Businesses that rely on using data to shape their strategies have a higher likelihood of outperforming their competitors.
Therefore, in a digital economy where South African companies have to compete against foreign businesses, being data-driven provides an advantage over their global competitors.
So, South African businesses, do you want to find out more about the benefits of being data-driven?
Then be sure to read on as media update's
Lara Smit discusses what potential a data-driven approach could have for South African businesses with the co-founder of Expeditus
Jason Basterfield.Why is using data so important for South African businesses?
The reality is that all
businesses need to be data-driven in order to remain competitive in the conditions of our new digital global market.
Just as South African businesses are seeking to gain exposure further afield, so too are international businesses seeking to break into our local market — thereby introducing further competition into an already
With everything moving online and the majority of people having access to smart devices and the Internet, a single Google search for products or services will create returns for companies who have invested in an online / digital presence. Customers also have more options now when it comes to making a purchase.
Therefore, businesses making effective use of data have better success in securing new customers by using a very targeted approach, coupled with relevant content and offers. Even within our local market, those businesses that are using data effectively are six times
more likely to succeed than those that aren't.What type of businesses can benefit from being data-driven?
There is no business out there that cannot benefit from being data-driven.
It is important for businesses to channel the usage of data into driving sales or optimising efficiencies. It is also important to ensure that each person in the organisation knows how to use data to effectively
fulfil their role.
Data is a matter of fact, and using facts to make decisions will result in the right
decision being made at the right
time.How can local businesses benefit from being data-driven?
Using data effectively within an organisation will ultimately impact its bottom line. If we just start with data generated internally (collected via internal systems in finance, sales, HR, supply chain and manufacturing) this will allow us to understand where the business is at all
times and in which areas we need to focus our energy on to improve.
For example, this could be applied operationally to:
- cutting costs
- managing cash flow
- improved production output
- all aspects of supply chain management, and
- staff and customer satisfaction.
From a strategic perspective, data will allow organisations to really
drive those internal KPIs when seeking to increase market share, retain and grow the customer base, retain and attract the best talent and, ultimately, maximise profit across the board.
The ultimate goal would be to use good, clean
data to evolve into the era of predictive analytics, AI and machine learning. This is what will set organisations apart from their competition locally and
This is because this type of technology assists in:
- understanding what your client needs before they do
- maximising sales by sending out orders based on the buying patterns of your clients
- planning and forecasting in all areas of the organisation
- identifying competition encroachment on your customers
- staff productivity and happiness
- understanding international trends, and
- spotting opportunities using data to move into new territories.
The bottom line is that if your organisation is not data-driven, then your data-driven competitor is preparing to move in and take over current and future business.What influence does data have on business models?
Data should be the base for any business modelling within an organisation. This is because there is simply no way
to run financial, customer, supply chain, or manufacturing modelling without data.
Business models without data rely on guesswork or 'gut instinct'. So, why risk the business on guesswork when you can use data to provide a solid
foundation for business modelling in any area?What does the ethical use of data look like?
Having access to all required data to run your organisation effectively comes with an ethical responsibility to comply with all
legislation around the use and dissemination of this data.
The data needs to be secured and protected against unauthorised outside access, as well as internal abuse and carelessness by individuals who are permitted access to personal information while being employed by your organisation.
It is the duty of the organisation to put internal processes in place to monitor, flag and protect against illicit use of data. This includes not sharing personal data or providing unsolicited marketing to an individual — unless explicit permission has been received from the owner of the data.What role does data play in creating successful strategies?
Data not only puts you in a position to define the correct strategy for your business but also gives you the ability to tangibly track the progress of these strategies.
Using and understanding data will create agility as it will allow for quicker course correction if external / internal factors are impacting the strategies that have been laid out.
Most businesses define strategies once a year with a review at the end of the year. However, this is an antiquated approach given that data and technologies around data allow for more proactive
review and revision of strategies implemented on a daily basis.
In mature data-driven organisations, data is the key to everything
including developing strategies and innovation across the entire organisation. This is because it allows you to ask the following fundamental questions:
- Where do you need to focus your attention to increase sales revenue?
- What are your competitors doing?
- What marketing strategies do you need to initiate and when should they be kicked off?
- How, and exactly where, can you reduce costs and improve efficiencies?
- How do you stay top of mind for your customers?
- What do you need to do to serve your customers better and increase customer satisfaction / retention?
- What employee satisfaction initiatives do you need?
- What impact does initiating innovation and expansion projects have on the business?
- Which territories are most viable for the organisation to expand into and who are the existing players in that market?
Additionally, you are able to do a 'What if?' scenario analysis and project yourself against the impact of global turmoil on local markets. This is because it will help you to identify what mitigating efforts would you need to put in place to ensure the business survives and comes out on the other side.How can South African businesses prepare themselves to become more data-driven?
Businesses often collect a lot
of data, but they can also have no idea where to start when it comes to mining that data or being in a position to effectively use that data to drive insights and innovation. We see it in three phases:1. Develop an executable data strategy
Organisations often fall into the trap of defining their ideal strategies, which could take many years to roll out. Instead, they should forget these theoretical 'pie-in-the-sky' strategies and rather opt for a no-frills approach to 'levelling up' based on what's achievable
The reality is that strategies will need to change
with these organisations. The first step is to understand where your organisation is in its business intelligence maturity model journey across the these five pillars:
4. infrastructure, and
Each area will have its own
level of maturity and this can inform an organisation's strategy in terms of where it should start. In essence, you need to know where you are before you can plot out a plan on where you need to be
and how you can get there.
What's more is that every organisation wants to be at level five — using AI, machine learning and predictive analytics — but in actual fact, they need to focus on getting clean
. Instead, some organisations jump to this level without a clean foundation
and the result comes back to garbage in, garbage out.
Each of the pillars are equally important and will require attention at some point during the strategy in order to uplift each to an appropriate level where they complement the other pillars.2. Execute on the data strategy
If your strategy is not correct, this point becomes very
difficult to execute.
For example, if your strategy is too broad and does not bring you up through the levels systematically, you will have no idea where to start.
Take it step by step. Achieving small goals will allow the organisation to build the confidence and learnings to make each next step easier.
It is also essential to ensure that you are focused on your strategy. So, make sure the execution of your strategy does not get held back by standard requests. 3. Make everyone across the organisation data literate for their role within the organisation
Not everyone within the organisation will achieve a data science level and nor should they. Every individual does, however, need an appropriate level of data literacy.
Large organisations spend millions to change front-end technologies every three to five years in the hope that the adoption of business intelligence and data usage will increase.
Sadly, the reality is that if a person cannot interpret a line graph in one technology, showing them a line graph in another technology will have the same result. So, if you increase their understanding of how to read a line graph, the technology becomes less important.
This should be a top-down approach as you want the senior executive team to use data to make informed factual decisions, which impact the entire organisation.
Data literacy should also be a mandatory part of induction programmes at an organisation — especially given the data-driven world that we live in.How do you think South African businesses can benefit from being data-driven? Let us know in the comments section below.
*Image courtesy of Canva