By Bernard Marr
Do you feel like you’re in a losing battle with big data? That you need a big budget to compete with the biggest companies who gather volumes of data?
There’s no doubt that giants such as Google or Amazon have the experience, money and technology to cope with massive data sets. They also have the storage capacity, manpower, analytical know-how and software to mine all that data for insights. Google even tracks misspelled words and errors in search queries to create the world’s best spell checker.
But, most businesses don’t need to, nor should they, gather every piece of data that’s possible. Businesses should only collect the data they need to reach their business goals. In fact, the need for smaller companies to stay focused on what data to collect is a good thing.
How do you determine what data to collect?
Data should be at the heart of decision making in all businesses, regardless of company size or industry. Unfortunately, in today’s competitive business world, experience and instinct will only get you so far.
The first step in determining what data to collect is to identify your key business questions. Once you know the questions that need answered, it’s much easier to identify the data that will help you get the answers you need. It’s that data that your team should set out to collect.
There are five core areas where data gives businesses a competitive advantage. As mentioned, most companies use data to help humans improve decision making and it’s typically the first place data is leveraged in a company. Data can also help businesses understand their customers in a deeper way, deliver a new value proposition, improve business processes and it is even sometimes added as a new product offering.
Data strategy provides the blueprint for how your company will use the data
The power of data is NOT in the data itself. It’s how you use it. And it’s never a good idea to capture huge mountains of data that you really don’t need. Creating a thorough data strategy will help you figure out what data you really need to meet your goals. It’s also important to keep revisiting the strategy to stay lean and remain focused on the outcomes. An effective data strategy outlines:
- How you use the information you glean from the data
- The processes you improve because of the data
- The better decisions you make
- The business value you add
In addition to showing how you will use the data, a robust data strategy also acts like a business plan of sorts about why data is important for your organisation. It’s important to effectively communicate the key elements of the plan across the organisation. Here are elements that cannot be overlooked:
- Outline of the data strategy and its goals (what the organisation is hoping to find out or achieve with the data)
- Set out the tangible benefits to the business (how data will help you improve or transform your business)
- Be clear on the capabilities needed and any potential skills gaps in the organisation, and how you intend to fill these gaps.
- Be open and realistic about the timeframe, likely disruption to the business and costs.
It is crucial to “sell” big data to your people as a very early step on your data journey. When people understand the value of data to the organisation, they are much more likely to incorporate it into their decisions in the future.
If you feel overwhelmed by the prospect of big data for your organisation, take a deep breath. You really only need to determine a high-priority question you want to answer and then set out to gather the data you need that will get you those answers.
Bernard Marr, pictured above, is a best-selling author. His new book Data Strategy: How to profit from a world of big data, analytics and the Internet of Things is out now, published by Kogan Page, priced £19.99