How to Stop Drowning in Data and Find Actionable Insights

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StrategyDriven Organizational Performance Measures Article |Actionable Insights|How to Stop Drowning in Data and Find Actionable InsightsWhen a small group of executives from mid-size companies got together to discuss data issues, the conversation quickly turned to what to do once you have too much data. The executives were drowning in numbers and wanted someone to toss them a life jacket.

These companies had already invested significant resources into their data infrastructure. They were tracking millions or billions of data points in real-time and with some of the best technologies. Their challenge was actually using the data to make better decisions. They had this high-speed, modern car that no one knew how to drive. Just like you might admire a nice car as you walk by it, they were admiring their data infrastructure. But cars are meant to be driven, not just admired.

Data overwhelm is rooted in psychology and isn’t always solved by technology. In fact, technology might make it worse by increasing the volume of data. You can’t drink from a fire hydrant, and that same idea applies to data.

Data overwhelm is the classic “walking down the cereal aisle” problem. Imagine going to the supermarket to buy a new cereal. You don’t know what you want and instead will decide once you get there. The only problem is that there are a hundred choices of cereal. They all look surprisingly similar, and they might even cost roughly the same. How do you make a choice when everything looks the same?

That’s the problem with data overwhelm. You’re confronted with so many data points that you’re not quite sure what’s important and what’s noise. You may have discovered that 40 percent of your customers went to law school but so what? Should you change your marketing campaigns to talk about the law, or should you ignore this insight?

Now multiply this by 10, 50 or 100 insights, and you start to see the difficulties. Who’s to say what’s important or who could make that determination?

The underlying principle is to reduce the overall volume. It’s not about designing a process that could accommodate the weighing of hundreds of variables. It’s about reducing the number of variables that you’re working with. You want ways to rapidly remove large swaths of unnecessary data so you can deal with the remaining few.

This concept usually gets push back. Executives expect some kind of magical formula that can be applied to all of their data and spit out the right answer. They basically want a magic eight ball that considers all variables and then tells them what to do.

Instead, it’s best to work with fewer inputs to produce more outputs, which are decisions in this case. Once they move in a specified direction, it’s much easier to redirect the momentum towards the correct destination.

To help tackle data overwhelm and start finding actionable insights within your data, use these four strategies:

1. Use gatekeepers

The first strategy to deal with overwhelm is to employ gatekeepers. Companies are trying as much as possible to reduce friction in accessing data, but you may want to add friction in some cases. Some companies make it too easy to create reports, and everyone is constantly building them without thinking through what they actually want.

If you’re interested in learning more about the location of your customers, what will do you with the information? If you don’t have a good answer, your fishing expedition might prove fruitless. If your team struggles to sort through all the noise, you need to become more deliberate in where and how you fish. Gatekeepers can ask a few questions to clarify the overall goal of creating a report.

You want your own devil’s advocate who is skeptical of data requests. The Catholic Church created this position to argue against any given individual’s canonization (sainthood). It would assign someone to literally “advocate for the devil.” The healthy skepticism ensured that facts were uncovered and observed.

2. Decide WDIM — or What Does It Mean?

The second strategy is to obsess over WDIM. Whenever you come across an insight, your team should debate what this insight means (WDIM).

If you can’t come up with good answers, you may be dealing with a vanity metric. Vanity metrics are interesting to look at but don’t actually mean much to your business. If a metric can go up or down without forcing a significant behavior shift within your company, then you can safely ignore it.

3. Choose 3 things

The third strategy is “3 Things,” and it’s the simplest to apply. If you can’t figure out how to prioritize your data, pick the three things that fit the best or seem the best to you. Then analyze these three insights further and take action on them or discard them.

Wrong choices are seldom fatal, but paralysis is. Moving forward can be beneficial because you can now gauge the impact of your decisions and adjust as needed.

4. Manage expectations

For some teams, having the pressure of delivering on a deadline is the thing that helps them break through overwhelm. They focus on prioritizing, making clear choices and finding the WDIM in their data.

