Data is everywhere you look. Every action generates large quantities of data. It's important to make the distinction between data and information. Data is the unprocessed, raw facts and figures, and information is the organized data displayed in a systematic way. Collecting and organizing data into information helps companies capitalize on opportunities.
Data collection is easily obtainable in modern business, and many tools and software the average small business user has at their fingertips are geared towards collecting and analyzing.
As a web developer, much of what I do involves data collection, analyzing and organizing. when I create a website I tend to think about the user flow, and that can be all visualized using data points. Websites are all built on data, organized in a way to present a cohesive display to the world. in creating use cases or testing existing websites we read and organize the data from the tests. free tools like google analytics, and webmaster tools are data analysis services that can tell us about visitor behavior and provide insights into how to direct our website efforts
Websites is just one area that data is used in business. Many other areas of the business can be augmented with data analysis like accounting, purchasing, sales, manufacturing, supply chain management, logistics. Companies like UPS invest millions of dollars into improving their street routing and turns they make to reduce fuel consumption, and costs. Companies can turn each stage of the manufacturing process into a data collection point. Microsoft and IBM have pushed for years to increase the computerization of these processes to capture data. In the last decade predictive analytics and machine learning have emerged as a career field to optimize business processes.
Data mining has become a huge business. companies invest billions of dollars into creating computer algorithms to mine data from social media, order tables, search queries, email communications, and more in order to gain insights. The goals of these complex programs are to find patterns in mountains of data. this can generate interesting conclusions. many times data mining finds up on places like amazon or netflix that suggest products or shows that you might be interested in. on the warehouse side, amazon has many products grouped by items most likely to be purchased together, they are not organized in a way that seems to make logical sense sometimes, but actually makes sense based on buying patterns. this way amazon can shave precious minutes each time an order is made, and in a low margin business minutes added up over time, by hundreds or thousands of workers or machines makes a huge difference.
In the small business many organization don't have huge funds or time to develop their own customized data collection tools, and analytical software. many entrepreneurs can't afford experts to analyze the data either, so it becomes essential for small business owners to be aware of many tools they have at their disposal, and how to effectively use them.
Excel is a great example of a software that many business have, that is not used to it's full potential. excel has far more power than a simple spreadsheet application. excel has a great set of business intelligence tools that can help you analyze, and manipulate data. Pivot charts, when used properly, can be used to visualize and manipulate data to create insights. The formulas and macro tools can be used to filter and sort through large volumes of information.
Accounting software today generally have good analytical tools built into them. they have the ability to see accounts that are past due, and see past payment behaviors. they also have the ability to track trends and financial positions overtime. by keeping an eye on the financial flow a business owner can better adapt quickly to new information, and make smart decisions in how and when to allocate funds.
CRM Systems have been around for a long time, but they have over time evolved in much more complex systems that few people use to there full advantage. Tracking important sales metrics and touch points of customers have never been easier. seeing that information presented in an easy to understand way is usually baked right into the software. in addition it's generally pretty easy to export information from crm systems to be manipulated in excel to generate reports. by keeping a close eye on information from a sales standpoint we can tracking the benchmarks that are important and figure out what causes leads to convert to customers. we can better forecast our sales, and train our sales staff better.
Lumped together ERP systems are systems of interconnected software that have been designed to capture data from every area of a company. from sales, to manufacturing to purchasing, to accounting. everything is connected and can talk to each other. increasingly it has become easier to interconnect these systems. surprisingly sometimes data that is collected in one department can lead to insights to another department.
Adoption and use of data collection is critical to the success of using information effectively. maintaining consistent pattern of data collection and analysis can be hard to achieve at times. I remember working at a medium sized company with an extremely powerful erp system tied into all aspects of the business, many areas of the company were slow to adopt the software, and understand, or use to software to its full potential. Because the software had a steep learning learning curve, many non power users were reluctant to dive into it. However once in the software was used more consistently, patterns started emerging in customer data that lead to more effective marketing campaigns.