in Silicon Valley to
the mid-cap businesses and multinational Fortune 500
companies, D&A will continue to influence investment decision
making and valuations. Those who take the time now to develop and
implement their D&A strategies – and understand how to
effectively articulate these plans – will be the ones to see the
greatest rewards in the coming years."
About Data and Analytics – A New Driver of Performance
and Valuation
In 2015, KPMG commissioned Institutional Investor Research (IIR)
to examine investors' and sell-side analysts' views in a study on
the use of data and analytics in business. IIR, in collaboration
with KPMG, composed a questionnaire on the study topic, and in
January and February 2015, collected
a total of 260 responses, consisting of 130 from senior
institutional investors and 130 from senior decision makers at
sell-side firms. Survey respondents are high-level investment
decision makers, including buy-side portfolio managers and
sell-side research directors and corporate managers companies.
Respondents came from the U.S., Canada, Australia, China, India,
Japan, France, Germany, the UK, and Brazil.
Institutional Investor Research is an independent business unit
of Institutional Investor, Inc., which publishes Institutional
Investor magazine and other titles for investment professionals.
Institutional Investor, Inc. is owned by Euromoney Institutional
Investor PLC, the leading research and publishing organization
covering the global investment and capital markets.
About KPMG International
KPMG is a global network of professional firms providing Audit,
Tax and Advisory services. We operate in 155 countries and have
more than 162,000 people working in member firms around the world.
The independent member firms of the KPMG network are affiliated
with KPMG International Cooperative ("KPMG International"), a Swiss
entity. Each KPMG firm is a legally distinct and separate entity
and describes itself as such. For more information, visit
kpmg.com.
About KPMG in the U.S.
KPMG LLP is the fastest growing Big Four accounting firm in
the United States. The U.S. firm
is part of a global network of 162,000 professionals serving
clients in 155 countries, providing innovative business solutions
and audit, tax and advisory services to many of the world's largest
and most prestigious organizations, including more than 80 percent
of the Fortune Global 500 companies.
KPMG is also widely recognized for being a great place to work
and build a career. For the eighth time in nine years, KPMG was
named one of the country's "100 Best Companies to Work For" by
Fortune magazine, advancing 17 spots on this prestigious annual
list to become the highest ranking of any Big Four accounting firm
in the United States.
Our people share a sense of purpose in the work we do, and a
strong commitment to community service, diversity and inclusion,
and eradicating childhood illiteracy.
Learn more at www.kpmg.com/us.
Contact:
KPMG LLP
Yemi Rose /
Matt Caruso
+1-201-505-6359 /+1 201 307 7275
yrose@kpmg.com / mcaruso@kpmg.com
KPMG International
Jennifer
Samuel
Global Communications
KPMG International
+1-416-777-8491
jsamuel@kpmg.ca