Why is Data so important to companies? Here are the top 5 reasons

'Data is the new oil' when it comes to business in today’s digital economy.

As companies continue to build on the amount of technology used in operational tasks, the amount of information stored and saved for future analysis will only increase alongside the demand.

According to MicroStrategy, companies with effective use of Data Analytics saw improved productivity and efficiency (64%), faster and more efficient decision-making (56%), and better financial performance (51%).

What is Data?

Data is any piece of information that relates to how a company is run. It can be derived from your CRM, Google Analytics, or operational costs — just to name a few.

Data can be:

• Sales data
• Warehouse inventory
• Web traffic stats
• Marketplace data
• Market research stats
• HR stats
• and many more!
  
  

Why is Data so important?

1. Data helps companies make better decisions

Through Data, companies can verify, understand, and quantify information to make sound business decisions like finding new customers, creating business retention, improving customer care, predicting sales trends, and managing marketing drives.

Highly data-driven businesses are 3 times as likely to report improvements in decision-making than those who are less reliant on data (PwC).

This means a business will be more confident making key business decisions when their Data Analyst presents them with up-to-date results on very specific components of their business.

Data-driven businesses have the ability to predict trends, know when to make key decisions, and when to hold back on such activities as a recruitment drive, or spending a significant amount on a project or process. Good data beats opinion!

2. Data helps businesses understand their performance

Data can be used to understand how various teams are performing within the organisation and operations as a whole.

For example, when analysing performance, Data can reveal how advertising is performing, what the most cost-effective ventures are, the performance of the Sales team (as a whole and individually, compared year-on-year), and many other factors. Data adds clarity to what is required for better outcomes across any organisation.

3. Data enables efficient problem-solving

Data analysis helps businesses understand exactly where problems occur along the pipeline. It enables performance breakdown in a step-by-step process in order to put effective measures in place.

This saves time, resources, and funds!

4. Data improves processes

When a business knows its most efficient processes, it saves time and money; Data enables this. It allows an organisation to know with absolute accuracy why they need to make relevant improvements to further refine processes.

For example, understanding ideal consumers or customers through Data analysis helps businesses decide which advertising media to use. The performance of these media can then be measured through Data, allowing businesses to drop the poorest-performing ones and save budget.

5. Data helps businesses better understand their market, users, and competition

Data helps businesses know exactly who their customers are, their needs and buying decisions, and the strengths and weaknesses of their competition.

Market research helps SMEs decide on a realistic pricing strategy based on competitor pricing, profit margins, financing options, and their customer demographic. 

Are you ready for Data?

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