The Economist Intelligence Unit recently conducted a survey about how companies use data to create competitive advantage. The report’s quantitative ﬁndings come from a survey of 602 senior executives, conducted in September 2010.
"Today, there is an abundance of data — some would say an overabundance — with a wide array of tools to analyse it. Executives are beginning to realise that, if the deluge of information is to be exploited to the full, information should be widely shared, not hoarded. Only then can ﬁrms gain the insights that will put them ahead of their rivals."
What can companies do to ride the wave ahead of their rivals?
Leading companies are keenly focused on data
The best corporate users of data dedicate a significant amount of time to working out what type of information they should monitor and who requires it. They also invest in technology and training to make sure individuals are able to leverage and capitalize on the data they have collected.
Accuracy trumps detail
Accuracy and timeliness are the most important attributes of data, over and above the level of detail offered. This is because getting a basic insight—about a new prospect, a change in the price of some raw material, or an emerging problem at a manufacturing plant—is more valuable than being able to analyze every detail about it. There are times when you will need to take a decision without 100% of the information you need...knowing this data is at least accurate, even if it's not complete, will put you at a distinct advantage.
A top-down approach may stifle competitiveness
Companies sometimes unintentionally approach data from solely a management perspective and can make the mistake of ignoring its value to others lower down the organizational hierarchy. To gain advantage, a company should find ways to “democratize” their data. This could be done by sharing data up and down within the organization, or making the data accessible across the organization in order to get a broader perspective. Of the companies surveyed, 77% of those that aim their data initiatives at all employees, regardless of level, claim they have found ways to make data extremely valuable to their business. Only 65% of companies where the data initiatives are intended primarily for managers agreed.
Information supports competition in many ways
77% of respondents said data make an important contribution to their customer support efforts, and 71% say it helps them support their sales processes. Operations, cost management and product development are all aided by data too. A less common beneﬁt — cited by around 50% of all companies — is the contribution that business insights have made to helping executives enhance brand awareness.
I read with interest a point made about the ease of use of data analysis software - "Systems that are too complicated can also be a problem. A company may intend to let employees beneﬁt equally from data and technology, but can undermine that goal if its software requires a high level of technical sophistication."
We often see this being one of the several reasons people make the switch to Bime. Being so easy to use makes it easy for anyone across an organization to exploit their data. And in addition, the absence of the need to invest heavily in training means that companies free up more resources to focus on growing the business.
Remember the 3 broad things to consider if you want to gain a competitive advantage from your data:
1. Focus on the right data (don't be afraid to discard what is not useful)
2. Make data easily useable and easily accessible by employees - democratize your data - know who needs what
3. Encourage data champions across the company, and promote their success - demonstrate the benefit of your data analysis system for competitive advantage and they are more likely to follow suit!