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What Data Is And Its Importance For Businesses

What Data Is And Its Importance For Businesses

In today’s fast paced global business environment, the need to understand and leverage on the benefits data provides cannot be over emphasized especially in today’s world. African businesses and entrepreneurs must take a more direct and deliberate approach in gathering and analyzing data.  With the advent of technology, there are so many channels that data relevant to a business is collected and fully utilized for business growth.

According to Oxford Encyclopedic English Dictionary, data are known facts or things used as a basis for inference or reckoning. To elaborate, data can be defined as a systematic record of a quantity; a collection of facts and figures to be used for a specific purpose such as a survey or analysis; and a quantitative and qualitative fact about a situation that can be measured, counted and stored. For example, companies can leverage on the data they have on their customers (e.g. preferences and past purchases) to ensure that their offers and promotions are relevant to them.

Data can be classified into primary and secondary, depending on the source.

  • Primary data means the information has been collected for the first time for a specific purpose. Primary data is referred to as “pure” as no analysis has been done examples include survey responses, observations results and interviews.

 

  • Secondary data refers to information that has already been analyzed and is publicly available. Examples include information available on a website, reports, journals and newspapers.

Data is however not useful or a competitive advantage until it has been analyzed to reveal the insights. The pace of change in our global business environment requires companies to be able to quickly react to changing demands from customers and other factors. Data analysis puts companies in a better position to react promptly to changes and gain competitive advantage. According to the International Institute for Analytics, by 2020 businesses using data will see $430 billion in productivity benefits over competitors who are not using data[1]. A survey conducted by MIT Sloan Management Review also found that companies using data analytics increased their competitive advantage and were able to beat competition. The research also showed that more companies are utilizing data analytics to innovate and improve existing operations, new processes, products, services and entire business models.[2]

To compete globally, African businesses need to use data for competitive advantage.

 

[1] (Mar, 2018)

[2][2] (Sam Ransbotham, 2017)

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