Realising the true value of data analysis
Any organisation that truly values its customers will record and analyse every touch point and use the knowledge that it gathers to drive customer experience and ultimately sales. After all – without data, an organisation is simply a business with an opinion.
Historical data can accurately identify sales and product trends, customer behaviours, sales performance and profit margins. It allows for better monitoring of customer engagement and customer service, better understanding of the success and profitability of products and business efficiencies, and ultimately a clearer understanding of an organisation’s strengths and weaknesses.
What is data analytics and why is it important?
Every business uses intelligence, or information of some sort, to gain a level of understanding outside of their immediate knowledge base. This information can be about the products or goods that they sell, the demographic of their customers, the effectiveness of their service providers, the efficiencies of their business methods or about the performance of their employees. Data analytics can be simple, but in the modern age, the term is most often used to describe the processing and scrutiny of large volumes of historical data. The insights provided by interpreted data help to inform decision making and to drive the objectives and general strategic direction of a business.
Deciding what you need and why you need it
For any business looking to effectively use data analytics to drive effectiveness, the first steps are to create a vision for what it wants to achieve and to establish a data-driven culture. Too many organisations spend valuable time and resources gathering data yet fail to embed a culture where they routinely utilise that data to drive operations, sales and strategies, or they fail to establish a clear purpose as to what the data is to be used to achieve. By focussing on the type of data and metrics required to define business efficiency and deliver specific business outcomes, processing large amounts of unnecessary data with little value can be avoided. The hardest place to start is where an organisation has not historically used data in their business processes, and strategies and where the technology to drive a data-driven culture is not readily available. It is important at this very early stage to send out a very clear message that no decisions will be taken without the data to clearly back up an approach.
What data do you start with?
A good place to start is with KPI (Key Performance Indicator) data. Decide the priorities for your business and ensure that your staff know what is being measured and what it is being measured for, then present the data on a regular basis. Many organisations already have the data and tools available to them to drive useful and compelling analytics, so before investing in any support, it is important to determine what you already have at your fingertips and how it can be utilised. Much of the data available will be hidden in personal knowledge and databases. Investment in technology and people to drive the pace and effectiveness of data analysis can be considered further down the line once the basics have been firmly established and their effectiveness evaluated. Businesses first need to learn how to truly value data, because unless it is valued, it is worthless.
Taking the basics to the next level
Once the basics are fully and effectively embedded, it will become clearer how business analytics can be taken to the next level and beyond. The short-term plan can be developed into longer-term strategies and goals by determining what is to be achieved from the information that has the potential to be gathered. As well as using data to provide historical information, technology can use predictive analysis to identify the likelihood of future outcomes. Organisations use data most frequently to identify more efficient ways to do business, speed up decision-making processes, find solutions to hard-to-solve problems, and to identify new products and services to meet clients’ needs. The quicker a business can make fast, agile decisions the more competitive it becomes.
The question you should ask yourself is are you a business basing your decisions on facts or simply a business with an opinion?
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