Every business produces data, even a small one! And unsurprisingly, most of the businesses gather that data too.
In the age of IoT and the advent of cloud-based business intelligence systems it is easier than ever to gather your business data, anything from performance results to your demand volatility can be found at a click of a button! And many are happy to have more data about their business. However, not all of the organisations are able to utilise this information to its full potential.
The problem is that collecting the business data without a proper way to read it, understand it and apply it can actually be costing your business money! There are a few main costs that can be attributed to this issue, and the following will discuss them:
First and foremost, collecting data that you are not taking full advantage of is a problem on its own. Gathering business data can be quite an expensive procedure if you excerpt figures that go unused.
Often tools will gather a “package” of data, but organisation will only use only a part of that data for their reports and neglect the rest. Reports claim that between 60 percent and 73* percent of all data within an enterprise goes unused for analytics.
This adds additional costs to an organisation from a tool itself, plus other resources, like man hours that it takes to tackle and extract only that specific set of data. There are associated costs to maintenance of this data too, one report points out that data workers waste 50% of their time finding and correcting errors.
Lost revenue opportunities
The challenges of misused business data spread wide across organisation, but one of the most important things is that such data can actually damage your bottom line. Gartner claims that the average financial impact of poor data on business is around $9.7 million per year. While not all of this amount is direct financial impact, but it still signifies the financial impact misused data has.
A lot of this cost can be attributed to lost revenue opportunities from misused data. A perfect example of this is strategic forecasting and demand volatility. It is easy to generate this data, and most of the businesses do, but only in their yearly reports. So, while the data is used, it is not utilised properly and therefore can lead to missed opportunities. This particular issue can be overcome by moving your business into rolling forecasts and rather spend time improving your data quality.
Low efficiency/ productivity
Another issue with unused data is that it can cause problems with interpretation of the rest of the business data. These issues are particularly visible in a marketing department, where foul data will cause the failure of marketing campaigns, bad metrics and skewed reports. These reports than might drive another campaign, which will lead to more bad metrics and so on. Additionally, your customers would see this kind of misused data use, which could then lead to them responding to it.
Overall it is very important that you take advantage of all of the tools your business has. This way you can keep the best track of your business progress and output quality. Also, it is paramount that you learn how to take full advantage of the tools your business has. And it is often in the benefit of the organisation that sells you these tools. Some companies will provide some training, while others will have consultants. For example, here at ProForecast we offer training on how to use every part of our tool, and our weekly blogs give you insights into what type of data you can get, and how to use ProForecast for your business insights.