Work with your teams to manage expectations around how data is used, and the different scenarios in which data is appropriate and where it can be safely ignored.

Data overwhelm doesn’t have to derail your data strategy, but you need to think about it differently. Focus on the people behind the data, and you’ll start to see solutions to this pesky problem.

About the Author

StrategyDriven Expert Contributor | Ruben Ugarte Ruben Ugarte is founder of Practico Analytics, providing expertise in data analytics. He has worked with companies on five continents and in all company stages, helping them to use data to make higher quality decisions, boost performance, increase profitability and make their teams world-class. He maintains a popular blog with more than 100,000 readers. His new book is The Data Mirage: Why Companies Fail to Actually Use Their Data (Business Expert Press, January 22, 2021. Learn more at rubenugarte.com.

7 Tips for Managing Your Business Data

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StrategyDriven Organisational Performance Measures Article |Business Data|7 Tips for Managing Your Business DataNo matter what industry your business is involved in, it’s likely that you work with significant volumes of data. Customer contacts, payment details, marketing data, product inventories, supplier information, and more. All this data is essential for maintaining your business operations and keeping customers happy, and it has become an integral asset for companies, big and small, all over the world.

But without proper data management practices, you are putting your business at great risk. There is the possibility you could lose data due to mismanagement or improper cybersecurity protocols. You could leak sensitive client information and damage your company’s reputation. In the worst instances, you could disrupt business operations, lose profits, and potentially face legal action from unhappy customers.

To avoid these unpleasant scenarios, any business owner needs to know how to manage their data. The following guide will outline some of the top tips for looking after your information and making the best use of your data to grow your business.

Create a plan

For any business to succeed in any endeavor, it is essential to have a plan. Come up with a comprehensive strategy outlining exactly what you want to achieve from your business data and how you are going to reach your goals. This will keep you focused along the way and will inform all important decisions you make. This plan should feature a data management policy that will help you and your employees follow the same consistent practices at all times.

Be compliant

Data is a sensitive subject in the modern world, and more and more consumers are becoming aware of their need for privacy. As a result, there are rules and regulations when it comes to collecting and storing people’s private information. Make sure you brush up on the compliance laws in your industry and incorporate these into your data management policy.

Collect and use data sensitively

One of the most effective tools in any business’s arsenal is digital marketing. Promoting your products, services, and brand to your ideal consumers through a variety of online platforms including social media, email, organic search, paid advertising, and written content. But to get your digital marketing campaigns seen by the people you want to see them, you need to gather their data. There are many different ways to collect this information. You could ask them to fill in form fields on your website, you can use cookies that track their online activity, or employ surveys and social media monitoring. However you choose to gather data, you must do it in an ethical, sensitive fashion. As we’ve already established, you need to be compliant with industry regulations. But it’s also important that you take the customer experience into account. If a consumer lands on your website and is immediately bombarded with cookie requests, form fields, and other intrusive methods, there is a good chance they will become frustrated and switch off.

To avoid racking up a high bounce rate, be more discreet about your data collection. Offer your web visitors great content or a chance to enter a contest in return for a few significant pieces of information like their email address and demographics.

Once you have collected their data, you can contact them and expose them to advertising and messaging related to their brand. But once again, you should take care not to overdo it. Rather than filling their inboxes with generic sales emails, instead, roll out a carefully crafted email campaign tailored to their specific buyer personas. This will help to maximize engagement and ensure you optimize your business data.

Boost your security

For any business, there are so many potential dangers that could befall your data. You could become the target of malicious cybercriminals who are out to steal your private information, or your computer system could be ravaged by bugs and viruses. Thieves could break into your premises and make off with your hard drives and computers, or a disgruntled employee could attempt to steal sensitive data and take it to a new employer.

As a business owner, you need to take steps to protect yourself against these eventualities. One of the most important things you should do is to install the best possible cybersecurity software across your computers. This will protect your systems and data from cyberattacks and viruses and give you peace of mind that your information is safe.

