Data has radically changed business, impacting almost every industry and bringing them data-driven insights, automated processes, and clarity within decision making. In fact, it’s been proved that adopting a data-driven mindset can opens in a new windowboost productivity, increase profit, and even opens in a new window ensure cost reductions.
But, considering that over opens in a new windowhalf of all data collected by businesses ‘goes dark’, meaning it is lost or left unstructured, it’s clear that organizations aren’t yet doing enough to embrace these data-driven ways.
In this article, we’ll be exploring the central tools and mindsets that your business needs to adapt to become fully data-driven. Let’s get right into it!
What is a data warehouse?
A data warehouse is a central location where a huge range of different data sources can be stored. This hub acts as a site where all the company data can be placed, giving employees a place to go to when they’re seeking data.
Businesses that have to deal with unstructured data will often use a balance of data warehouses and data lakes. Increasingly, managing many different forms of data at the same time is becoming a problem for businesses, with opens in a new window95% of businesses citing this as a central issue for their operations. With this in mind, it’s no wonder that people around the globe are turning to storage solutions for data their business collects.
Most commonly, data warehouses use cloud services, simply due to the nature of having to compile lots of different data sources in one location. With the number of different sources that a business could use, this quickly can become costly if a company is using local storage.
Cloud data warehouses have become incredibly popular, with many businesses now turning to cloud storage as their go-to data solution.
If your business is actively searching for an effective cloud warehouse solution but doesn’t know where to begin, take a look at this comprehensive opens in a new windowSnowflake vs Databricks comparison which will highlight the most important aspects.
How can data impact your business?
Business has become vital to the day-to-day success of a business, with users from around the company relying on it and it playing a key role in effective scaling. Each year, the poor handling of data costs businesses up to opens in a new window$3.1 trillion dollars. Additionally, businesses with poor data management spend up to opens in a new window35% of their revenue on fixing these issues.
Quite simply, if you’re looking for an effective way to increase the output of your business, streamline your processes, and make the process more naturally, then getting your data in order should be your first priority.
The impact of data reaches far and wide within business, but perhaps nowhere is it more apparent than:
- Breaking business goals up – With data analytics at your fingertips, you’ll be able to begin to forge a clear strategy when it comes to getting your business to where you want it to go. If you have a large-scale goal, you’ll be able to break down what data is involved in getting there. With this known, you can then more effectively make changes in your organization to get there, putting data to work.
- Detailed analytics – Within every area of your business, data will give your employees the information they need to make better business decisions. Instead of making decisions based on their own guesses, your employees will be able to put data to use, using it to propel their decision-making forward with effective and accurate decisions. Once your business has a fully connected data enterprise, the insights and analytics that you’ll be generating will thoroughly change how your employees work.
- Customer understanding – By collecting customer data, you’re able to build up a more accurate picture of what customers you’re dealing with. As a business, the correct use of this data will allow you to begin to run personalized, data-driven marketing campaigns to directly target what your users enjoy. Due to this, you’ll be able to cut down on marketing costs, reduce your cost of acquisition, and ensure that your customers are always coming back for more.
These are only a few of the ways that data is penetrating into industries around the globe, its generation, consumption, and use quickly becoming vital to modern business.
How to create a business that more effectively engages in data
If you’re looking to create a business that directly uses data to promote better decision-making, then there are a range of approaches that you can take.
We’ve outlined four central concepts that you need to introduce on your way to becoming data-driven:
- Democratize your data
- Show employees how to use data
- Frame data as a central business language
- Update your data tech stack
Let’s break these down further.
Democratize your data
One of the central problems that businesses face when it comes to managing their own data is the inability to pass data through the poor data infrastructure that they have in place. Typically, a business that hasn’t thought about its data management will find itself creating data silos within its organization.
A data silo is where one department holds certain data, forgetting or not knowing they should pass it on to other departments. Without all the data puzzle pieces to make correct decisions, other departments may then suffer due to these data silos.
Due to this, one of the very first steps when seeking to create an organization that has data at its center is to democratize data. To go about this, you should:
- Invest in data pathways – Without effective ways of sharing data and storing new data that’s recovered, it becomes very difficult for your team to create a data democracy.
- Demonstrate the importance of data – Be sure to let every single team know the importance of contributing to your organization’s data pool. Once they know that they should be actively sharing data, they’ll be much more likely to remember to actually do it.
- Prioritize communication – Data silos often form due to a lack of communication pathways between departments. Be sure to prioritize communication as a central tool that everyone can turn towards. If all of your departments know they can reach out and communicate freely with other teams, then the flow of data will be much easier to facilitate.
By following these steps, you’ll be on the right pathway towards creating a business that can thrive alongside its own data.
Show employees how to use data
When the word data gets thrown around, simply due to how all-encompassing it is, many people may not actually know what this involves or how it relates to their jobs. One of your primary objectives when creating a business that is more reliant on data is to demonstrate how it actually impacts people’s jobs.
While many people may think that they never have to come across data in their role, this is actually far from the case. Just due to the sheer application of data, it is likely to arise in almost any business career path.
Early in the process of creating a data-driven company, you should endeavor to ask each team manager to make a presentation about how data is used in their team. Not only will this consolidate managers’ opinions of data, but it will also ensure that everyone within their department has a thorough understanding of how data arises.
Once people understand how data impacts them and can make their job significantly easier, they will then be much more open to getting on board with your data-driven approach.
Frame data as a central business language
Considering that data can help businesses make guided decisions when operating, it’s important to demonstrate that data is a useful thing for employees. One way to do this is to propose that when making decisions or submitting ideas to discussions, employees use quantitative data that they’ve found.
This is to say, instead of suggesting a change based on their personal opinion or experience, they should find the data within the business that backs them up. If they can find the data, then their point will be much stronger and will help streamline the decision-making process considerably.
When data is always a central talking point, and your business begins to move away from insubstantial evidence, you’ll be able to accelerate your progress significantly.
To directly prove my point, data-driven marketing strategies can increase revenue by around 20% while opens in a new windowreducing costs by 30%. This is directly due to the fact that data becomes central to the decision-making process, pushing aside unfounded ideas and concentrating on what is proven to work.
Update your data tech stack
Every single business that aims to make data a core part of their company needs to also make sure that their employees have access to a data tech stack. While tech stocks are a complex topic, there are a few core elements that you should have when it specifically comes to data awareness and exchange.
You should make sure that your business has access to:
- A data warehouse – This will act as a central location where all of your business data is stored. Employees will be able to access this cloud site and get all the information they need.
- Analysis software – While all data is good data, if it is unstructured, then it can’t be used for analysis and therefore isn’t particularly useful. When dealing with data, you should ensure that your employees have access to tools that can help them to analyze the data that’s before them. This will typically be the job of a data analyst that will specialize in the tools you’re looking to use.
- Communication platforms – Without communication software, users won’t be able to accurately and rapidly change information amongst themselves. Typically, this will lead to a breakdown in communication and the formation of data silos. To put a stop to this, business owners should make sure that they have rapid communication software on hand.
When combining a system of these above three, you’ll have the most effective structure in place for the collection, analysis, and sharing of data.
When it comes to data, if you’re not already on board in your business, you’re probably being left behind. Millions of organizations around the globe are turning to data solutions, with this way of doing business having become integral to a range of industries.
From using data-driven analytics to make more effective marketing campaigns to analyzing different supply chain pathways to find which would be the most cost-effective for a company, data is now absolutely everywhere.
In this article, we’ve outlined some central plans that your business can begin to conduct in order to become more aligned with data. If you engage with them all, you’ll be well on your way to becoming a data pro.