Making Sense of Data: How to get started
We are drowning in information, but starving for knowledge. – John Naisbett
By Jamie Graham
How to get started on your data-driven journey
We now live in a world that contains unimaginably vast amounts of data. Everywhere you look the quantity of information is soaring. For businesses, keeping up with the sheer amount of incoming data and storing it in the right place is challenge enough, let alone analysing it to ascertain key trends that can revolutionise the way they service their customers.
It’s almost ironic, as John Naisbett famously pointed out in his quote above, that as more data piles up, businesses are confronted with the paradox of “the more data there is, the less information we have.”
Having worked with hundreds of businesses of all sizes, across a range of industries in New Zealand and Australia, one thing is clear; businesses do not have a data shortage, what they do have is a problem extracting and consolidating it to make it meaningful.
The deluge of data over the last few years has meant most company’s legacy systems contain years of information on their customers and products. Yet on its own it is meaningless. The key is making sense of it and extracting insights that enable the company to be more customer-centric and stay relevant.
A recent Forbes article* estimated most companies analyse less than 20 percent of their actual data because preparing data sets for analysis is time-consuming and difficult. In my view, the percentage is probably even less than that which means massive opportunities are being missed.
Legacy systems are often used as a reason why an organisation can’t take action on their data and it ends up in the ‘too hard’ basket. Cost, time and resource are all common barriers. Around 95% of the businesses I have worked with began from a point where they had information across multiple databases which was siloed across a number of channels. What set them apart was that they understood that if they didn’t act and adapt to the new information age now, they risked getting left behind by their competitors. For some, it took only a small amount of effort to consolidate and start extracting value and business insights to start them on their customer centricity journey.
So how do you distill that mountain of data into valuable, useable knowledge?
Create a ‘single source of truth.’
The first step in developing any business data strategy is to understand the value of your data asset and create a single source of truth.
A simple data audit or discovery will enable you to understand what state your data is in, its value and whether there are any gaps or areas that can be improved on for future data capture.
The development of a central data repository and the creation of a single source of truth will provide the platform for informed strategic business decisions to be made from and will provide transparency across your organisation.
Put simply; companies can no longer afford to work in silos if they want to deliver a seamless experience to their customers. Every part of a business holds specific data sets which need to be combined and shared across the business to ensure it can provide the right experience to the customer, at the right time. You can read more here about how to get the right structure and mindset to be a data-driven organization.
Why is having a single source of truth important?
To enable a true customer-centric culture within your business you need to be able to identify each individual person and how they engage with you. A single source of truth enables the creation of a single customer view. This in turn allows you to:
Understand each customer interaction with your business
Understand the value of that customer to your business
Understand areas of opportunity
Provide opportunities for efficiency
A single source of truth also allows frontline staff to have a complete view of your customers which, when armed with intelligence from data on previous interactions with your business, can ensure returning customers feel valued and get a relevant and engaging experience.
Disparate data is not a unique challenge to any particular type of business, it is widespread. What is unique is that only a small percentage of businesses are in the process of developing a single source of truth and they will be the ones who will triumph above the rest in this digitally-driven world.
If you would like to get started on creating a single source of truth for your business, contact Claire.Bonham-Holden@datainsight.co.nz.
*The Forbes article referenced is by Finance and Technology contributor Tom Groenfeldt