I think you will agree when I say; nowadays, data is king. Not long ago, the mantra was “content is king,” but now data seems to have taken the crown. Organizations are actively gathering and working with big data. But are we becoming too obsessed with data?
Don’t get me wrong, I am NOT saying gathering a ton of data is a bad thing, but are you collecting data that will propel your business? Are you analyzing your data properly or are you wasting resources trying to imitate what competitors are doing?
Many people usually resort to their gut feeling when making business decisions. This is often the wrong route to take. It’s important to make business decisions based on empirical data while keeping in mind that some aspects, such as the human element, are unmeasurable.
To drive the point home, here are a couple of reasons why using data to inform your business decisions is good.
- You simply can’t argue with hard data. If you measure the right metrics, you obtain actionable information and facts that help you to make better business decisions. If you work with assumptions or guesswork, you are simply shooting yourself in the foot.
- With actionable information, you can do something about what it is telling you. You can easily capitalize if things are going good, and intervene to turn the situation around if things are bad.
- Thanks to data, you can easily measure customer sentiment. You can tell which products or services are hitting the mark and the effectiveness of your marketing campaigns.
- Every business has goals. Data allows you to keep track of key performance indicators (KPIs) and spot where you are lagging behind in meeting your milestones.
- With enough data, you can find opportunities to innovate and improve your products without wasting money and time on ineffective strategies.
Clearly, you can benefit from data just like many other businesses. Your data can tell you so much about your business, which offers you the chance to improve and offer your customers exactly what they need.
But, becoming too obsessed with data can be a bad thing for your business.
“If you can’t measure it, you can’t manage it,” is a popular saying among data evangelists. This does hold a lot of truth, but being overly obsessed with measuring data has a downside. Here are a couple of reasons why you shouldn’t become too obsessed with data.
- Over-collecting data – You have to be strategic in how you collect data and the type of data you’re collecting. You don’t need to collect every bit of information that comes your way – only the data that will help you make informed decisions. Some companies are so obsessed with collecting every bit of data they can, even what is unnecessary or irrelevant. This becomes dead data that’s a waste of time and resources.
- Privacy infringement – Data privacy is a big deal and cybercrime is a monster. As such, you should take data privacy seriously. As you collect data, you may overstep the mark and infringe on your customers’ or other sources’ privacy. This can expose your company to potential legal and reputations problems.
- You can’t measure everything – When it comes to data, there are some things you can’t measure no matter what data analytics tool you have. For example, credit card companies that engage in unsolicited telemarketing calls or direct mail drives (which many of us dislike) are able to measure conversion rates but how many people they have annoyed in the process.
- Poor data analysis renders data collection useless – Earlier, we said you must be strategic in how you’re collecting data and the type of data you’re collecting. Why? Collecting data is one thing, interpreting it is another. If your business doesn’t have the right qualified data scientists and analysts to turn that data into useful information, your efforts are in vain.
- Overlooking external factors can lead to a knee-jerk business reaction – Sometimes companies are so focused on measuring data that they overlook other factors that may be contributing to it, such as the economy, a crisis in the industry, or other external factors. Responding to data in a vacuum can lead to making bad business decisions.
- Ignoring the human element – Working with big data is a tedious task for just about any business. Most times, we usually forget about the people with whom we’re working as we try to push performance to achieve better metrics. For this reason, many businesses overlook the toll it may be taking on your human resources. So, take care of your team as you work with data to achieve better metrics.
There are many opportunities in data science. With the right strategy, you can take your business to the next level. How do you use data in your business? And, are you obsessed with data, or using it the right way? Please let us know your thoughts in the comments.