Over the course of the next three blog posts, we will be talking about a topic that impacts every area of your business. That is the topic of data. In this blog post, we will be talking about what data is and why good data is important for your business. The next blog will be focused on how to acquire good data and how to determine what information is useful and what is superfluous. In the final blog of the series, we will be talking about what to do with data once you have it.
What is data and why is it important?
Data is, at it’s most basic level, information. It is the information about every step of your company’s process. We live in the information age, and we have access to more data than ever before. This may feel overwhelming at first, but when you learn to leverage all of the information flowing in and our of your company, you are set up to surpass your competitors and save significant resources—from tens of thousands, to hundreds of thousands, to potentially even millions of dollars.
Data allows you to make good decisions
Data is truly more than the sum of its parts. It is the driving force behind your company’s decision-making engine. The profitability of your company is determined by every decision you make, and it is impossible to make good decisions without good data. Imagine you were buying a new vehicle and you were trying to choose between two cars that looked the same from the outside. Car A costs $10,000 and Car B costs $12,000. If you don’t have access to information about the upgrades and features of each car, how can you know which car is truly a better value? Without all the appropriate information, it is impossible to make a good decision. Making business decisions is no different. How can you know the best thing to do for your company if you do not have access to all of the data?
Data drives change and improvements.
This is important because the world we live in is changing rapidly. We live in an instant age. The growth in e-commerce through the last 10 years has changed how consumers expect their products. Even if you aren’t dealing directly with companies like Amazon; two-day, next-day or even same-day shipping has become standard. This requires agility in your supply chain. Customers expect their products faster than ever. This requires you to make good decisions that align with the quickly changing landscape. The only way to meet this ever-increasing demand for speed is to have good data. Efficiency is key, and without good data, there is no way to ascertain your level of efficiency.
Data creates opportunities for efficiency and profit.
Every process within your company is an opportunity. Leveraging the data you have allows you to improve these processes. Imagine if you had a process that that takes place hundreds of times per week or even thousands of times per day. What if you saved $0.01, $0.10, $1 or even $10 per process? Throughout the course of a year, those small changes will have a significant impact on your company’s bottom line.
Data allows you to see trends.
More data—as long as it is the right kind of data—is better. Having a large timeframe of data to pull from allows you to see trends in your business. It shows you not only the changes you need to make, but also how changes you’ve made in one area affects other areas of your business. The unique pieces of your business and your process do not exist in isolation. Every decision you make creates trends in other areas of your business, and data allows you to see these clearly.
Data helps you identify ways to serve your customers more effectively.
Many companies’ decisions depend on their carriers’ analytics. If you’re doing this, you are already behind the curve. Shipping carriers provide good raw data, but they have a vested interest in keeping you inefficient, and they can never give you the complete picture. They don’t know your market, your customers, or your distribution like you do. Because your profitability comes down to the efficiency of each process, and decisions must be made quickly, you cannot afford to be operating with incomplete data. Without all the information, you will not know how to serve your customers well. We will cover this more in depth in the next blog post.
In Summary:
Collecting and using good data is one of the most important things you can do for your company. It drives informed decision-making, as well as allowing you to make decisions quickly, it drives profit, it creates opportunities for positive change in the processes your company does on a daily or weekly basis, it shows you business trends and it allows you to serve your customers’ needs. Without data, your company is stumbling through the dark. When you utilize all of the information available to you, your company is released to operate at its highest potential.
Our next two blogs will focus on the practical steps your company can take to get good data and the response your company should have to the data you acquire.