Data — The New Oil and its importance
As the picture clearly depicts, we all hear more about ‘Data’ everywhere in our life, starting from mobile data to the ‘Data’ that we are generating through many applications and various other forms. So, it has become a more generalized and overused term in the 21st century.
OK! Which ‘Data’ are we talking about here? If you are a data or machine learning enthusiast or want to understand the data from the basics, this blog is for you.
From the above statement, you would understand which data we are going to talk about here. Let’s see about data in the context of analytics.
Simple Words: Data is a collection of facts, such as numbers, words, measurements, observations, or just descriptions of things.
There are many definitions of the Data put out there. One of my most favorite definitions of Data is as Dictionary defines it:
Facts and statistics collected together for reference or analysis.“Without data, you’re just another person with an opinion.” — W. Edwards Deming.
Why do we call “DATA is the new OIL”?
Data has superseded oil as the fuel for creating the business value.If Oil was the resource that powered the great industrial gains made in the 20th century. The rise of the automobile, airplane, and assembly line has made data the major resource (NEW OIL) in the 21st century. This raw resource — data is fueling the growth of the biggest companies on the planet and born-digital start-ups.
Oil is out, Data is in.
Data - The New Oil fed to analytics engines, is vital to an organization’s success in delivering better customer experiences, accelerating product and service innovation, and streamlining compliance.
Importance of DATA — NEW OIL:
Today, almost all companies and even start-ups have started investing their time to collect more data, which helps them understand more about the business and customers. So, how can the organizations leverage the value of these data to the full? Here I am penning down some of the key reasons why data is important for your business.
1. Data helps to make better and informed decisions:
Data = Knowledge. If your business has a website, a social media presence, or involves making payments, you generate a lot of data. All that data is filled with intricate and valuable insights about your company’s potential and how to improve your business.
Good data provides indisputable evidence, while anecdotal evidence, assumptions, or abstract observation might lead to wasted resources due to the actions taken based on an incorrect conclusion.
Businesses can also harness data to make decisions about:
- Finding new customers
- Increasing customer retention rate
- Improving customer service
- Forecasting sales trends
- Improving marketing strategies
- Tracking social media interaction
In sum, data helps leaders make smarter decisions about where to take their companies.
2. Data helps to solve problems and improve performance:
Data allows organizations to determine the cause of problems more effectively and also to visualize relationships between what is happening in different locations, departments, and systems.
After experiencing a slow sales month, how do you pinpoint what went wrong? Tracking and reviewing data from business processes helps you uncover performance breakdowns so you can better understand each part of the process and know which steps need to be fixed and which are performing well. Looking at these data points side-by-side allows us to develop more accurate theories and place more effective solutions.
3. Data helps to understand consumers
- Without data, how do you know who your customers are?
- Without data, how do you know if consumers like your products or if your marketing efforts are effective?
- Without data, how do you know how much money you are making or spending?
Data is key to understanding your customers and markets.
END NOTE: Good data allows organizations to establish baselines, benchmarks, and goals to keep moving forward. Because data allows you to measure, you will be able to establish baselines, find benchmarks and set and improve performance goals by collecting and analyzing the data periodically.