To keep your business premises safe from break-ins, it’s not enough to lock the doors each night. Most criminals are smart enough to get around a simple padlock or deadbolt, so it’s a good idea to invest in a more advanced business security system. These can vary in scale and cost, but the best solutions will include alarms, motion sensors, closed-circuit television cameras, and digital key codes. Although it will set you back financially, you can’t put a price on security and peace of mind.

Be careful about which people within your workforce have access to certain data, and ensure sensitive files are securely password-protected. It’s a good idea to use password management software for maximum security and change all passwords immediately whenever someone leaves the company.

Train your team

One of the biggest risks to your data is the people within your company. Someone could accidentally misplace a business device with customer data stored on it, or forward a sensitive email to the wrong person. These mistakes happen all the time in business, and although they are usually not malicious, they can be incredibly damaging. The best way to avoid them is to train your team up in proper data management protocol.

Creating a data security policy that everyone must adhere to will instruct your workforce in best practices for compliance. This should outline the proper use of devices, correct storage, and the processes to follow in the event of something going wrong. Provide regular training to keep your team’s knowledge fresh, as well as to update staff on changes around data compliance.

Back up data

If your business was subjected to a disaster and your data was lost, would you have a plan to get up and running again? What would you do if a fire or flood wipes out your computer system, or a virus wipes your hard drive? These scenarios could realistically befall any company, so it’s a good idea to have a plan B in place. If you are not backing up your business data each day, you should start immediately. This way, if something happens, you can recover it quickly and ensure as little disruption as possible. Backup your entire system onto an external hard drive every single day. Rotate between two or three different hard drives and always ensure at least one of these is stored outside of your business premises at all times.

Invest in database management software

For business owners strapped for time and resources, one of the most convenient and efficient solutions to adopt data management software. This could be a customer database tool like Salesforce or a marketing platform that allows you to integrate advertising data to a database, such as Amazon Redshift (https://improvado.io/integrations/amazon-redshift). These tools will allow you to keep all your data in one place and provide a much more efficient and secure business practice.

In conclusion, there are lots of things you can do to improve your business data management, and you don’t need to be a specialist to get started. By following these seven tips, you will improve your security and reap a wider range of benefits from your data.

3 Major Challenges Financial Institutions Face When Implementing Business Insight Technology

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StrategyDriven Organizational Performance Measures Article |Financial Institutions|3 Major Challenges Financial Institutions Face When Implementing Business Insight TechnologyIf you’ve been in the market for new business insight technology, such as a financial services analytics solution, the benefits of these are obvious. Promises made by your technology partner, such as increased analytics capabilities and improved compliance with regulators, are probably at the top of your mind. But you must also remember that any new technology you onboard will bring change to your bank’s operations—some of which isn’t welcome just yet. It won’t be as simple as rolling the software out across your enterprise, then expecting everything to go smoothly from thereon.

It’s usually the job of a bank’s chief financial officer (CFO), chief risk officer (CRO), or chief technology officer (CTO) to oversee tech implementation. If you’re in any one of these positions, you must be wondering how you can complete your implementation or modernization initiatives with the least amount of friction possible. It helps to know the challenges associated with introducing this kind of technology, so that you’re better prepared to win staff buy-in when needed. To guide you, here are some common obstacles to implementing new business insight technology. You’ll learn what drives these problems, as well as how to address them and guarantee an integration process that’s as smooth as possible.

A Resistant Culture

The first challenge that you’re likely to encounter is a familiarity bias within your institution. People may be partial to the bank’s existing way of doing things, especially for major tasks like financial analysis and reporting. They might be intimidated by the new software, as this will be their first time to see robotics and machine learning applied in banking processes. Or, they may be skeptical about whether it’s worth the cost, or the risk to a high-stakes profession such as finance. This kind of resistance is possible across different levels of the enterprise, from upper management to rank-and-file banking staff.

