8 Vital Steps To Becoming Data-Driven Business
2 July 2021
While many businesses start by using data to inform their decision making, data can also go one step further and integrate into your daily business operations and help you run the business more smoothly. This aspect of big data is less about people making better decisions and more about using systems and algorithms that automate and improve processes.
Whether you want to improve your manufacturing process by automatically identify faults, optimise delivery routes, target the right customers, detect fraud, or something else, data can help. Here I set out an eight-step process for changing the way you run your business using big data.
1. Source the data
Sometimes companies only look at what data they’ve already got, such as sales data, customer information, stock records, etc. And that’s certainly a good starting point, but it’s important to understand that there’s lots of data out there and lots that could potentially be captured. When it comes to sourcing data, there are two basic options: external data and internal data. External data is all the information about the wide world outside your company which you can turn to your advantage. Internal data is all the information about your company’s performance, activities, wins and losses, which you can generate yourself. This includes sales records, customer databases, employee records and all the day-to-day data which can be captured in the course of your business activities.
2. Weigh up the costs and benefits
Implementing data into your operations does require some level of investment. You’ll need to invest in tools – for example, tools to collect, store and analyse data – to help you improve operational performance. Studies show that companies (especially small and medium-sized companies) put cost and personnel problems as the top reasons they haven’t implemented big data yet. The truth is, data needs to become a priority fast, or companies risk being left behind. When weighing up the costs and benefits, remember to consider the potential costs of not integrating data into your business and potentially being left behind.
3. Secure ownership of the data
When data becomes a part of your everyday operations, the business begins to rely on that data. It becomes a core part of how you do business. As such, it’s important you own the data. Make sure that, wherever possible, you own the data that is crucial to your business operations or, if you can’t own the data, at least ensure you aren’t going to lose access to it.
4. Manage the data
The thing about big data is that sometimes it can be really, well, big. As such, you need to think hard about how you’re going to store and manage your data. If you think of data as a key operational asset (and you really should!), then it’s important that you avoid storage and security problems. These can be hugely costly, both in terms of money and your company’s image. Computer hard discs are still the storage medium of choice because, at higher storage capacities, they’re often very cheap. For many smaller businesses, this may be all that’s needed. Distributed storage and cloud storage are two alternative ways for businesses to store their data without investing in expensive dedicated systems and data warehouses to put them in.
5. Secure the data
Security is a huge issue in big data. It’s also pretty specialist so it’s a good idea to get some expert help on this. Data breaches can lead to huge losses for businesses and there have been some very high profile breaches in recent years. It’s therefore essential to protect your data against breaches through encryption, training staff so they don’t give away crucial information, and security systems that detect and stop data breaches.
6. Establish infrastructure and technology
This means making sure you have the technology and systems in place to take advantage of data. Your first step is to establish what infrastructure you already have and what you need to beef up or create from scratch. When you’re looking at using data to improve operations, there are three key areas of infrastructure to consider: the first is creating processes and tools to generate internal data and/or access external data; the second is ensuring you have the facilities and systems to store and secure that data; and the third is setting up the algorithms to automatically analyse that data and create the necessary outputs. There are lots of products and services available that make this process easier.
7. Test and pilot your operations
Once everything is in place, you need to test your systems to cheque everything is working as it should before you go live. It’s no good finding out there are serious problems three months down the line and wasting valuable time, energy and money. Remember that you’re in this for the long haul, to systematically improve the way you do business, so take time to get this stage right.
8. Transform your operations
Using data to improve your operations is an ongoing gig. As such, that means viewing data as just a part of your business from now on – as important as your product, your employees, your distribution channels, your customer service, and so on. Like each of those areas, it needs careful monitoring to cheque it’s working the way you want. It’s a good idea to review progress regularly (say, every six months) to see how things are progressing. If you’re not seeing the improvements you expected, you may need to tweak your algorithms or look at collecting additional data.
Businesses are finding more and more ways to use data to improve how they do things and gain competitive advantage. As such, how you use data in five years’ time, or even one year’s time, may be different to how you start out using data now. One thing is clear however, data will become an increasingly important component of business operations.
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