Each day, around 402.74 million terabytes of data is created. Data is everywhere, and the amount of data generated grows at an ever-increasing rate each year (Statistica 2024).
As we continue to move towards a more globally connected economy affected heavily by digitalisation, the internet of things and AI, this trajectory will continue to accelerate.
So, what are organisations doing with all this data? Not much at all, according to Associate Professor Ida Asadi Someh, who is a business information systems expert at UQ.
She believes if organisations are using their data – they're not doing so systemically.
“The benefit of organisations having access to relevant, valuable data is the ability to make better quality decisions that fuel processes and strategic actions," she says.
The more organisations know about themselves and their customers, the better services they can provide.
Associate Professor Gabby Walters’s research focuses on the tourism industry. In recent years, she has studied the impact of crises like the global pandemic on the tourism and hospitality industries.
These are Ida and Gabby's top tips for using data to better understand your business and your customers, and to make better decisions that will ultimately improve business processes and outcomes.
5 tips for using data analytics for business improvement
1. Create a data strategy to focus your efforts
Understanding why you’re collecting data and what you hope to learn from it will help you devise a strategy. Having a clear strategy makes it easier to focus on the data that’s important to you and your business.
Questions to consider include:
- What is our vision for organisational data use?
- What services and products will benefit from the collection and use of this data?
- How will I source the information I need?
- Who will use the insights from the data collected? And how do we drive organisational adoption of data-driven insights?
- How do we use data in acceptable, ethical ways?
- How do we measure data’s strategic value?
For example, Gabby was curious to understand how the pandemic affected Australian travel behaviour post-pandemic.
Through her research, Gabby discovered only 51% of Australians planned to travel overseas when the international borders were opening. By analysing the data she'd collected, Gabby discovered the most risk-adverse populations were female baby boomers and seniors. Australian tourism and hospitality businesses could have leveraged these insights in their marketing by targeting female baby boomers and seniors with messages promoting the relative safety of domestic travel and highlighting the safety measures in place to give them peace of mind.
2. Collect a variety of data for a clear picture of your organisation and to better understand consumer trends
Companies are no longer able to succeed just by relying on internal, transactional data. To see the complete picture, businesses need to know the pains and joys of their customers and employees.
The best way to gain insight into business experiences is by gathering interactional and sensory data. Compared to transactional data, experience-oriented data can be found in unstructured text or audio data that captures customer perceptions, preferences and sentiments.
For example, Amazon uses collaborative filtering to recommend items to users based on what people from a similar demographic have purchased. To ascertain your demographic, Amazon collects a variety of interactional, transactional and sensory data such as your:
- clicks
- what pages you access
- browsing time
- what you purchase
- your location
- the time of day
- how you read e-books or watch TV and movies.
Amazon then uses this data to create a “360-degree view” of each individual customer. This view is then used to find other people who fit a similar demographic (such as “employed females aged between 18 and 45 with an income over $50,000 who enjoy cooking and action films”) and make recommendations based on what those similar users like.
As a business, you can collect data about:
- transactions: including RFM scores, discount levels, and promotions
- demographics: can influence customers’ baseline expectations
- engagement: can be measured in a variety of ways from usage patterns, loyalty programs and email opt-in/opt-out to social media
- choice of service purchased: the variety of choices a customer makes can provide signals for cross-buying, packaging and changing costs
- satisfaction, trust, commitment and loyalty: the channel a customer uses to interact with can provide valuable information for ongoing, engaged relationships with a variety of customers. For instance, customers acquired through digital channels suggest greater loyalty if they've self-selected.
3. Evaluate the quality of the data to make the best decisions
If you’re making business decisions based on data you haven’t collected yourself, it’s important to ask:
- Who collected it?
- How was it collected?
- When was it collected?
- Where was it collected?
- How many responses were there? (Is it representative of the overall cohort?)
- Why was it collected?
The answers to these questions will help you determine how current and accurate the information is. They'll also help you determine if it’s safe or wise to use the data to inform important business decisions.
For example, if you have an Australian business, relying on data collected about American customer trends may not be relevant so should be used with caution.
Likewise, it’s useful to understand whether the data you’re using to make decisions is representative of the overall cohort. You can do this by seeing the total number of people included in the data set compared to the total segment or population. This is more accurate than looking at percentages only, which can be misleading.
4. Understand legal requirements and commit to ethical best practice
To avoid legal trouble, organisations need to ensure the way they collect and use customer information is lawful. In practice, this can mean things like communicating to customers why and how their information is being used and providing the opportunity to unsubscribe from marketing materials.
The ethics of data, however, are more open to interpretation and therefore harder to achieve. For example, if people use Google and don’t get the specific, relevant and local results they’re looking for, they’d stop using the platform. The only way for Google to provide those results is through collecting customer data such as their location.
While the ethical analytics debate is evolving, it’s best practice for organisations to give customers the ability to self-manage the amount and types of data being collected.
5. Invest in analytics capabilities to unlock data value
To truly unlock the economic value of data, organisations need a systematic approach to collect, store and analyse data. To do this effectively, organisations need to invest in new processes, technologies and data analytics skill development.
While many organisations have a wealth of data at their fingertips, they don’t have the staff or capabilities to unlock its value. This requires investing in an analytically driven workforce, analytics platforms and scalable data infrastructure.
Healthcare is an industry where data insights could lead to life-changing impacts.
Managing data as an asset can enhance how clinicians make diagnoses and provide patient treatments by reducing variations in practice and documenting reoccurring patient issues.
“On a wider scale, analysing data from medical and hospital records could lead to major advances in medical research and can assist in identifying risk factors and understanding best practice for treating specific conditions.”
– Professor Marta Indulska, UQ Business School
But to truly capitalise on the opportunity data presents, healthcare professionals require training to understand how to best collect, store and analyse data effectively.
As the amount of data being collected, analysed and stored continues to grow rapidly, analytics functions and roles are becoming more and more important for business success. These tips can help you get started.
To take the next step towards unlocking value from organisational data, explore UQ’s Master of Business Analytics.
