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September 25, 2017

Why Data is Driving Economic Growth in Modern Businesses

Data science and analysis is a growing field. Operations research analysis jobs are one of the hottest growth areas in the U.S., with the top 10% of earners taking home in excess of $130k per annum. But, with the impact of Big Data so huge, it’s no surprise that many business leaders are recognizing the benefits of exploiting data across their organizations and hunting people who can leverage this opportunity.

For some companies, data analysis is the bedrock of their success. Take Amazon, for example. Without the power of data, Amazon would not have achieved the level of success it currently enjoys. We love to shop on Amazon because we can find anything we want at the click of a mouse. We also like (sometimes) the way Amazon reads our minds and suggests items based on previous purchases and browsing history.

Data Drives Innovation and Growth

Data collection is nothing new. For decades, companies have sought to research the market, find out what customers wanted, and investigated the viability of new products and services. It was the only way to remain competitive and stay ahead of the curve. Consumer and economic forces can be volatile, especially in emerging markets. In most cases, decision-makers were the only ones privy to strategic data, so employees were left in the dark if they needed to make management decisions. The rise of large-scale data analysis has fuelled a more holistic approach to planning and execution.

Data and Technology

Data is inextricably linked to technology. It is impossible to analyze huge amounts of data manually, but computer algorithms make easy work of sifting through tons of data to isolate trends and patterns. Now, lower level managers can access insights gleaned from specialist software. They can leverage data patterns and trends when making key business decisions.  For example, you could map addresses from excel and visualize your geographical data.  Data offers greater insights and allows companies to innovate. Access to data improves decision making and increases business insights.

Predicting Future Trends

Companies don’t need to guess what their customers want or need. They can analyze data from sales and use this to predict future trends and preferred buying channels. Data fuels growth and innovation, particularly in the world of e-commerce.

Lean Business 

Data analysis doesn’t only boost sales. Companies can use data to track employee satisfaction levels and performance. As an HR director knows, employees are the biggest asset a business has, so it pays to monitor how happy the workforce is. Data can be used to improve the efficiency in just about every department in a business. Streamlining operations and eliminating inefficiencies is crucial in today’s competitive marketplace.

Traditionally, businesses looked back when making decisions. Financial performance and previous sales were examined before managers made decisions on future financial or sales strategies. Now, thanks to the wealth of available data now at our disposal, organizations can increase revenue and cut costs.

Not all businesses are ready to capitalize on the opportunities afforded by Big Data, but for those that are, the future is bright.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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