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Data Driven Growth or Paralysis
By Enabliser Howard
A study by the Intelligence Unit of The Economist on the strategic use of data in business has showed a clear link to growth. With the huge amount of data that can be mined for gold, the study has relevance for us all.
The report concludes that there is a strong correlation “between earnings growth and the strategic use of data.”
Here are some highlights, looking at what companies are doing, what can be done and their success.
Just as the internet caused a gigantic change in the 1990s, the data emerging from this internet-enabled world is causing an equally large change today, with more data than ever about people, processes and products - thus creating the potential to profit from it, transforming our strategy, if we so choose – and have the tools.
The study found that some companies have made strong use of their data already, better understanding sales, or identifying future markets. Marketing has been an early adopter. The research found a correlation “between earnings growth and the strategic use of data:” these organisations use their data instead of being swamped by it – extracting insights to guide planning and strategy. While over 70% of companies believed they were effective in using data, only 12% felt they were highly effective. There is plenty of room to improve. Using data strategically had benefits for these companies in areas including planning geographic expansion, customer sales, segmentation, forecasting and profitability, identifying new markets, improving efficiency and product quality, managing IT spending and identification of risks. In marketing, data helps to better understand customers, who they are, what they buy and don’t buy and has been an early area to utilise the benefits of data analysis.
In addition, areas with the best potential, still to be fully exploited included: improving productivity, optimising processes, risk management, identifying cost efficiencies, improving resource and inventory management, pricing planning and cross selling.
In summary, the big three benefits from using this super abundance of data are:
- Driving Growth,
- Control of Costs and
- Managing Risk.
This immense volume of data keeps growing. The risk is data overload: needing to work out what is important, filter the less important. Firms with no-growth were found to be more likely to run into data paralysis. Rather than improving decision making on the basis of more data, they worried about information overload impairing their decisions. But there are tools to handle this.
How do we avoid data paralysis and data overload, for our betterment rather than bafflement?
At Enabling we have powerful analysis and reporting tools that tame and manage your data. These are Business Intelligence tools like Info-Explorer, PowerOLAP, QlikView and IBM Cognos ® TM1® that work with multiple accounting/ERP solutions, able to draw data together from multiple sources. They are suitable for various levels of user from beginner to advance without needing heavy IT qualifications. Using the massive processing power of modern computers, they make sense out of seeming disorder, allowing changes to dimensions and views with a mouse stroke, without the constraints of spreadsheets or the risks of formulae, bringing analysis to a new level. This is a revolution, bringing insight and power over data to the user just as PCs brought computing to the user instead of needing mainframes.
To find out how these tools work with your accounting/ERP solution, click here.
Ref.: The Economist, 20th July 2013, p 42-3 (http://www.economist.com/)