Do You Have a Plan for Your Business Data?
A couple of weeks ago I wrote about data as the new oil and the huge business opportunities SMB’s can tap into by taking advantage of it. But that does not eliminate the real and perceived challenges that come along with trying to harness and interpret the data. If you do not start with a plan, then data is just noise and you will never get anywhere. One of the biggest hurdles that most SMB’s must get over is not technology, people or processes. It’s business planning, strategizing for the next 1-3 years, writing it down, aligning it to the departments and people, creating an execution plan and following up and modifying as necessary. Most SMB’s do not spend the time, crucial time, to look to the future, and then plan backwards.
The Four Steps to Getting Started
To help SMB’s begin the process of identifying the data that might be important to their organization, I provided some high-level guidance with four steps to getting started. Always remember, data analytics starts with what you want to predict, which helps guide what types of data you need to collect that will hopefully provide the conclusion you are seeking. Those four subjects are as follows:
- Start with the End in Mind
- Pick a Small Project that could have a Big Impact
- The Right Tools are Critical
- Use you Current Data
Life Lessons Learned Collecting Data
A few (many) years ago, I worked with the strategy/acquisitions division of a major computer manufacturer. At the same time, I was attempting to finish my MBA and had an assignment to create a statistical model to predict future outcomes. Since I was surrounded by data analysts that built the model for one of our divisions, I used the same data points they used, and no matter how I moved the variables around, it always predicted failure. I learned numerous lessons through this process: I wanted to predict growth, collected the data points that would help to predict that outcome, ran them through multiple model variations, and found that I kept getting the same conclusion. Had the conclusion been different, so would have been the conclusion and then the data would have transcended into currency.
I share this little life lesson because it had a huge effect on my future. Fast forward a few (many) years and I started to see the more practical side of data, and how the interpretation of it can reap huge rewards, but also can also be a very long and difficult journey to get to a conclusion.
Data Collection Engagements
In the last 4-5 years, I was involved with a few client engagements where they wanted to pursue collecting data and see what predictive outcomes might exist. I want to share with you the process we went through to identify areas of potential value, so it hopefully helps you look at the potential around your organization a little bit differently.
Manufacturing Industry Tracking Data Performance of Oil Derricks
An organization manufactured a circuit board for use in the oil and gas industry. The circuit board collected performance data (flow, heat, fire, etc.) of the oil derricks it was monitoring. They sold the circuit board to their partners who were selling the oil capacity directly to the oil companies (independent and national). Think about the potential here. What if they identified other data sources such as NOAA (weather), geographic purchasing data, global oil prices, global oil production, etc., and built a predictive model that, based on the results of those other data sources, could help them make business decisions to increase/decrease capacity, create spot pricing opportunities for partners, identify inclement weather and shift capacity/purchasing to other areas of the country, etc. The ability to get access to unstructured data and combine it with structured data (Google local news for example) proved to be a big game changer.
Grocery Retailer Analyzing Customer Shopping Habits
Due to the razor thin margins, a grocery retailer was interested in learning how to better identify traffic flow, time spent in aisles, time of day certain products were purchased, and how to interact with customers as they came into the store. What if that retailer built an app and installed some form of location based technology (beacon, GPS or WiFi) to identify when, where and how long a customer spends time in a store. Match that to purchase details and the store’s planogram for item location, and they have multiple outcomes they could achieve. Such as possibly drive ads, specials, etc. to that customer to drive additional sales based on when they come in, or where they are in the store. Shelf space is premium real estate, therefore, if that retailer collected all the detailed data and presented it to their suppliers, they might be able to increase or decrease the cost of the shelf space based on the customer traffic patterns. The opportunity is endless, and a clear path to turning data into currency.
What is possible for your organization with Data Collection?
Think about these two industries and apply the similarities to yours. How would you look at your organization and industry differently? What are the possibilities for your business? You might be thinking the technology behind engagements were expensive and took an entire team to manage. However, the technology needed in both cases was not expensive, and the increased value to these organizations was +15x. The costliest piece was allowing their imagination to think “What is possible!?”
Data IS the new currency, and I am excited to see where this takes us.
President / Cheif Operating Officer