Those directly in charge of onboarding the technology must accommodate these doubts and prove that the new software isn’t as scary as it seems. Try to illustrate in concrete terms that the tech will serve a very practical purpose. It will make the task of deriving insight easier—not harder—to do.

Also worth explaining to your colleagues is that the tech will put you in a highly competitive position: that of an early adopter. It will allow your institution to master important business trends faster than your peers. You’ll also be better equipped to leverage your brand as a forward-thinking and future-ready one.

Admittedly, it may take some time for your institution to get over its initial resistance. But eventually, they will see for themselves that the investment is a rewarding one.

The Need to Align Technology with Human Capabilities

The next major challenge is ensuring that staff can sync up their human abilities for deriving business insight with that of their new technological counterpart. After all, it isn’t only technology that you should depend on to improve your bank’s situation. You also need to pay attention to the technology’s intended users and how the tech can enhance the way they work.

The staff who are in charge of financial analysis and compliance will likely have to adjust their workflow to accommodate the technology. So even if you’re onboarding a solution that’s easy to use, it would still be prudent to schedule further training with staff. You should also ensure that your bank’s IT staff are properly oriented on basic troubleshooting. If technical analysts run into sudden problems like server errors, at least your IT team will know where to start.

One thing’s for sure: the use of AI and machine learning in financial services analytics doesn’t necessarily mean that work done by humans is obsolete. The tech can actually enhance the quality of human staff work while relieving the latter of the more rote aspects of financial analysis. A smooth transition into staff members’ workflow and some additional practice with the software will make all the difference.

The Fear of Breaches to Data Privacy and Security

The final challenge pertains to assuring stakeholders that the bank’s financial data will be safe. Since banks handle huge volumes of sensitive customer data, this anxiety is very much warranted. It isn’t only money that a bank would stand to lose in a major data privacy breach or system-wide error. The institution could also lose the trust of its customers and the general public, which takes years to build.

You must have enough proof that the new business insight technology isn’t weak against malicious attacks and isn’t easily compromised by human or server error. That’s why it’s crucial to sign on a technology partner of good repute, with an established track record for information security. Look for clear and strong policies on their part for how to protect sensitive data. Your technology partner should also demonstrate an adherence to a security standard befitting of your bank. Lastly, they should be forthright with you about how to work through the worst-case scenario and craft an effective recovery plan.

Conclusion: Overcoming the Challenges, Reaping the Rewards of Using Business Insight Technology

Given that new business insight technology is such a high-stakes investment, it’s all right for the decision to be subjected to scrutiny. The bank’s stakeholders deserve answers to their questions, and they deserve proof that onboarding the software will be beneficial to the institution.

If you adopt a solution you truly believe in, your enhanced ability to derive and act on key business insight will speak for itself. Don’t be afraid to invite conversation about how the technology will change things for the bank, and its potential for improving everyone’s analytics capabilities.

How To Backup Your Business Data

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StrategyDriven Organizational Performance Measures Article |Backup Business Data|How To Backup Your Business Data

Data backup is a crucial part of protecting your business’s continuity. If your only backup is kept on a single computer or a mobile, and this is then lost or stolen, then your business data will be lost completely. If you have paper copies of your business data, this isn’t adequate data protection. If your business premises were to burn down, or suffer from severe flooding, then the data that you need to carry on your business would be irretrievably lost. Data backup is an important part of any crisis preparedness plan for businesses large and small.

Data Loss

There are lots of ways to potentially lose your business data, and protecting it should be a top concern for your IT. You could lose data due to:

  • A desktop or laptop hard drive crash, or damage to your mobile device, which could render your data unrecoverable
  • Your computer or phone being stolen. Break-ins at businesses are common, and most stolen laptops or desktops are never recovered.
  • Data being accidentally deleted or deliberately deleted by an employee who has been let go.
  • Your computer being hacked by malware
  • Your only storage accounts being hacked
  • A ransomware attack could make your files inaccessible to you until you pay a substantial fee to get back in.

