Tue. Mar 19th, 2024

Content Assessment: Observations on Business Confidence

Information - 90%
Insight - 90%
Relevance - 90%
Objectivity - 100%
Authority - 100%

94%

Excellent

A short percentage-based assessment of the qualitative benefit of the recent post highlighting observations from the Summer eDiscovery Business Confidence Survey.

Editor’s Note: The results of the recent Summer 2020 eDiscovery Business Confidence Survey present the unfortunate and continuing impact of COVID-19 on the business of eDiscovery. However, for these pandemic-driven results to be fully understood, they should be viewed through the contextual lens of the results of all nineteen surveys that have been administered to eDiscovery professionals since the inception of the eDiscovery Business Confidence Survey in early 2016.

The Business of eDiscovery in the Summer of 2020

The eDiscovery Business Confidence Survey is a nonscientific quarterly survey designed to provide insight into the business confidence level of individuals working in the eDiscovery ecosystem. The survey consists of nine core multiple-choice questions focused on factors related to the creation, delivery, and consumption of eDiscovery products and services. Additionally, the survey contains three optional questions focused on the business operational metrics of days sales outstanding (DSO), monthly recurring revenue (MRR), and revenue distribution across customer bases.

Specific survey questions include:

  • Which of the following segments best describes your business in eDiscovery?
  • How would you rate the current general business conditions for eDiscovery in your segment?
  • How do you think the business conditions will be in your segment six months from now?
  • How would you guess revenue in your segment of the eDiscovery ecosystem will be six months from now?
  • How would you guess profits in your segment of the eDiscovery ecosystem will be six months from now?
  • Of the six items presented below, what is the issue that you feel will most impact the business of eDiscovery over the next six months?
  • In which geographical region do you primarily conduct eDiscovery-related business?
  • What area best describes your primary function in the conduct of your organization’s eDiscovery-related business?
  • What area best describes your level of support in the conduct of your organization’s eDiscovery-related business?
  • How would you characterize the trajectory of your organization’s Days Sales Outstanding (DSO) during the last quarter?
  • How would you characterize the trajectory of your organization’s Monthly Recurring Revenue (MRR) during the last quarter?
  • Which of the following statements best describes the distribution of your organization’s revenue across your customer base during the last quarter?

Initiated in January 2016, the survey has been administered nineteen times with 2,189 individual responses. The survey is open to legal, business, and information technology professionals operating in the eDiscovery ecosystem, and individuals are invited to participate primarily via direct email invitations.

The latest survey was administered in the summer of 2020 and had 100 respondents in roles that included tactical execution (40%), operational management (30%), and executive leadership (30%). Industry segments represented in the survey included software and service providers (31%), law firms (28%), consultancies (22%), corporations (12%), governmental entities (4%), media and research professionals (1%), and others (2%).

Based on the aggregate results of nineteen past surveys, the following findings and charted overviews of responses to survey questions may help in understanding the collective mindset of many industry experts regarding the business of eDiscovery.

Eighteen Survey Observations

Observations on Business Conditions (Charts 1-4)

Business Climate (Chart 1 and 2)

  • In the summer of 2020, 76% of eDiscovery Business Confidence Survey respondents felt the current business conditions are good or normal. This combined confidence level represents a 7.4% increase in these same feelings when compared to the spring of 2020 where 68.6% felt the conditions were good or normal.
  • Exactly 40% of survey respondents characterized the current business climate as good. This represents an increase from 27.3% of respondents who viewed the business climate as good in the spring of 2020. This strong increase from the spring of 2020 represents a measured optimism in the current general business climate for eDiscovery.
  • Only 24% of respondents classified the current business condition as bad. This represents a solid decrease of 7.4% in this area over the last quarter. This is also the second-highest percentage of respondents viewing the current business conditions as bad since the inception of the survey, only trailing last’s quarters 31.4% COVID-19 accelerated cooling of business confidence.
  • In the summer of 2020, 48% of eDiscovery Business Confidence Survey respondents felt that business climate conditions will be better in six months. This is higher than sentiment in the spring of 2020, where 37.8% of survey respondents felt that the business conditions would be better in six months. This is also the highest percentage since the winter of 2019 when 52%  of respondents felt that business conditions would be better in six months.
  • The number of survey respondents that felt the business conditions will remain the same in six months increased significantly to 48%. This rebound from 39.5% in the spring of 2020 represents a warming of business confidence.
  • The number of respondents expecting the business climate of eDiscovery to be worse in six months decrease dramatically to 4% in the summer of 2020, down 18.7% from the spring of 2020. This percentage of respondents who felt the business climate will be worse in six months appears to portray a pre-COVID optimism regarding business confidence.

