Making the right decisions for your organisation
Data makes the world go round. Or at least if it doesn’t, whatever does make the world go round can be captured, quantified and analysed to find out how we can make it go faster. Data applies to everything, and everything creates data. It’s a simple rule that can benefit businesses enormously.
By and large businesses love data. Whatever the size and remit of your organisation, you can use data to make every kind of decision, whether it be product development, advertising strategy or hiring personnel. In fact you’ll probably use it to find out how effective your business is as a whole; how much you’re selling and what’s losing you most money.
Those companies that are most data-driven tend to be the most competitive and productive because having good quality information at your fingertips speeds up the decision-making process and identifies losses before they cause problems.
Collecting your data
For the modern business, a good business database and increasingly a CRM (customer relationship management) system is a vital part of the organisation’s IT holding. They can provide valuable information to help you understand your customers and improve your service.
But beware! The old adage with data analysis is that if you put rubbish in, you get rubbish out, so it’s important to ensure the data you use is the most accurate and relevant available. Crucially you’ve got to pick the right metrics for analysis; that’s the right standards for evaluation of your numbers. Without those your data can become meaningless. So unless you have the right people, no matter how good your technology, you won’t be getting the best from it.
How good is your data?
There are so many places businesses accumulate data. Often they build it up without even realising, but much is sourced either through customer surveys, business intelligence software such as the CRM, or compiled from research undertaken elsewhere. But how good quality is it?
Let’s be honest, data doesn’t survive in isolation and a set of answers given on a specific day in a specific place may be very different from those given by the same person elsewhere and at a different time. External factors play their part and because of this it’s important to know as much as possible about the data you’ve collected. This extra information is called metadata.
Metadata is useful as it provides the broader picture. This is data about data, and includes such important information as where the data was harvested, why and when. If it was a field survey it might even include things such as what the weather was like and who asked the questions – all factors that can have a bearing on the feelings of a recipient. Then there’s anything else that may or may not have influenced the overall validity of the data.
With every dataset you use, you should always know the source. You should always ask how representative was the sample. Were there any obvious outliers in the data that may have swung the result? This is especially important when you’re working with averages.
What we’re looking for in the decision-making process is a clear pattern, something that gives us a clear picture of what we’re doing right, and which of our products are selling faster? These are trends.
Often these can be buried among the numbers in your database but can appear very clearly when the right presentational methods are used. Graphs can be brilliant at this, whether it’s a bar chart showing sales by product, a pie chart showing products as a proportion of total sales, or line graphs showing overall sales growth, they paint a picture that’s easy to view. If it’s spatial data you’re using then maps are the key. Distribution maps can identify geographic clusters and choropleth maps will show density by region. They can let you know a lot about whether your profits are being made where you think they are, or if your shops are in the wrong place completely.
Whilst data isn’t fallible (sometimes a gut-instinct can indeed pay off!), it’s important to incorporate the use of factual data and information into your business planning. Whether it’s a change in direction, the introduction of a new product, or the testing of a new marketing campaign, this information is precious.