How businesses can leverage big data to make big profits
In this guest article, Joseph George, Managing Director & Partner at data analytics consultancy Dufrain, outlines how businesses can utilise big data to make big profits.
With the pandemic forcing companies to accelerate their digital transformation plans, it’s never been more important for businesses to have accurate and complete data. Back when COVID-19 first hit, Google reported that 32% of businesses sped up initiatives to improve their use of data analytics and business intelligence. As the private sector enters a post-pandemic market, the advantages of a strong data strategy to harness analytics to their full potential are undeniable.
To put it bluntly, the benefits are better decision-making and increased profitability. We once lived in a world where the key business decisions were determined by the highest-paid person’s opinion. According to Forbes, an overreliance on instinct is one of the major reasons why 90% of small businesses fail. The research is clear: in the 21st century, company leaders cannot depend on their experience alone. Cognopia’s data-driven business guide in 2021 revealed that businesses that draw on data to make key decisions are 19 times more likely to turn a profit.
Making data work harder
There are plenty of reasons for this. For one, company leaders can harness Business Intelligence (BI) techniques to augment their decision-making process and gain a competitive advantage. Consider data mining, for example. Analysing a dataset for patterns or trends in customer behaviour can help a business focus attention on their most profitable business lines or adapt products to provide the service that customers actually want.
The world’s most lucrative brands, like Amazon, Apple, and Walmart, did not become market-leading juggernauts because their leaders made a few lucky guesses. Instead, these companies gathered comprehensive data on their customers to identify patterns, and record how consumer habits evolved over time, which fed into business strategy and ultimately, decision making.
These companies share something greater than respect for data as a business tool, too. The world’s leading brands understand the advantage of a strong and consolidated data governance strategy. They know that data, like any good asset, requires careful planning to turn a profit.
Transforming data into high returns
Understanding and recognising the advantages that data can bring to a company is the easy part. The challenge that many businesses face is harnessing their data to its full potential. Two of the major challenges in this regard are siloed data and data storage.
Siloed data is data that is accessible by one department but isolated from the rest of the organisation. In this scenario, data relating to a single customer must be rekeyed countless times across divisions, reducing efficiency and increasing the likelihood of errors. If data sources cannot be harnessed by all areas of a company, efficiency drops and profit falls. By investing in data governance tools to consolidate and report on data, businesses can plan for a successful financial future where the most valuable asset of all – information – can flow freely through the company.
The other challenge is unstructured data. Unstructured data is usually stored on paper, emails, or PDFs, meaning it is not easily accessed or sorted and cannot be easily used by a company to support plans. This data source isn’t only an untapped, yet vital, reserve of customer information, it can also present a serious financial liability for businesses in terms of GDPR incompliance if it is not stored in a way which adheres to regulations.
So how is this useful? Let’s break it down. Taking out a widescale advertising campaign isn’t cheap. This is where customer profiling can ensure a high return on investment. By collecting data on consumer behavior, businesses can not only produce a product which appeals to a demographic’s needs, but they can also direct their marketing campaigns towards the very people who are most likely to buy that product.
Once every employee can interpret an organisation’s data, businesses can leverage it to guide products at each stage, from the development to design and marketing. With a strong data governance strategy, businesses can streamline operational efficiencies and maximise cross and upselling opportunities.
Overall, the advantages of data-driven decisions are vast. By becoming data-driven, a business is more flexible, lucrative, and able to base decisions on tangible insights. With the pandemic widening the divide between legacy systems and the new age of the digital workplace, businesses can longer afford to ignore the effective utilisation of data. They need to see it for what it truly is: the most powerful market differentiator today.