The latest general election showed how damaging an over-reliance on data can be. As the results came flooding in it became clear that the opinion polls that everyone had placed their trust in had called the opinion wrong.
The polls didn't just cause shocked faces, they also influenced the way parties campaigned, and could therefore have had a seriously detrimental impact. The election should serve as a warning to anybody in doubt that we shouldn't be slaves to the numbers, because the numbers aren't always right.
Nonetheless, revolutions in cloud technology and digital data collection present big opportunities to those businesses willing to reach out and grasp them. A number of trends have made data more accessible to small businesses in recent years. The cloud means you don't need to invest in physical data centres, while a movement towards 'open data' means that figures from, for example, Companies House, the Met Office, HMRC are available to download in big, crunchy datasets.
The concept of 'big data' might be daunting to a company that's small and/or not very digitally savvy, but it doesn't need to be too taxing. 'It’s not really that complicated, it’s just a bit of information and using it to make decisions,' says Mark Roy, founder of consumer data company REaD Group.
There's no need to go out and hire half a dozen data scientists, buy thousands of pounds worth of software and download reams and reams of data you couldn't make sense of in a million years. Instead think about an area of your business that you want to improve, what data could be used to accomplish that, and how you can acquire and process that data.
'I think people can get hung up on the really advanced stuff like predictive analytics, but the reality is there’s so much low-hanging fruit around for being able to measure your business,' says Brad Peters, chief product officer of data analytics firm Birst.
'Identify and focus on your highest priority business questions and issues,' adds Alasdair MacDonald, VP analytics of consulting firm Genpact. 'That doesn’t only apply to the stuff keeping CEO or CFO at night. Focus it on a pointed issue, something that will help you move forward.'
For instance say you want to improve customer retention rates. Traditionally you might simply plug away at delivering what you think a customer wants, or even asking them directly in surveys what would make them return.
But if you delve deeper into the data you have on them, you can discover a lot more – for instance by considering which demographics keep coming back, which marketing 'channel' attracts the most loyal customers or which reselling techniques are most effective.
'The point of data is to be able to see what you can’t otherwise see,' says Peters. 'Organisations have a built in inertia and will continue to do what they would otherwise do unless they have some sort of extra visibility. What data and analytics provide you is the ability to see that so you can stop it, and also to see the good so you can reinforce it.'
There's no point in putting time, effort and cash into data if you don't use it to improve the way your business works. 'Once you’re starting to detect trends and opportunities you can act on them quickly, you can deploy a new widget, a new app or a new visualisation more quickly,' says MacDonald.
Build on your success
If your initial foray into using data heralded useful results then don't let it lapse. 'It’s not a one and done sort of process,' says Peters. 'For companies that become data-driven, it’s a muscle, it’s a capability and it’s something that once you start building momentum it gets better. It’s all about picking a high value but relatively small initial thing to accomplish, knocking it off, showing momentum early on and then building on that.'
As the election showed, data isn't an exact science and it won't be the answer to all of your woes, but taking a deeper look at the numbers can produce some real tangible benefits for a business.