Elevating Investor Relations: Using data to drive strategic decisions

Bloomberg

4 days ago

Welcome to Elevating Investor Relations, Bloomberg's series on the evolving role of corporate investor relations.
The total volume of data in the world has grown exponentially, with some estimates stating that 90 percent of all digital information ever created has originated in just the past two years. After the snowballing effect of internet adoption across the business world, this increase has been driven even further by the rise of data-intensive applications like real-time data processing, cloud-based storage and in recent years the rise of artificial intelligence.
From mechanical tabulating machines to big data
To understand how we got here, let's zoom out and look at the period that laid the groundwork for today's data-driven world. The time between World War I and World War II is when statistical analysis began to emerge as a formal discipline. It started with basic, analogue statistics and progressed to mechanical tabulating machines like IBM's Hollerith Machine, which accelerated data processing through simple recording and computation functions. By the 1960s, early computers were entering the conversation.
As business operations became more complex, so too did the need to track efficiencies. Electronic data processing (EDP) allowed for large volumes of data, like inventory management or payroll information, to be maintained and processed more easily, without the need for extensive paper records, while mainframe computers allowed for this processing to be centralized for the first time.
Through the 1970s and 1980s, businesses increasingly collected and warehoused their own data to then analyze, for example, trends in HR, sales or operations. In fact, 1981 was when Market Systems, a company started by Michael Bloomberg, began to develop an independent, computerized system to provide real-time market data, financial calculations and other analytics to Wall Street firms. The Market Master terminal, later known as Bloomberg Terminal, was introduced in 1982, enabling companies to monitor broader market intelligence far more efficiently.
In the 1990s data-driven business intelligence (BI) enabled deeper mining and laid the groundwork for near-real-time analysis, while fully real-time capabilities became widespread in the next decade.
In recent years, there has been a marked increase in the adoption of alternative data, AI-powered analytics, and data-centric investment strategies. Discover how Bloomberg datasets are enabling deeper, more timely analysis through our Data Spotlight series or by downloading our special report here.
What's powering data growth
Throughout the data adoption evolution, three distinct factors have consistently contributed to the increase in data intensity:
Ongoing technological advancements – such as mechanical tabulating machines, EDP and AI.
Regulatory and stakeholder pressures – such as Europe's General Data Protection Regulation (GDPR), which governs how personal data is processed or stored, or more demand for ESG data and reporting to be included in company disclosures.
Emergence of new forms of competition – as companies continue to use more data to identify patterns to make better and more informed resource allocation decisions, they are increasingly using predictive modelling to understand a wider set of potential outcomes.
Data in the work of IRO
How does this evolution translate into the day-to-day work of investment relations officers (IROs)? For one, there is a growing sophistication of data use expected from IROs. It is now possible to analyze the investment factors that influence decision-making within a company's shareholder base. This includes tracking investor sentiment and quantifying the forces affecting the company's stock price with ease.
Additionally, substantial insights can be obtained from a company's publications, events, and other communications. This data is increasingly requested at a high level within an organization and can be wielded by IROs as a tool for driving strategic change and ensuring that IR has a seat at the C-Suite table.
IROs should bear in mind that this trend is only likely to intensify in the foreseeable future. Among the trends likely influencing the demand for data-driven decision making are:
Growing investment in data infrastructure – the CFA Institute estimates global demand for data center power will grow 12 percent on a compound annual basis from 2025 to 2030, projecting from a 20-fold increase in global internet traffic since 2010.
Proliferation of data-centric roles – OECD data shows that significant investments have been made in data-related job roles in the US, Canada and UK, with the proliferation of these job roles expanding from the technology and finance sectors into wider industries.
Widespread adoption of data-linked corporate metrics – with AI and financial modelling increasingly helping investors calculate the impact of their decisions in dollars and cents, underpinned by a regulatory environment that increasingly governs all of the above, such as the aforementioned GDPR, a growing patchwork of US privacy and data protection laws or EU laws like the Corporate Sustainability Reporting Directive (CSRD) or ESG Ratings Regulation which put additional onus on companies to be able to track various, granular data points.
IROs play a critical role in connecting their company's internal and external stakeholders. That requires not only understanding their company's overarching story but also being able to relate that story to the markets. With the right approach, growing data intensity can be harnessed rather than withstood. For leading IROs who have a grasp on the wealth of data flowing both out of and within their organizations, this presents a valuable opportunity to take control of that movement and turn it into actionable insight.
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