Understanding the Power of Data in Business

Data-driven companies find significant value in the effective use of data. Alanna Smith’s article discusses Data and the influence, impact and power for businesses.

Data is a broad term for one of the fastest rising technology trends. It refers to the information that is collected from a range of sources, as well as the process of analyzing that customer, industry and market data to yield greater insights on business and behavior. The potential for businesses is greater than ever. We’ve never had access to so much data or so much technology to identify the patterns and trends contained in it.

Valuable insights for every business

Look at shopping giant Amazon or media provider Netflix. Every part of their business models — right from the overall strategy to each individual customer experience — is informed by fast, accurate, and meaningful analysis of data. But these large companies aren’t the only ones who can reap the rewards. The potential benefits of adopting a data mindset apply to small businesses, too.

For some companies, their data journey sneaks up on them. Many are simply conducting their usual activities while occasionally investing in new technology solutions, like workflow software or customer management software. Then one day, they look over their assets, people and processes — and they discover they’ve become just as much a technology organisation as they are a financial institution, an insurance company, a manufacturing company, or any other type of business. Regardless of where you are in your technology journey, it’s important to understand that a more focused and effective business strategy may lie in those volumes of data you’re holding.

Data: a growing priority

Data has been gaining increased attention as a business priority. A 2016 survey found that data has reached a point of mainstream adoption within Fortune 1000 firms. The survey found 69.6% regard data as very important or critical to their success and 62.5% confirmed they had a data project underway.

Interest in data has grown quickly. The same survey three years earlier found that only 31 percent of firms said they had a data project moving ahead.

As companies invest greater resources in their analytic capabilities, the impacts will be wide-reaching. C-suite executives will benefit from better forecasting, while business unit managers will be able to plan and strategise more effectively based on greater insights into customer and industry trends. The more an organisation embraces a data-driven culture, the more opportunities they’ll find to incorporate data into their day-to-day work.

Making data work for you

Data analytics can yield different types of insights for businesses. These may include:  

• Prescriptive insights that define customer activity and lead to a direct recommendation or tactical change
• Predictive insights that identify past customer activities and allow teams to forecast future outcomes by modeling various scenarios
• Diagnostic analyses to investigate root causes and understand customer experiences
• Disruptive analyses to mine customer experiences and pinpoint key differentiators between strategies

Reaping the benefits of data means developing a process to extract, organise and analyse the information you’ve collected on your customers, your industry and market trends. Using this data to inform your tactics and strategy requires the right combination of people, process and tools.

Here are three key insights to help you make the most of your analytics.

1. Invest in the tools

You may be familiar with basic database management, but special technology is required for the storage, search, distribution, transfer, analysis, and visualisation of data. Solutions like Hadoop are blurring the lines between traditional warehouses and more involved analytics. Indeed, Hadoop is more than just a tool for long-term analysis; users are increasingly leveraging it for day-to-day reporting.

2. Technology and business must be a partnership

Many companies have an IT department to maintain computer and communications systems. This department typically plays a supporting role to the team that makes crucial business decisions. But in a data environment, there must be a partnership between the technology and strategic sides of your business, as complex data management infrastructure cannot be maintained without ongoing IT involvement.

3. Don’t forget about the people

There’s a lot of work involved in extracting valuable insights from large amounts of data — especially given that the data is collected in different formats from different sources. Even as artificial intelligence becomes more advanced, human involvement is still required to define the parameters of your analysis, oversee the execution, and interpret and present findings and recommendations.

Starting small with data

Of course, not every small business is ready to dive headfirst into the world of data analytics. But that doesn’t mean you shouldn’t start tracking as much information as possible on your customers and transactions. For instance, implementing customer relationship management software is a great step toward becoming a data-driven business.

There’s no time like the present to start tracking more valuable business data. After all, the more you know about your current processes, the more you can leverage that knowledge for better results.

Share your thoughts with me regarding consumer and business data. You can also email me at [email protected], or call me on 1300 908 220 if you want to discuss further.

Thanks,

Wendy