In an increasingly competitive world, data has become an essential resource for businesses of all sizes. Understanding the importance of data and how to use it to your advantage is crucial for managers of small and medium-sized businesses.
What are a company’s most important assets?
– Its employees?
– Its know-how and intellectual property?
– Its relationship with its customers?
Today, we collect a great deal of data on these ‘assets’. First, we need to make sure we protect it properly:
– How can a company retain its employees if it does not properly protect their personal data and support them in their careers?
– How can it survive if data relating to its research and development, processes and procedures is available to competitors?
– How can it maintain the trust of its customers if it does not have access to their order history or if it is responsible for a data leak?
Once they are properly secured, we could be able to generate value from them, enabling us to:
- differentiate ourselves from the competition;
- increase productivity, efficiency and quality;
- improve customer and employee loyalty.
This is where the use of modern data analysis techniques can provide vital insights and enable us to make informed decisions.
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The marketing department
A marketing department can define a customer’s buying behaviour…
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The sales manager
A sales manager can analyse their sales figures and draw important information from them about the strategies that work…
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The human resources department
A human resources department can analyse its recruitment and retention data and adapt its remuneration and training policy…
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The industrial production department
An industrial production department can analyse the productivity or quality of its production based on a machine or its raw material suppliers…
But for all this data to be collected analysed and transformed into quality ‘essence’ for the company, precise objectives need to be defined!
Many projects using data analysis or artificial intelligence have failed for lack of clearly defined objectives.
Imagine you’re the head of a marketing department in a company that makes umbrellas. You want to find out how your customers usually behave, and you decide to analyse:
- their interest in a promotion that you pass on to them;
- their attitude to the weather (compulsive buying if the weather forecast calls for rain the next day, thoughtful and price-conscious buying if the forecast calls for fine weather, etc.);
- their reaction to the new model’s catalogue being put online.
If you’re not specific enough about your expectations, you run the risk of not generating useful new information and not being able to adapt your strategy to your different types of customers (The analysis is too vague).
If you are too ambitious, you run the risk of obtaining a new typical profile for each customer. But it’s impossible to define a strategy for each customer (The analysis is too detailed).
In short, yes, data is the new essence of business:
- without them, we cannot move forward (and survive);
- without good quality and appropriate analysis, there can be no good governance.
So, what can you do?
1) Think about who you entrust with your data and how you protect it.
2) Define how you can use it to your advantage to improve the operation and attractiveness of your company and its offerings.
3) And above all, don’t underestimate the value that data has for your organisations today.