Revenue Expectations (Chart 3)

  • In the summer of 2020, 41% of survey respondents felt that revenue in the next sixth months will be higher than today. This percentage is significantly higher than sentiment on this metric in the spring of 2020 (32%) which was the lowest rating in this area since the inception of the survey.
  • Almost half of the survey respondents (47%) felt that revenue in the next six months would not change. This represents a strong 13.3% increase quarter over quarter from 33.7% in the spring of 2020.
  • The percentage of respondents who felt that revenue in six months will be lower than today decreased from 34.3% in the spring of 2020 to 12% in the summer of 2020. While a dramatic drop from last quarter, this percentage is still the second-highest percentage of respondents who felt this sentiment in this area since the inception of the survey.

Profit Expectations (Chart 4)

  • More than one-third of survey respondents (35%) felt that profits will be higher in six months than they are today. This is a strong increase from the spring of 2020 when only 25% of respondents estimated profits to be higher in six months.
  • The percentage of respondents who felt that profits will be the same in six months increased significantly quarter over quarter from 39.5% in the spring of 2020 to 48% in the summer of 2020.
  • The percentage of respondents who felt that profits in six months will be lower than today significantly decreased quarter over quarter from 35.5% in the spring of 2020 to 17% in the summer of 2020. However, this percentage is tied for the second-highest percentage of respondents with this sentiment in this area since the inception of the survey.

Observations on Business Impact Factors (Chart 5)

  • In the summer of 2020, 56% of respondents viewed budgetary constraints as potentially having the greatest business impact on their business in the next six months. This percentage is the highest of all concerns represented in the survey and also is the highest rating for any business performance concern since the inception of the survey. This is also the eleventh time in nineteen surveys that the issue of budgetary constraints has been the top concern or tied for the top concern by survey respondents.
  • The percentage of respondents that viewed increasing types of data as a top business concern increased strongly in the last quarter from 8.1% in the spring of 2020 to 14% in the summer of 2020. This is a solid rebound from spring 2020 which had the lowest rating in the category since the inception of the survey.
  • Increasing data volumes continue to be a consistent concern for eDiscovery professionals with 14% of summer survey respondents viewing data volume challenges as potentially having a substantial impact on business in the next six months. However, the level of respondent concern in this area is the lowest since the inception of the survey.
  • The percentage of respondents viewing the impact of data security as a top business issue decreased slightly from the last quarter and is now viewed as the top concern by 7% of survey respondents. The level of respondent concern in this area is also the lowest since the inception of the survey.
  • The impact of a lack of personnel on eDiscovery business performance decreased during the last quarter and is the top concern for only 6% of survey respondents.
  • In the summer of 2020, the impact of inadequate technology as the top business issue decreased by 2.2% from the last quarter and is now viewed as the top concern by only 3% of survey respondents. This is the lowest rating of any business performance impact concern in the summer 2020 survey. It is also is the seventeenth time in nineteen surveys that the impact of inadequate technology has been rated as the lowest area of business performance concern by survey respondents.

Survey Charts

(Charts Can Be Expanded for Detailed Viewing)

Chart 1: How would you rate the current general business conditions for eDiscovery in your segment?
Subjective feeling of business performance when compared with business expectations.

1 – General-Climate-Overview-Aggregate-Summer 2020

Chart 2: How do you think the business conditions will be in your segment six months from now?
Subjective feeling of business performance when compared with business expectations.

2 – General Climate Overview + Six Months – Aggregate – Summer 2020

Chart 3: How would you guess revenue in your segment of the eDiscovery ecosystem will be six months from now? Revenue is income generated from eDiscovery-related business activities.

3- Revenue Overview + Six Months – Aggregate – Summer 2020

Chart 4: How would you guess profits in your segment of the eDiscovery ecosystem will be six months from now? Profit is the amount of income remaining after accounting for all expenses, debts, additional revenue streams, and operating costs.

4 – Profits Overview + Six Months – Aggregate – Summer 2020

Chart 5: An Aggregate Overview of Issues Impacting eDiscovery Business Performance Challenges that may directly impact the business performance of your organization.

5 – Issues Impacting eDiscovery Business Performance – Aggregate – Summer 2020

Chart 6: Survey Participant Overview

6 – Survey Respondents – Individual and Aggregate Overview – Summer 2020

Chart 7: Survey Participant Level of Support Overview

7 – Survey Respondents by Level of Support – Aggregate – Summer 2020

Chart 8: Survey Participant Industry Segment Overview

8 – Survey Respondents by Industry Segment – Aggregate – Summer 2020

Running Listing of Survey Results

Additional Reading

Source: ComplexDiscovery

 

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