The ability to leverage data to create a significant competitive advantage continues to separate the leaders from the laggards in virtually every industry.
Until recently, the flood of data produced by most companies was largely ignored and unused. Within the last several years, tools have been created that allow companies to harness the data to create significant value, growth and profits. Even more important, these “data tools” are getting easy enough to use that non-technical business people can now ask the “what if” questions.
We’ve all heard a lot about big data over the last few years. While big data is a big deal, let’s not underestimate the value of ANY data – big or small. There are some steps you can take as a company to capture the value of the data you produce. Internal data comes from two basic sources – owned and earned.
- Owned Data – A company’s owned data can come from a variety of different places: Accounting systems, CRMs, ERPs, Point of Sale applications and e-Commerce solutions, to name a few. Individually, this data can be very valuable. Combined, it can provide insights never before available.
- Earned Data – This data is now available from many social media channels,including Twitter, Facebook and LinkedIn.
In addition to internal data, many companies are learning how to combine their data with “external data” to unlock insights never before available. External can include the following:
- Open APIs – API stands for Application Program Interface. Over the last several years, many companies and governments have opened up their databases for public consumption. This means you now have the ability to pull information from social media, large websites, and the government and combine it with your own data for even more visibility.
- Commercial Data – More and more, companies are beginning to understand the value of the data they create. In many cases, they are starting to sell the data.
A great example of leveraging internal and external data is Wal-Mart. Known as a pioneer in business intelligence, Wal-Mart combined its own point-of-sale data with publicly available weather information and found that when a hurricane was expected, the sales of Strawberry Pop Tarts increased seven fold. As a result, Wal-Mart now knows to beef up the Pop Tart inventory when a hurricane is predicted.
While this is just one example, opportunities abound to grow sales and profits using data-driven decisions (DDD). The first step is to understand what data you have. This may not always be easy, but it is worth the effort. In many cases, there are cultural issues with departments not wanting to share “their” data. In other cases, the data may be incomplete or “messy”. From a management perspective, it is critical to get a comprehensive view of all of your organization’s data. This includes obvious data sources like CRMs and transactional data, but also from disparate spreadsheets and sometimes, even information on paper. Again, we encourage a companywide assessment to truly understand what data is available, regardless of its origin.
There are tools and people (Data Scientists) who are experts at combining all forms of data together. Next week, we will be talking about ways your organization can use this data to grow shareholder value. Again, it is first critical to understand what data you currently have and what data you might be able to start collecting to create additional value.
If you are interested in leveraging data to help grow your organization, but don’t know where to start – let us know. Our OneAccord Digital Team is having great results helping companies large and small create significant value using data driven decisions (DDD).
By Tom Poole, OneAccord Principal