Effective use of data in business

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Everyone talks of living in the information age and information overload. True enough but a business needs information to survive and grow. The trick is to collect what is relevant to improving your business process and then using it effectively. Every company collects data. As your company grows you will have extensive data collected and stored that affect various areas of our operations.

Production related data – e.g., number of products, time required to complete a process, etc.; Supplier data on the Number of vendors, key information about them, bill of materials, problems faced in procuring certain materials etc.; responses to your website and sales campaigns; and a host of other information

How this data is processed and how it is used often defines the success of a business. By itself the raw data is a series of numbers and facts and meaning nothing at all. It has to be processed. In the first stage of processing, this has to be collated and compiled for it to make any sense. For example, if data on visitors to your website is collated by locations
or income or age it means much more than just having 5,000 visitors.

It begins to make sense. But these are still fairly useless bits of information. Many businesses stop at this stage of processing. Some still achieve success, partly because of processing thus far and partly because of extraneous conditions like finding enough visitors from a locality they can target for their marketing efforts. But to be able to make full use of it to better your business processes, the information thus produced needs to be analyzed and compared. “With what?” you may ask.

Clearly, information such as, “There were 33 customer complaints” needs to be studied along with additional factors such as:
“In which product?”
“In what time period?”
“Were they all minor complaints?”
“How many were attended to?”
“In what time frame?”
“Was the customer satisfied?”
“Did he continue to buy our products/ use our services?”
Etc.

Then, one has to compare this with past period information, or with other products in
the company, or with industry average, or with the best in class etc. A business also needs to use external data – bench mark from the industry and other companies. You also need t know what do the numbers indicate in terms of customers who did not complain, but decided to go elsewhere etc.

Such analysis and comparison should lead to knowledge of what is actually happening or where you are in terms of realistic business results and potential. This, in turn, will open up several possible actions, from among which you can choose what is best for what you want to achieve.

Once this action is taken, it has to be monitored. The results need to be studied and the
fresh data obtained needs to go back into the loop. Such complete closed loop of data in every sphere of activity of the business will lead to increased efficiencies and success.
You many find it interesting to examine the various types of information in your own business and see how data, information and knowledge are being treated.

Is it being left at the raw data stage in most cases? Or is information available? If so, is it being used to the maximum and acted upon? Is this the end of the cycle or is more data collected and added into the loop for use if future business refinements? There are companies who can help you in this.

Data, if properly used, is knowledge. And knowledge is power.