Data Analytics: The Guiding Light of Digital Transformation
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Imagine you're out on the ocean in a boat. Thick fog rolls in over the waves, making it impossible to see the shore. Luckily, you can spot the beam of a lighthouse letting you know to avoid the sharp rocks ahead. When you point this light out to the ship's captain, he brushes you away and say's he'd rather trust his gut.
This sounds ridiculous, but Forrester found that many firms make more than 50% of their decisions based on opinion and gut feelings. Just as a lighthouse stands tall and emits a powerful beam of light to guide seafarers away from danger, so too can big data analytics provide the clarity and direction needed to drive digital transformation.
Big data analytics helps organizations make smarter decisions, uncover hidden opportunities, and take informed risks. Without it, your digital transformation strategy might end up crashing against the shore.
Understanding Data Analytics in Digital Transformation
Data analytics is the process of analyzing large datasets to uncover patterns and trends that can inform decision-making. It involves collecting data from a variety of sources and using analytical tools to uncover insights.
Four different types of data analytics should be utilized in a business.
Predictive - This uses different computer techniques like machine learning, mining data, and statistics. It looks for patterns, connections, and trends in the data that can help determine what could happen in the future.
Perspective - Prescriptive analytics takes it one step further by indicating the proper course of action. It does this by testing potential solutions using either big data or artificial intelligence. This allows for a precise plan of action that takes into account the forecasted outcomes.
Diagnostic - Using regression analysis, data discovery, and data mining, diagnostic analysis looks at the relationship between cause and effect. These techniques are used to analyze data and explain why certain events have happened.
Descriptive - Descriptive analytics helps companies with reporting by going through historical data, comparing numbers from one year to the next (e.g. sales, prices, customers, etc.), and looking at other key performance indicators.
To truly implement data-driven decision-making and make smart, impactful decisions across the board, your team should be using a combination of all four types of data analysis.
Key Benefits of Employing Data Analytics
The benefits of heeding a lighthouse on the open sea are clear. It's the same with data analytics. Here are just a few of the reasons you should be making it a part of your daily operations, especially as you sail toward digital transformation.
Helps Craft a Successful Digital Transformation Strategy
Before you even start your journey with digital transformation, you need to have a clearly laid out strategy. Basing this on data helps ensure that your decisions are not made in a vacuum. You also can measure the successes and failures of your strategy as you go, so you know where to change course if necessary.
Makes Digital Transformation More Efficient
By using data to analyze customer or user behavior, you can make changes that will increase efficiency and help you reach your goals faster. For example, you can use data to identify where customers are dropping off in the purchase process and make changes to the process to increase the likelihood of their completing the purchase.
Enhances Decision-Making
Data analytics can be used to inform the decisions you make throughout the digital transformation process. By analyzing data and trends, you can determine the best course of action. This helps to ensure that your decisions are based on facts and data, rather than emotion or guesswork.
Promotes Brand Trust and Loyalty
By collecting customer data and using it to provide personalized customer service or recommendations, you can show your customers that you value their opinion and are invested in their satisfaction. This will help to build loyalty and trust with your customers, which is essential in a successful digital transformation.
Increases Agility
Data analytics allows you to make decisions quickly and accurately, which is an important part of agility in the digital transformation process. By having the right data at the right time, you are better positioned to respond to changes in the market or customer demands.
Enables Automation of Complex Processes
Automation helps you save time and money, as well as reduce the risk of error. Data analytics can help you identify which processes can be automated and give you insights into how to do it effectively. It will also be integral to the automation process, allowing any AI and machine learning algorithms to be highly effective.
Helps You Monitor Performance
Data analytics can provide a comprehensive view of how well your digital transformation is performing. You can track key metrics such as customer engagement, page views, sales, and more to ensure that your strategy is on track. This helps you make timely adjustments to keep your digital transformation moving forward.
Potential Challenges of Data Analytics
Data analytics is a powerful tool, but it is not without its challenges. To make sure that your data is accurate and useful, you need to have a good understanding of how to obtain the data and how to interpret it correctly. Here are a few challenges to be aware of.
Data Quality
For data analytics to be useful for digital transformation, the data needs to be of the highest quality. This means that the data needs to be accurate, up-to-date, and consistent. Additionally, the data needs to be collected from reliable sources and be free from any bias or prejudices. This can be a challenge, but it is essential for proper data analysis.
Security
Security is another challenge that needs to be addressed when dealing with data analytics. Since data is collected from multiple sources, it is important to ensure that it is secure and that no unauthorized access is allowed. Having a data governance and management strategy in place is becoming more and more vital as companies become more reliant on sensitive data.
Scalability
Data analytics is not a static process; it needs to be able to scale with the growth of a company. As more data is collected, the analytics need to be able to keep up with the demand. This can be costly, but it is important to ensure that the data analytics can remain effective and efficient.
Data Analytics Best Practices
Simply knowing where a lighthouse is will not get your boat safely to shore. You need to have a plan in place for how to use that information. Here are a few best practices for your journey with data analytics.
Tip One: Data Democratization
Data democratization is a process of making data available to all stakeholders who need it. This includes internal teams, customers, partners, or even the public. By democratizing data, organizations can ensure that all parties have access to the necessary information to make the most informed decisions.
For data to be helpful for your team, they need to know where to find data and how to use it. This process will likely require training and upgrading your team’s skills with analytics.
Tip Two: Automation
Automation is a key component of data analytics. Automation allows for data to be collected, analyzed, and distributed in an efficient and timely manner. By automating processes, organizations can save time, money, and resources while ensuring accuracy and consistency.
Tip Three: Data Visualization
Data visualization is a powerful tool for data analytics. It helps to make data easier to understand by providing a visual representation of the data. This can help to identify patterns, trends, and correlations, which can lead to better-informed decisions.
A tool that encapsulates all these practices is Stormboard. This data-driven collaboration tool gets data to everyone on your team in a way that is easily understandable and even automates the reporting process so that all stakeholders can be up-to-date on your process.
The Bottom Line
As you embark on your digital transformation journey, data analytics should be a key part of your strategy. It can help you craft a successful plan, make changes to increase efficiency, inform decisions, and build customer trust and loyalty. With data analytics, you can navigate the open sea of digital transformation with confidence and success.
As the leading data-first collaboration platform and digital whiteboard, Stormboard provides organizations across various industries with an intuitive workspace where data can be viewed and organized in a visual manner, but extracted and analyzed in a meaningful way.
Our unique intelligent interface can be the key that unlocks your team’s understanding of use in a data to accelerate digital transformation. Click the button below to sign up for free and get started today!
About the author:
A programmer by trade, Nick Saraev is a freelance writer and entrepreneur with a penchant for helping people excel in their careers. He's been featured on Popular Mechanics & Apple News, and has founded several successful companies in e-commerce, marketing, and artificial intelligence. When he's not working on his latest project, you can find him hiking or painting.
