Most businesses do not recognise the value of the data they collect in their day to day operations.
If you’re not analysing all of your data, you miss opportunities for insights to drive cost and time reduction, new product development, optimised offerings and smarter decision making.
When approached for a merger or acquisition, most businesses don't recognise the value of the data they own. Did you know that Qantas earns more
from its frequent flyer program than from flights sold to customers? And that Wesfarmers sold its Coles stores but retained the flybuys program, which
it considers more valuable?
There are two ways that data can create value for your business, either by directly selling it or by internal improvements from data insights.
I do not recommend directly selling your data to external parties, as you run the risk of breaching legal and ethical codes.
A few months ago I wrote about valuing and protecting your information, discussing the challenges of fast and secure communication.
The European GDPR cyber security and privacy standards have come into effect and must be complied with if you trade in the UK or Europe. And under the Australian Notifiable Data Breaches scheme all organisations with a turnover of more than $3 million a year (and some smaller organisations that manage particularly sensitive data) must report any data breaches that are ‘likely to result in serious harm’ to the Office of the Australian Information Commissioner (OAIC).
Even if your organisation is not bound by this mandatory reporting, you have a moral obligation to take reasonable steps to protect the personal information you hold about people, and to destroy or de-identify information once it’s no longer needed. The OAIC has thorough guidelines to securing personal information.I recommend you read and consider these guidelines for your organisation.
Read more in my previous blog post here: https://www.wisertechnologyadvice.com.au/blog/value-and-protect-your-information.
Creating value from data
Information is core to the success of any business, and highly valuable information can be created if you have good quality data being combined and analysed.
You can use data for a wide range of opportunities, understanding the overall trends of your business and allowing you to manage it efficiently. Here's just a few ideas to get you started:
- Cut loose parts of the business which are running at a loss.
For example, you may be creating and selling a product that was historically in high demand but that only a few customers still want to pay for.
- Identify trends with many small issues that are creating unrecognised large and wide-spread problems.
For example, workers that are out on the road may be backtracking over their routes and crossing over with other people’s routes, which they see as a day to day frustration. Optimising travel routes for workers can save huge amounts in fuel costs and time paid to workers.
- Get a better understanding of the demographics of your customers.
This has a wide range of benefits, for example more targeted advertising to the type of people you know would be interested in buying your products and services.
- Manage your spending better by understanding what is purchased, how often and from whom.
This allows you to negotiate better deals with suppliers and tighten up budget control.
Garbage in = garbage out
There’s an old maxim in computing, garbage in equals garbage out. Before you can start to get value from your data, you need to ensure it’s of good quality, otherwise the insights you get from analysing the data will be worthless and misleading.
It’s important to prepare carefully to get value from your data:
- Improve the quality of your data.
If your systems are overly complex and difficult for people to use, the quality of the data they input will vary from person to person. Some will be diligent and check that what they’re entering is correct and consistent, others will be too time poor to care and enter just enough to meet the data input rules the system enforces.
- Understand the source of truth for each piece of data.
For example, you may have separate systems storing data for sales, projects, invoicing and support, each of which holds customer name and contact details.
You need to have clear processes that decide which system is where these details are managed, and all other systems must be updated from that source of truth.
My recommended approach for this is to workshop data flow diagrams, which help people visualise how data is captured, stored and analysed.
- Centralise data into a single pool.
Often referred to as a data warehouse, you need a central place where all your valuable data is stored in a common format before it can be analysed for insights. This takes the pressure off feeling the need to replace all your legacy systems, they can be left in place as long as they feed data into a single pool of shared data for reporting and analysis.
- Analyse the data for insights.
The final and most exciting step is to analyse data from the business to get the insights needed to manage your business more efficiently.
Are you getting value from your data?
If you're not sure whether your current systems are creating quality data and you don't have good insights from your data, don't panic, I'm here to help.
I can facilitate workshops to map out your current business processes and data flows, helping everyone visualize what's needed to improve your data.
And if new systems are needed to analyse your data, I can provide independent advice on what will be the best software for you.
To talk further about the possibilities of data for your business, get in contact with me today, I’m always happy to meet and have a chat over a coffee.
Frequent flyer points reward airlines more than customers, analysts say, Carrington Clarke, 11/07/2018, available at https://www.abc.net.au/news/2018-07-11/frequent-flyer-program-helping-airlines-more-than-customers/9977272
The hidden reasons Wesfarmers considers flybuys more valuable than Coles, James Fernyhough, 19/03/2018, available at: https://thenewdaily.com.au/money/finance-news/2018/03/19/wesfarmers-flybuys-coles/
Realising value from data, Charles Evans, Chris Probert 7/11/2016, available at:https://www.capco.com/Intelligence/Capco-Intelligence/Realising-Value-from-Data
Your data is worth more than you think, John Akred and Anjali Samani 18/1/2018, available at:https://sloanreview.mit.edu/article/your-data-is-worth-more-than-you-think/
Getting more from your data – Can your business clearly identify how it will find value in data? David Castro-Gavino 8/10/2018, available at: https://www.dunnhumby.com/resources/blog/getting-more-from-data-identifying-value/
Value and protect your information, Sonya Weiser, 9/03/2019, available at: https://www.wisertechnologyadvice.com.au/blog/value-and-protect-your-information.