While it’s very impressive that today’s technology allows us to gather incredible amounts of data, the reality is much of the data is currently collected before anyone answers: “What do we want to do with this data?” The result: Your organisation has a lot of data that isn’t very useful for business.
Before rushing to start collecting data, every business should begin by developing a data strategy. If you already have a ton of data, but no data strategy, it’s time to pause and develop one. Your team needs to determine what you want to achieve and then collect the data that will help you answer business questions, improve operations, and create new streams of revenue.
There are numerous ways data can influence your business success, but for the most part businesses use data in these three ways:
- Inform and improve decision-making
- Revamp and refine operations
- Create new streams of revenue
Most companies start by using data to improve decision-making, because it’s quite challenging and resource intense to simultaneously juggle all three categories at the same time.
Inform and improve decision-making with data
According to a study by Bain & Company that looked at more than 400 organisations, companies with advanced data analytics capabilities were five times as likely to make decisions faster than market peers.
Making better business decisions is the first way all organisations should leverage their data intelligence. Data can help your team make better decisions in all areas of your business from warehousing to distribution, marketing to customer service, and more. Identify and prioritise your unanswered business questions and then determine what data you can analyse to get an answer for that unsolved business problem.
Certainly, one of the most prolific ways that companies gain insights from data is to get a better understanding of their customers—data-driven insights rather than assumptions—about who they are, their preferences, behaviors, and more.
Revamp and refine operations
There’s abundant opportunity for organisations to use data to optimise operations and everyday business processes. Virtually any business process that generates data whether that’s through customer ordering systems or machines on a production line can be refined based on the insight the data provides.
A top priority for many companies is to use data to gain operational efficiencies. For example, service-based businesses with fleets of vehicles equipped with GPS devices can all be connected to give extraordinary insight via real-time monitoring. But it’s not just service delivery that can be monitored and enhanced, companies optimise their warehouse processes, inventory control, supply chains, IT resources, and even human resources recruitment and management from the data they collect.
Amazon leveraged the insights of data in a big way when it launched the personal recommendation system that helps us know what we might need even before we have given it a thought. I detail this and other innovations Amazon has implemented because of the data they collect in my ebook, “Data Strategy: How to Profit from a World of Big Data, Analytics, and the Internet of Things.”
Create new streams of revenue with the data
The more robust and compelling your data is, the more attractive it becomes as a business asset. In fact, companies are now being bought and sold based on the data they have. In 2015, IBM acquired The Weather Company because IBM wanted access to The Weather Company’s vast weather-related data resources. IBM can now sell that data to other companies who have an interest in understanding weather patterns.
Even if your company is not looking to be acquired, your data is still valuable. Is there a secondary market for the data you generate or gather? Companies such as Fitbit are now data merchants. They are beginning to capitalise on their data being valuable to other companies. Fitbit aggregates data about fitness habits and health stats to share—and sell—to strategic partners.
Regardless of where your company is in terms of data collection, be sure that you have a proper data strategy in place. Today, every business is a data business and it is imperative to understand how you will use the data you collect to improve your business decision-making, operations, and revenue streams.
In my new book, Data Strategy: How To Profit From A World of Big Data, Analytics and The Internet of Things, I cover everything you need to know when you are creating and updating your data strategy.