Gathering data has never been quicker nor storing it ever cheaper. The tricky part is understanding what it can really tell you: identifying what’s of use, and what you can safely ignore.
We always advise our clients to think of their business needs first, and only then start digging into the data they have.
Using data to innovate your industry
Today, successful businesses turn to data to challenge preconceptions and innovate. It’s an approach that Google has taken very successfully when considering entering a new market. It hires experts to help it understand the industry’s perceived wisdoms and limiting beliefs, then searches for patterns in large sets of data to challenge and either confirm or disprove them. If it achieves the latter, it launches a product to answer that need and profits from the result.
The approach works just as well with physical products.
Take the ice cream industry, which long believed that ice cream products that included good quality chocolate were just too difficult to manufacture; some of you are probably old enough to remember the choc ice, which dominated the British ice cream market for years despite its thin, tasteless “chocolate flavoured” coating.
In the absence of sufficient data to prove that presumption wrong, there remained a limiting belief that it was just too hard to work with good quality chocolate. Enter a market innovator, Mars confectionary.
Mars knew how to work with chocolate, but didn’t have a history of selling ice cream. When it entered the ice cream market by launching the Dove bar, a delicious high quality ice cream on a stick with a thick chocolate shell, it took the market by storm and reaped enormous rewards. Mars had studied its data – consumer demands for better chocolate – and ignored the industry preconceptions in order to open up a new market.
When data can save the day
Like Mars, our most clued-up clients act on what they consider ‘commercially interesting’ opportunities. These are the ones for which data indicates the potential to make a return, at the right level, within an acceptable timeframe. Identifying them requires two things: a clear understanding of their company’s purpose, and the ability to trust the data dispassionately, logically, and without pre-conceptions.
We advise our clients to decide what they want to find or prove before digging around in their data. They should ask whether accepted limits still apply to their industry and use the data to deliver an answer. The skill is in finding repeat patterns.
This is where Red Olive can help – first by identifying the questions your organisation ought to be asking, then sourcing and shaping the data to fit: reducing the noise helps us to shorten the task and understanding the limits of particular statistical techniques help us to advise what the data’s really saying.
That delivers a cleaner result and accurately models likely outcomes in time for our clients to implement ahead of their competitors. We can also advise where aggregate rates of change, inferred by broadening the data timeframe, would indicate that avoiding a certain course of action would actually be more profitable.
Business first, data second
By identifying a business need first, rather than starting with your data and wondering how you can use it, data scientists and organisations like Red Olive can help you to more quickly apply existing methods, as they’ll already have encountered many of the opportunities you’re considering.
There’s a higher likelihood that we’ll be able to advise on the most effective algorithms to draw out the maximum value from the data for your specific business – and help you identify which parts can be ignored.
If any company’s stated need is “make some money from this data”, we always advise them to take a step backwards, consider what their core business activity is, and how the data would help them improve or build on it. Only when they’ve identified this should they start to ask themselves how the data can help.
Are you maximising the potential of your data? Call us on 01256 83 11 00 to discuss your business needs, or email [email protected]. We experts in identifying the value in gathered metrics for businesses of all sizes.