A Data Backup Regime Is An Essential

For proper data protection for your business, you must establish an effective data backup system. These systems should follow these three steps:

  • Backup your business data on a regular basis
  • Create backups on reliable media, such as through Media Duplication Services, or in the cloud
  • If you use media for backups, you must store the devices in a secure, off-site location

A good, simple rule to follow for business data protection is that if losing the data would prevent you from doing business effectively, you need to back it up. Desktop software programs can be reinstalled if they’re lost, but recovering the details of things like transactions or business correspondence is usually impossible if these files are lost in any way, or damaged beyond repair.

Data Archive Vs Data Backup

Most backups are done periodically and are short-term images of data for disaster recovery purposes. Archiving is different, and usually refers to the long-term storage of data that is no longer being regularly used by your business, but can be restored if somebody needs it, for example, data about a former client or a completed project.

Backup Critical Business Data

There are two important steps to successfully backup your business data.

  • Identify the critical data in your business that needs to be backed up
  • Implement backups of this key data on a regular schedule

Your data backup should include all of the files that you have created or modified, so they can be regularly backed up. For a lot of business, this will include everything from accounting files to emails.

To make backing up easier, more and more business applications are now available through the cloud, where you can run automatic backups. However, if you are using desktop (non-browser) applications, then these can be reinstalled from media or downloaded, so you don’t need to back these up.

Cloud Storage

One of the best ways to make your data backup easy is to use online backup services. This is just one of the reasons why cloud computing can be enormously beneficial to small businesses. However, you should keep in mind that cloud services can still be vulnerable to losing your data to problems like hacking or employee sabotage, such as password changes or deletion. To counteract this risk, it is a good idea to take occasional local backups of any data that you store in the cloud.

Local Data Backups

If you choose to save your data locally and are not using cloud storage then you can make the backup process a little more simple by keeping all of the files that you know will need to be archived on a single drive on your computer.

For example, perhaps you need to back up files from accounting, word-processing documents, spreadsheets, emails, and photos. Putting your account program, Microsoft Office, Outlook, and Paintshop Pro all onto a separate drive will make it much easier to achieve all the files that you have created or modified with these programs. All you will then need to do is backup that one drive or folder. Once you have identified the critical data that needs to be archived, all you have to do is install and use a backup software program in order to safely archive your business data on a regular schedule.

It’s a smart idea to backup your data every night. There are lots of different backup software programs on the market that will allow you to set a backup schedule to suit you that will automatically backup all your data for you, without you needing to get involved after the initial setup. Backup software that also zips and encrypts the backup data will help to save on disk space and will increase the security of the data.

You should only keep your data backups on-site if you are able to keep them in a fire-proof, waterproof, indestructible sage. Investing in backup solutions like a tape drive or an external hard drive and religiously sticking to your planned backup schedule won’t help you at all if your data backup copies are then stored in one place, and that place is struck by a disaster like a flood or a fire. To really be secure, you must store your backups off-site. Cloud backup doesn’t completely eliminate this worry but is definitely better than most physical locations for storage.

Some businesses choose to keep their data backups in security boxes at banks. The fee for a security box, if you decide to do this, is usually tax-deductible, which is a bonus to choosing to store your data in this way. Other small business owners choose to keep multiple copies of the backed-up records at the homes of different friends or family members. It doesn’t matter where you choose to store your backups, as long as the place that you choose for storing your business data off-site is secure, and that you have regular access to it.

Online Backup Services

For the ultimate in security, you need to make sure that you always use strong passwords for these online backup services, change those passwords on a regular basis, and ensure that your backed up files have been encrypted. As cloud storage is shared, cloud providers will normally encrypt user data automatically.

