One of the by-products of most computer-driven tools that businesses have in their arsenal is data. The influx of raw information often has a purpose. They are collected to inform decisions, directions, and policy changes. But because of the sheer amount of this raw information coming in, it can be difficult to sift through them and determine their use.
Without a better understanding of their application, what was initially designed to help business decisions and essentially make operations easier can quickly turn into a flood of useless and even potentially harmful data.
When Data is a Tool
According to the Harvard Business Review, putting data to work involves the whole process of collecting it, understanding it, and applying its insights in such a way that ultimately turns a profit.
In terms of applying data insights to affect real-world aspects of operations, there are certain avenues that are universal between businesses.
To make better decisions – This is likely the most discussed use for data. What does it actually mean? For its effects to be maximized, data-driven decision-making is something that should exist on all levels of an organization. This requires businesses to gather more data – that needs to be relevant and accurate to be effective.
To innovate – If the last item involves answering existing questions and issues, innovation means finding hidden insights in data that can help take your products, services, and processes to the next level. The increasing number of your customers that now use mobile phones instead of computers, for example, may prompt you to invest in an app that offers your services instead of just using your existing website.
You can also use data to add value to your existing products. An additional, targeted feature may not seem much, but backed by data on demographics can boost your sales significantly.
To save – Having the details of your processes recorded will show you trends and areas for improvement. Whittling down steps and making processes more efficient will inevitably lead to savings in work, time, and money.
To build trust – Effecting policy changes driven by feedback data can build both customer and employee trust. Using something like an online survey system is a simple but effective way of gathering insights that can be used for improving your brand’s reputation.
In the same way, data can also inform marketing campaigns to target your market better and avoid mishaps.
When Data is a Nuisance
There are steps to evaluating the quality of your data. Data profiling comes to mind as one of the first processes raw data needs to go through to find gaps in the information and to decide whether it is usable altogether. When data is deemed unusable at the moment, it doesn’t mean it will remain so in the future. Further assessment may be required. But like all other resources, storage costs money. The more data you keep, the more storage you’ll have to purchase and maintain. In cases like this, it’s good to strike a balance and decide when data should be discarded.
When Data is a Liability
When data is left unprotected, it can become a liability. There are numerous reasons for third parties to go after your data. The simplest solution is to protect what you need and discard what you don’t. The National Conference of State Legislatures has a collection of laws governing data disposal per state.
Data is indeed one of the best tools brought by the digital age. Use it effectively but carefully.