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New Research From Hakkoda Reveals the Business Cost of Data Sprawl and Impact on Innovation

Hakkoda, the cloud data experts specializing in Snowflake, issued research on the state of data and analytics, revealing the hard and soft costs of data sprawl in medium and large businesses. The survey of more than 300 IT and business data leaders, commissioned by Hakkoda, showed that data sprawl is a compounding and costly issue that is impacting innovation and is likely to worsen with today’s proliferation of tools and scarcity of talent. 

“According to McKinsey data, a mid-sized company with $5 billion of operating costs might spend $250 million on data management,” said Ha Hoang, Chief Operating Officer and co-founder of Hakkoda and the former head of client-facing cloud services at McKinsey. “Those are just the hard costs. When you factor in the impact of inefficient and duplicate processes, bad data and the inability to innovate — which this research shows are fundamental issues — the business costs are much greater.”

Key findings from the report include:

-Data sprawl is a real issue in larger enterprises.

  • 97% of data leaders have multiple business intelligence (BI) and reporting apps; 1 in 4 have more than 10 apps
  • 35% use five or more data warehouses
  • 25% had over 500 data analysts in the organization 
  • Nearly a quarter rely on 10 or more service providers 

-Data sprawl is costly to business, but the true costs are hard to pin down.

  • When asked where the cost of data analytics was highest, the top answers were BI and reporting (54%), data architecture (52%) and governance (49%)
  • Only 3% of respondents said they understand the full cost of their data analytics programs; 6% said they don’t even bother

-Talent scarcity is adding to costs and preventing innovation

  • 97% of respondents report problems finding talent 
  • Organizations struggled the most finding data scientists trained in machine learning (48%) and data architects (34%)
  • 94% of respondents reported barriers to innovation in their data programs
  • When asked what prevented leaders from innovating or creating new offerings, the number one answer was insufficient internal expertise. Internal bureaucracy and inability to tap into existing resources was a close second. 

“Data sprawl is clearly an issue, and leaders tend to use data sprawl as an argument for tighter controls. However, tighter controls are not the way to unlock the value of data. Data derives its value from utility so it’s setting up a false choice,” said Erik Duffield, CEO & co-founder, Hakkoda. “Modern governance practices and platforms like Snowflake can increase control while providing greater speed, quality and access.”

Hakkoda is a services firm specializing in Snowflake’s Data Cloud, and helping businesses get their data house in order. With expertise across the data value chain, Hakkoda helps organizations address the problem of data sprawl, without choosing between control and speed. 

Survey Methodology 

Hakkoda commissioned Dimensional Research to survey 312 IT and Line-of-Business leaders responsible for data and analytics initiatives at mid-to-large sized companies about the current state of their analytics environments. Responses were captured between Sept. 17-24, 2021.

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