No matter the industry, every business is plagued by uncertainty. Things change fast, and people will always be able to surprise you. Uncertainty can lead to poor decision-making, and the costs can become insurmountable over time. Worst of all, there is no cure for uncertainty. No matter what you do, some of your decisions will have to come from the gut.
That might have been true in the past, but today, data and analytics can remove significant chunks of uncertainty from virtually every aspect of running a business. When you know how to collect data and extract value from it, you can power your business with tools that don’t misread circumstances or hesitate.
The Law of Large Averages
In data science, this concept is often called the law of large numbers. Here’s the idea. The smallest particles in the universe, like an electron, are inherently unpredictable. It’s not that scientists have yet to figure out how to predict them. They fundamentally can’t be predicted.
Despite that, when you put enough of them together, you get something massive like a planet. Even though the body is made of these unpredictable pieces, the sum of them is predictable enough that we can land rovers on Mars.
In business, you face similar challenges. The single consumer is an unpredictable element, but if you get enough data, you can get a reliable picture of what the markets are doing. The law of large averages can be applied to every aspect of your business.
Companies are run by their strategies. There’s a strategy for marketing, advertising, production, vendor contracting, and everything else necessary to make the business succeed. Each one of those strategies is tied to a pipeline of data that can be analyzed to refine them.
Steering into the idea of large averages, every strategy runs on principles. In marketing, you look at leads and conversion rates to see what marketing strategies are getting the best conversions. In vendor contracting, you can compare the return on investment (ROI) for each contract. Every strategy generates data, and maximizing your data informs your strategies to remove risk and uncertainty from the process.
Streamlining Information Processing
Data is only as useful as the decisions made using it. One of the most important features of advanced analytics comes down to presentation. With properly populated charts and graphs, you can quickly and competently understand the bottom-line conclusions drawn from your data.
If you’re going through endless spreadsheets to watch your company’s performance, it’s easy to get lost or make mistakes. Even if you have pretty charts and graphs, you need to trust that they are built on sound principles that lead to good conclusions.
Strong data presentation can make business leadership more efficient. It also makes real-time reporting more useful. Ultimately, uncertainty in decisions will plummet with good data presentation.
Every business has the same bottom line. Revenue has to be greater than overhead. Your data analytics help on both ends of improving ROI. You can find money sinks and inefficient spending in your systems. This improves spending efficiency to generate better profit margins. Those large margins lower uncertainty, even when markets turn unfavorable.
Likewise, tracking revenue streams can help you identify trends that help you pour resources into the most beneficial places. This can apply to seasonal sales trends, better identification of core demographics, and spotting competitive threats early. In each case, you are using data to lower uncertainty in your strategies and create better returns.
If you want to truly understand the means of using data to remove uncertainty from your business, Helios can help. Spend some time with us, and we’ll show you how data can drive your business.