How to Weed Through Your Company’s Data and Make Sense of the Numbers
If you want data on your customers, processes, or even your competitors, it’s easy to collect and find. But once you have it, what do you do with it? Trying to make sense of the data is currently the biggest paint point.
The Rise of Data Collection
It probably won’t surprise you to learn that we’ve collected more data in the past few years than we have cumulatively throughout all of human history. IBM (News - Alert) estimates that we create roughly 2.5 quintillion bytes of data every single day. (That’s 1,000 to the power of 6!) And that number is growing.
This rise in data results from multiplying data sets and the increased connectivity of mobile devices via the Internet of Things (Iot). And as marketers began referring to these massive sets of data as “big data,” a frenzy of data collection ensued.
“Companies began collecting all sorts of data because they quite frankly didn’t know what may end up being useful — or when or how!” says data analytics expert Kyle Van den Bergh. “Many went overboard in collecting data that has since proved meaningless to improve customer experience, expand markets or offer new services. Others disappointed (and angered) their customers by poorly protecting that data and letting it into the hands of criminals via data breaches. Companies also collected data from a variety of inputs and sources: so what was captured at a point of sale system may not integrate with web or social data — or even old-school data from direct mail.”
The problem is that, up until this point, most companies have focused intently on data collection without any understanding of the responsibility of collecting data and using it wisely. This has led to issues with security and sanity. (Trying to make sense of an unlimited stream of data is mentally draining.)
The good news is that it is possible. But to escape this chronic state of confusion and overwhelm, you’ll have to come up with a plan of attack.
5 Ways to Make Sense of Your Data
The only way to propel your business forward in an age of data “oversaturation” is to develop a proactive framework ahead of time. And in this section, we’re going to focus on some of the specific ways you can get started:
The first problem most organizations have is a lack of direction and clarity. They know they need to collect data, but they’re unclear of what they’re going to do with it. So your initial step is to get clear on your goals.
A broad approach does nobody any good. It congests your IT ecosystem while providing minimal value in return. So don’t be afraid to zoom in and develop a systematic approach where you identify the one, two, or three specific reasons why you’re collecting data in the first place.
Is it to better understand your customers so that you can innovate better product features?
Are you searching for inefficiencies in your business to reduce expenses and improve the bottom line?
Is the goal to refine your company’s hiring strategy so that you onboard better talent that’s a fit for your workplace culture?
Until you determine your goals, your data collection and analysis efforts will be cloudy.
The more systematic you are in your data organization, the easier it is to pull out the correct insights. One recommended approach is to use the ABC Framework:
Theoretically, all data your company collects will fit into one of these three buckets. You’ll need to break things down even further, but this gives you a top-level way to filter information and insights.
The right data collection and analysis tools will go a long way towards helping you make sense of your data. Carefully vet any analytics tools you use and only integrate platforms that are known for providing accurate data.
Additionally, you have to learn how to use these tools. According to Marcel Digital, 90 percent of all Google Analytics instances are providing marketing teams with inaccurate data. In other words, you have to optimize your data collection on the front end in order for these platforms to spit out the right analytics.
You must avoid collecting unnecessary data. This can’t be stressed enough.
We repeat: Avoid collecting unnecessary data.
The “collect and maybe we can use it in the future” approach is no longer efficient or effective. You should only collect data that’s useful to your business. Then you can expand your method over time to account for any gaps in insights and understanding.
The role of the Chief Data Officer, or CDO, is one that has become much more prominent over the past five years. It’s estimated that 90 percent of all large global companies now have a CDO, with a 23 percent increase in CDO compensation over the past couple of years. And over the next 12 to 18 months, experts anticipate seeing a steep rise in the number of CDOs working within small and medium sized businesses.
In the simplest terms, a CDO is someone who is responsible for enterprise-wide governance of information - treating it like an asset. The role includes oversight over data analysis, data processing, data mining, and information trading. The CDO also works hand-in-hand with information security team members to help dictate security protocols and strategies.
If you’re lost on how to handle your organization’s data, it’s possible that you need to onboard a CDO to help establish clarity in this area. If nothing else, you should partner with a consultant to formulate a plan.
Deal With Data ASAP
If you’re drowning in data, you can’t sit back and hope that it works itself out. Data collection increases exponentially, and waiting any longer could sink your efforts to establish clarity and uncover the insights you need to grow your business. Now is the time to step up and take action. Every day that you delay puts you closer to the brink of a total collapse.