Making sense of the numbers
We are doing business in the age of information. With consumer demands and business capabilities evolving rapidly, staying ahead of the pace of change requires business intelligence. And as we discussed in our recent Business Forum series, one of the elements of a high performance organisation is an external focus.
So how do you know what’s really happening in the market with your clients and competitors, and where the potential opportunities may be?
This is where information management becomes important. However, given knowledge is only valuable when it can be applied, we need more than data.
Raf Cinaglia, Chief Information Management Officer of Macquarie’s Banking and Financial Services Group explains how you can quickly access meaningful insights that will make a tangible difference to your business.
According to Cinaglia, in the age of big data “if you’re not in the information game, you’re not in the game at all.” However, he notes that this overused term means many different things to different people.
“In its truest sense, it’s the application of extremely large data sets to solve problems. However, the reality is most businesses don’t have such vast data – the important part is the way we derive insights from our data interactions.”
Businesses of any size can use those insights to understand their operations, products, market and customers better, and make smarter decisions to improve productivity, profitability, competitiveness or security.
But where do you begin?
Start with the why
“You don’t start with the data,” emphasises Cinaglia. “You start with the question you are trying to answer. If you start by saying ‘let’s investigate and build a model’, you might get an answer, but you won’t be sure what to do with it.
Instead, look at the value drivers that enable your business. Cinaglia suggests using a rapid ‘test and fail’ technique.
Tools to check out
Big data platforms: Cloudera, AWS, Pivotal, BigInsights
Analytics and visualisation: Tableau, Qlik, Splunk, Alteryx
“Start with a hypothesis, test it and get a quick answer. If it looks worthwhile, invest some more time into refining that answer down to costs, market share and financial outcomes. If not, fail fast and move onto your next hypothesis.”
Once you have a viable answer, you can operationalise the outcome by aligning it with your business strategy.
Let’s say a real estate firm decides to take on its competitors in the adjacent suburbs.
“Start with questioning what you want to achieve – is it a cross-sell opportunity, to increase revenue or a completely new solution to market?” says Cinaglia. “Then assess the geospatial data in the target area (data that describes a suburb, street or even individual homes), combine it with your own client data, and find the overlap. You can use modelling techniques to understand the ideal segment for your firm – and target accordingly.”
It’s possible to purchase geospatial data, or access public domain information (such as Census data) to get what you need – consider looking at household income, home values, or age and gender breakdowns.
A world without data limits
Cloud storage has transformed the way businesses can access, manage and analyse data.
“Just 10 years ago, maintaining customer data used to be a real issue – the cost of storage, processing power and memory made it complicated for smaller businesses,” Cinaglia comments.
Cloud storage and processing has changed that, and while there are no technical boundaries to the amount of data you can collect, you do need to meet privacy requirements and specific industry regulations.
“Collect as much data as is relevant – and bear in mind that what may not seem relevant today could be tomorrow,” he advises, acknowledging the problem for small businesses is not where to get that data but how to manage the volume.
Relevant data could include information about your clients, financials, products, transactions and risk. All of these combine to give you a range of scenarios, which you can then model to extract insights, using any of the many cloud-based data platforms and tools available.
“There are plenty of open source platforms and analytics tools to choose from, but think about how much time and knowledge you can bring to manage them,” says Cinaglia. “You need to ask the right questions about data security and service level agreements – if you build a data platform into your daily routine and it suddenly goes offline for hours or days, what would happen to your business?”
Using analytics to move your business
Essentially, business strategy will drive your analytics – not the other way around. In turn, data analysis will be the enabler – it gives you confidence in the direction you set for your business. It allows you to find the opportunities others may not see, the solutions that will improve the way you run your business, the way customers experience your business, and the revenue you need to keep growing.
“The analysis tools of today, and the data you are able to capture, will allow you to ask much more sophisticated questions of your business – and get the sophisticated outcomes you need to take your business further,” says Cinaglia.