Today, more and more industries are opening their doors to data as an asset and are rapidly discovering its power. Good data allows upper management to make better decisions for their companies.
It is safe to say that the reliability and strength of data are crucial to business operations. That is regardless of whether it is data collected through internal reporting, market research, straight from the customers, or through any other means.
The use of good data can be essential to a successful business. This article will cover how data quality can affect an organization’s efficiency and, eventually, its bottom line.
What is data as an asset?
In recent years, the remarkable growth of advanced data technologies and the growth of connected devices, plus the availability of economical data storage, transmission, and processing capacities, has allowed businesses to achieve competitive intelligence on demand.
Despite realizing the potential of data, many organizations face challenges due to data storage and inadequacy of understanding among shareholders. Data assets can generate future income for companies. They can differ according to business models since what is valuable to one organization may be useless to the other.
Factual data is the fuel that drives organizations toward accomplishing their mission. Increasingly, companies agree that it is time to look at data as a vital strategic asset and treat it as such.
Much of the managing and leveraging of data falls in the hands of the chief data officer. A recent survey showed that 41% of business executives think that CDOs and their ability to utilize data properly should be a company priority. Unfortunately, many companies do not invest in the necessary resources to take advantage of data’s inherent value.
Benefits of data to businesses
- Carry out decisions with confidence
The biggest impact that data quality has on organizations is that it helps decision-makers form sound, informed decisions. Data is vital to fostering confidence in organizational strategies, as long as it is reliably sourced at a statistically substantial sample size and sanitized by expert analytical professionals.
In turn, it lowers the risk businesses make when they opt for a particular strategy. It also lets them respond with better agility to the marketplace.
On the other hand, unreliably sourced data can harm businesses. That is because it can adversely affect the decisions made by management. The quality of data that companies use has always been a concern of most CEOs.
Business analysts and CDOs who can bring clarity to data effectively and tell their story compellingly will be able to help their companies gain a strategic advantage over competitors who do not use data effectively.
- Create value from data insights
Decision-making based on data aims to generate value and gain a competitive advantage for the business. If they handle quality data well, the organization can have a positive and significant bottom line.
Mckinsey & Company provides a breakdown of three separate levels at which quality data insights can give value to a company.
- Customer-facing uses of strong data that can affect marketing and pricing decisions
- Internal process improvements like fraud prevention and supply chain management
- Development of new business models
- Quality data enhances product and service development
Developing a new product or service and then bringing it to market can be overwhelming. For most companies – especially those that are still in the startup stage or recently passed it – launching a new product effectively can either make or break the business. This can affect everything from market valuation to a business’s ability to attract and keep investors for future growth.
Companies can streamline this process if their products generate strong user data that can provide information to future innovation and development. The various smart objects that you can find on the Internet of Things collect very nuanced information about the behaviors of consumers. With an excellent data strategy in place, companies can set up future launches for success.
- Data quality is vital to mergers and acquisitions
Mergers and acquisitions are an extremely complicated process. They depend on the exact valuation of both companies involved. Today, these complicated processes usually include the use of data as an asset.
The quality of the data assets acquired by these businesses can in turn show profound impacts on their eventual valuation.
For instance, the acquisition of a social networking site with huge amounts of user data will rely on high-quality data. Users sometimes provide incorrect information, and inaccurate data will diminish its value. It could lead to a jeopardized agreement.
- Data quality can ensure compliance
High-quality data does not just mean the kind of data that companies collect. It also refers to the responsible handling of information that is collected in good faith. Companies that establish strong data security will be at an advantage over their competitors in an increasingly complicated regulatory atmosphere.
Data strategy is all about the people
A data strategy must also consider the human side. That includes the owners, management, stakeholders, analysts, and other users. Companies that allow staff to think about data as a strategic asset can get more value from their systems.
The coming years will provide many opportunities and challenges for data management. Business analysts can position themselves to guide companies through the process of data management and extracting as much value as possible from it. Companies must have a nuanced understanding of their current data, resources, and opportunities for improvement.
When businesses fail to use data properly it can result in a poor customer experience, interrupted processes, and squandered opportunities could result. Simply put, organizations need to treat data as they would any other asset if they want to succeed.