Mon. May 23rd, 2022
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    Content Assessment: Transfers in Order? eDiscovery Operational Metrics in the Winter of 2022

    Information - 92%
    Insight - 93%
    Relevance - 96%
    Objectivity - 91%
    Authority - 95%

    93%

    Excellent

    A short percentage-based assessment of the qualitative benefit of the recent post on eDiscovery operational metrics.

    Editor’s Note: This is the thirteenth quarterly eDiscovery Business Confidence Survey from ComplexDiscovery that has included three optional questions regarding business operational metrics. Since the introduction of specific operational questions around Days Sales Outstanding (DSO), Monthly Recurring Revenue (MRR), and customer revenue distribution, more than 1,290 legal, information technology, and business professionals have responded with their thoughts. 43 respondents shared their opinions on at least one of these three questions as part of the most recent survey and the aggregate results of the answers to all thirteen quarterly surveys are shared in the following observations and charts.


    The Kinetics of Three eDiscovery Business Metrics in the Winter of 2022

    The eDiscovery Business Confidence Survey is a non-scientific 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 includes the following three optional questions focused on the business operational metrics of days sales outstanding (DSO), monthly recurring revenue (MRR), and revenue distribution across customer bases.

    • How would you characterize the trajectory of your organization’s Days Sales Outstanding (DSO) during the last quarter? DSO represents the average number of days it takes credit sales to be converted into cash, or when a company’s account receivables can be collected.
    • How would you characterize the trajectory of your organization’s Monthly Recurring Revenue (MRR) during the last quarter? MRR is income that a company can reliably anticipate every 30 days. Revenue from one-time purchases billed at the time of purchase is not included in MRR.
    • Which of the following statements best describes the distribution of your organization’s revenue across your customer base during the last quarter? Distribution is the reduction of revenue concentration across the customer base. The customer base is the group of customers who repeatedly purchase the products or services of a business.

    Survey participants were presented with four potential answers to the optional business operational metric questions and asked to select one. The choices were as follows:

    • Increasing
    • Unfluctuating
    • Decreasing
    • Do Not Know

    The aggregate results of the answers to the business operational metric questions are shared in the following observations and charted overviews. They provide an interesting vector view of the trajectories of these important measurements and the results may also be helpful to business and legal professionals as they consider the current conditions and trends in the business of data and legal discovery.

    Key Observations in the Winter of 2022

    General

    • In the winter of 2022, 43 eDiscovery Business Confidence Survey participants chose to answer at least one of the optional business operational metric survey questions in the quarterly survey. This represents a solid number of participants given the intentional limiting of survey email requests to balance against the ongoing proliferation of new industry surveys and higher volumes of email communications initiated during the current pandemic.
    • In the winter of 2022, 79.6% of eDiscovery Business Confidence Survey participants chose to answer at least one of the optional business operational metric questions in the quarterly survey. This is a decrease in percentage from 91.8% of participants answering at least one of the optional business operational metric questions in the fall of 2021 survey.
    • In the winter 2022 survey, between 20.9% and 14.0% of the respondents (depending on the question) did not know whether DSO, MRR, or distribution of customer revenue-based measures were increasing, unfluctuating, or decreasing.

    Days Sales Outstanding (Chart 1)

    • Exactly 41.9% of survey respondents reported DSO as increasing in the winter of 2022. This is an increase from 28.8% reporting DSO as increasing in the fall of 2021. This is the highest percentage of respondents reporting DSO as increasing since the introduction of operational metric questions into the business confidence survey.
    • There was a decrease of (1.6%) in the winter 2022 percentage (30.2%) of respondents reporting DSO as unfluctuating when compared to fall 2021 reporting (31.8%). This percentage is the fourth-highest percentage of respondents reporting DSO as unfluctuating since the introduction of operational metric questions into the business confidence survey, with the highest reported percentage being 34.7% in the winter 2020 survey.
    • 7.0% of survey respondents reported DSO as decreasing in the winter of 2022. This is a strong decrease from reporting in the fall of 2021 when 18.2% of respondents noted decreasing DSO. It is also one of the lowest percentages of respondents reporting DSO as decreasing since the introduction of operational metric questions into the business confidence survey.

    Monthly Recurring Revenue (Chart 2)

    • There was a strong increase (4.2%) in the winter 2022 percentage (51.2%) of respondents reporting increasing MRR when compared to fall 2021 reporting (47.0%). It is also the highest percentage of respondents reporting MRR as increasing since the introduction of operational metric questions into the business confidence survey occurred.
    • There was a decrease (0.2%) in the winter 2022 percentage (25.6%) of respondents reporting MRR as unfluctuating when compared to fall 2021 reporting (25.8%).
    • Only 2.2% of survey respondents reported Monthly Recurring Revenue (MRR) as decreasing in the winter of 2022. This is a marked decrease from the 9.1% reporting MRR as decreasing in the fall of 2021.

    Distribution of Revenue Across Customer Base (Chart 3)

    • The percentage of survey respondents reporting an increasing distribution of revenue across their customer base decreased (0.6%) between the fall of 2021 (44.8%) and the winter of 2022 (44.2%). However, this still is the third-highest percentage of respondents reporting the increasing distribution of revenue across their customer base since the introduction of operational metric questions into the business confidence survey.
    • There was a strong increase in the winter 2022 percentage (37.2%) of respondents reporting the distribution of revenue across their customer base as unfluctuating when compared to fall 2021 reporting (25.4%).
    • There was a decrease (1.3%) in the percentage of survey respondents reporting a decrease in revenue distribution across their customer base, with 4.7% reporting a decreasing distribution of revenue in the winter of 2022. This is the lowest percentage of respondents reporting the decreasing distribution of revenue across their customer base since the fall 2019 survey.

    Survey Charts

    (Charts Can Be Expanded for Detailed Viewing)


    Chart 1: An Aggregate Overview of Days Sales Outstanding (DSO) Trajectory

    1 - eDiscovery Business Metric Trajectory - DSO - Winter 2022

    Chart 2: An Aggregate Overview of Monthly Recurring Revenue (MRR) Trajectory

    2 - eDiscovery Business Metric Trajectory - MRR - Winter 2022

    Chart 3: An Aggregate Overview of Distribution of Revenue Across Customer Base

    3 - eDiscovery Business Metric Trajectory - Distribution of Revenue - Winter 2022

    Past Survey Results

    Additional Reading

    Source: ComplexDiscovery

     

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    ComplexDiscovery is an online publication that highlights cyber, data, and legal discovery insight and intelligence ranging from original research to aggregated news for use by cybersecurity, information governance, and eDiscovery professionals. The highly targeted publication seeks to increase the collective understanding of readers regarding cyber, data, and legal discovery information and issues and to provide an objective resource for considering trends, technologies, and services related to electronically stored information.

    ComplexDiscovery OÜ is a technology marketing firm providing strategic planning and tactical execution expertise in support of cyber, data, and legal discovery organizations. Focused primarily on supporting the ComplexDiscovery publication, the company is registered as a private limited company in the European Union country of Estonia, one of the most digitally advanced countries in the world. The company operates virtually worldwide to deliver marketing consulting and services.

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