Investing in Data Analytics to Improve Business Value

The words were uttered, though likely not for the first time, in 1978 by a pathologist named Edwin R. Fisher, and have resonated across the last four decades.

“In God we trust,” he told a U.S. House of Representatives subcommittee, while discussing the potential dangers of second-hand smoke. “Others must provide data.”

Fisher, who died in 2008, could not have realized how prescient he was in regards to data, the impact of which is now seen in nearly every aspect of American life. Whether in healthcare, banking, utilities or manufacturing, analytics have taken on increased importance.

They have even become an integral part of professional sports — much to the chagrin of some, like former Memphis Grizzlies coach David Fizdale (now with the New York Knicks).

“Take that for data!” he snapped after his team lost a 2017 NBA playoff game to the San Antonio Spurs.

It certainly seems like everyone is taking Fizdale up on that, in every discipline: They’re taking data, and they’re running with it. Big Business in particular has warmed to Big Data; according to Forbes 53 percent of all companies now make use of analytics, up from 17 percent in 2015.

Data can be critical in such areas as sales forecasting, optimizing market strategies, maximizing a return on assets, identifying growth opportunities and retaining customers and employees — all of which feed into the bottom line.

Predictive analytics can lead to savings as great as 60 percent, according to one report. And a case study of sorts by showed data’s potential impact. A company called From You Flowers was successful, having shown growth of 10 percent every year from 2002 to 2011, but it grew by 30 percent the year after introducing an analytics team, a result of increased efficiency in such areas as customer service, supplier management and product management.

The methodology generally used by businesses is as follows: They identify a problem, then decide what data might be most useful in addressing it. That data is then collected, and patterns are discerned. The challenge at that point is to figure out how best to use one’s findings — converting knowledge into action.

There are those, particularly in small business, who believe it is best to identify the desired outcome, then assemble data that will allow everyone to work toward that goal.

Whatever the strategy, it is clear that data has taken on a crucial role in business, and that that role will only continue to grow.

This was originally published on Data Driven Investor on June 28, 2018.

By | 2020-10-20T17:27:31+00:00 January 4th, 2019|Blog|Comments Off on Investing in Data Analytics to Improve Business Value

About the Author: