We now live in the world of data. It’s quickly becoming a valuable commodity to people who know how to use it. In the next two years, the new information generated per second for every human being will be close to 1.7 megabytes. If we look closely in the digital realm, we will realize to know how it generates more data than we even know what to do with.
This isn’t a surprise given business transactions from both B2B and B2C spectrumsthrough the internet reaching up to 450 billion per day. Businesses have been using data to understand their business ever since the invention of computing. However, most of the data previously being generated by businesses was related to the performance.
Sales, expenses, inventory, profits and so on were the type of data that businesses were interested in and could capture. But now, things have changed considerably. We now have apps where customers willingly provide their bank details to make transactions easier.
Social networks that are accumulating tons and tons of personal data which help create better buyer personas. So what is the real impact of data on business growth?
1) To understand the target customer even better
Most businesses claim to know and understand their customers. But the accuracy and the depth of the information is something that every business struggles with in this data-oriented world. When marketing was in its infancy the focus group was supposed to be an accurate indicator of whether a product would do well in the market.
But that only worked for a very specific demographic or group. Nowadays we have online feedback forms and the right systems in place to know where a customer spends the most time when browsing a website and what are his buying patterns.
All this data can now be gathered, collated and presented in a way that gives the business a much more insightful understanding of their customer. Through this greater understanding can a business grow and become more successful.
2) To utilize IoT
It may just be one of those new tech buzzwords but it’s definitely not just a fad. The Internet of Things or better known as IoT is the new way of describing any object that can be digitally connected to collect data.
The data would then be analyzed to gain a greater understanding of the user. For example, take a regular computer chair and equip it so it can record and upload data. The data can then be used to give the user a better experience.
It could know who is sitting in the chair and adjust the comfort settings according to their preference for the chair they have at home. This happens based on the data that is gathered when each person is sitting on the chair.
Many products and services have already begun to do this but as the years go by, it will only become more prevalent. In fact, 95% of new productswill have IoT and that will be a move towards interacting with humans without a centralized control.
3) To increase efficiency
Using data optimally can not only improve internal processes but also increase efficiency. It can help to optimize everything from transaction processing to marketing activities. Data can be an important productivity driver.
It sheds light on areas for improvement and helps workers be more mindful of their work habits and actions. Rather than a one-off investment in some type of exercise or seminar, data of this type can be a continuing resource.
One that constantly provides new methods and enhancement as more and better data is collected. By having a greater amount of data and the ability to analyze and present it correctly businesses can increase efficiency and growth.
4) To get a holistic view of all business functions
For any business to grow and prosper it needs to have an understanding of its internal and external processes. Many companies only focus on the product and customers but they often lose sight of internal processes such as finance, HR and marketing that are critical to business development.
By having data on these internal processes a business can understand why their employee turnover is so high or why their ads are not getting clicked. Having up to date data allows internal departments to improve their processes and work together much more efficiently.
Over to you
Business growth is based on a company running at optimum level and being able to adapt to the changing nature of the industry. Unfortunately, out of the 85% companiesthat try to be data-driven, only 37% become successful in their activities.
The real impact of data on business growthis that if used correctly it should propel it. The key is to identify the right data sets and collate them to form actionable insights for business growth.
Here’s an interesting course you could take: Big data — What every manager needs to know