With data to support sales and marketing, advertising and public relations, accounting, workflow and employee productivity, business owners would soon find huge gaps in the connection between cost of business operations and profitable results.
To learn just how data influences your business, consider the impact of ignoring accounting data. Without daily data collection of total orders, sales and related costs, business owners would easily overspend on their advertising and public relations. It is easy to see how data can influence your business.
External and internal data
There are two basic types of data all business owners know influences their business: external and internal data. Examples of external data include marketing research data on competitors, competitive products and services and pricing. Internal data is that which is collected on a consistent basis related to day-to-day business operations. Each business needs to be vigilant of external and internal data and create a framework of the impact on business.
Factors of data quality
To obtain optimal quality data, there are factors that should be considered. These include:
A trained, professional eye in today's business world studies data analytics in data collection as a means of extracting the most significant issues related to each particular type of business. It is difficult to imagine those in the restaurant industry, for example, neglecting to gather data on competitors for their market share. Data analytics plays a large role in financial, manufacturing, medical, healthcare, marketing and government. Within these industries, thousands of businesses perform data analysis on a variety of business operations.
Data analysts perform four major types of data analyses. These include, predictive, descriptive, diagnostic and prescriptive analyses. Each of these requires a specific level of inspection, data collection and study of data collection results. All of these are intended to increase a business's market growth and market share. For example, manufacturing businesses rely heavily on all four types of data analyses to produce consistent information on volume of products sold in a given fiscal quarter.
When sales show a slight decrease, descriptive analysis shows which products are sold less and which have increased in sales. This may be followed by diagnostic analysis that helps to define target markets more clearly and with the aid of predictive and prescriptive data analysis, the influence on a manufacturing business is re-staging and/or resetting the sales and marketing scope.
Big data - qualitative and quantitative
Presently, data can be found nearly everywhere thanks to the internet and social media. Businesses are influenced by the trend toward "Big Data" which links a variety of related data sets that influence business by generation more sales leads and a more expansive target market. In a March 2014 article in "Harvard Magazine" by Jonathan Shaw, the topic of Big Data and its ability to influence business indicated that human input utilizing algorithms far exceeds that of computers at deriving analytical data patterns.
Qualitative data influences business when analysts know and understand the specifics within businesses. Quantitative data analysis provides statistical data based on known business factors, omitting the details that may have stronger influence.
How to create greater data influence
The single word to keep in mind regarding data as a business influence is "evidence." Data represents evidence of time, effort, actions and results that each business recognizes as part of business operations. It is up to each business owner to define clearly business operations so that data analysis is accurate and effective. Data influence in business relies heavily on timeliness due to the constant volume of data produced each day.
Data can also influence your business in another way: correcting problems before and after they occur. Analytical data often shows that your business is losing revenue due to poor employee productivity or through loss of revenue as a result of substandard products or services from business suppliers.
To create greater data influence, design crucial business reports using excel reporting. Spreadsheets are the most expedient means of inspecting data collected and may also be linked to several other software applications like databasing and accounting.
The business system of data influenceA business operation should have a basic system in place that encourages efficiency, cost-effectiveness, timeliness and productivity. Your data collection can be of greater influence if it is part of a basic system of business operation. Data analyses done at the end of each business day can influence the next day's workflow and market growth when data reports are provided to your staff.
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About Lindsey Patterson
After graduating from UCI, Lindsey Patterson became a freelance writer and entrepreneur who specializes in business technology, customer relationship management, and lead management. She also writes about the latest social trends, specifically involving social media.Read more from Lindsey Patterson