USB (Thumb) Drives

USB drives are always being improved and increasing in available capacity, making them ideal for quick data backups. They still don’t have the capacity that external hard drives do, but they do have a fast data transfer rate and are easily portable. You can backup data to a USB drive very easily and take it offsite to a secure location. As they don’t have any moving parts, USB drives also have the advantage of being very reliable.

External Hard Drives

For small businesses, buying and using an external hard drive for data backups is one of the most commonly recommended methods. External hard drives are usually pretty inexpensive compared to tape drive systems. They are also very easy to use. All you need to do is plug in the hard drive into your computer’s USB port. Most external hard drives come with backup software ready to go to help you.

Local Area Network (LAN) Storage

If you have a local area network (LAN), you could choose to also backup your files to another computer or server. However, if the backup machine is kept in the same location, then be aware that it could be vulnerable to being stolen or being damaged by a flood or a fire. To prevent theft from being a risk, you could install the server in a locked cage, cabinet, or closet, and be careful about who has access to it.

Tape Storage

If you have large amounts of data that need to be backed up, or want to make and store regular complete data archives to be stored on a long-term basis, then tape backups are the best option for you. They are very reliable and can store a massive amount of data.

Back It Up Or Risk Losing It

No business should ever run the risk of losing your business data. The best defense against a disaster like this happening to your business is by using a proper data protection plan. If you create a proper backup system that includes regular archiving and backing up your business data on a regular basis and backing it up properly, you will be able to make sure that your business will be able to stand up to whatever problems might come your way, and keep on working and trading successfully. Remember that you can never have too many data backups!

Spend some time identifying what data you need to backup, choose how you want to back it up and how often, and decide where to store your data.

Analytics Are a Must for Business Success

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StrategyDriven Organizational Performance Measures Article |Analytics|Analytics Are a Must for Business SuccessBusiness analytics is a process in which businesses improve their operations by using statistical models to analyze data. They compare historical and current data and try to make adjustments where applicable to improve future performance. Business analytics’ first usage was in the late 19th century but did not become standard practice until the 1960s.

Analytics Gives Companies an Edge

Once companies really began to use business analytics, they quickly developed an edge over the competition. There has always been a level of adaptation that companies have made to keep competitive. However, the use of analytics gave companies the ability to look deeper into the data and discover more useful information to improve business.

Gathering statistics and analyzing them to try to find useful information only works if you are collecting the right statistics. It is easy to get bogged down in the wrong information and draw false conclusions from statistical analysis. Any data set taken out of context is likely to lead analysts down a false path. All of the relevant information must be gathered and compared in order for analytics to truly be useful.

New Coke Was Delicious… And Terrible

Gathering a data set in a vacuum can lead to tremendous business blunders. Take one of the biggest marketing failures of all time: New Coke. The blind taste tests conducted by both Pepsi and Coke showed that the majority of people preferred the taste of Pepsi to the taste of Coke.

Then after developing a new formula, Coke ran over 200,000 taste tests. The results showed definitively, that people preferred the flavor of New Coke to both that of old Coke and Pepsi. Then we all know what happened. Consumers hated New Coke and demanded a return of their original beverage. After three months, Coca-Cola Classic made a return, and everyone was happy.

The researchers did not gather all of the relevant information. One of the key pieces of information they overlooked was that people don’t typically only drink a couple of sips of a cola. They usually drink a can or a bottle. Some people drink several cans a day. For many, the sweeter taste of New Coke was not as palatable in large quantities as the original.

They also didn’t gather information about why people drank Coke. Pepsi was working very hard to be the “cool cola”, aiming at taking the youth market. Many of the people who stuck with Coke were about brand loyalty and nostalgia. They liked the beverage they had and were not looking for a change.

Had Coke done a proper analysis of the statistics, they would have looked at who was drinking Coke and why. By doing so, they would not have made such a mistake. Either they would have scrapped the idea of New Coke altogether or offered it as an additional beverage rather than an alternative.

Instead of replacing Coke, if they had continued to sell Coke Classic, but also offered “Coke Youth” to try to pull back some of the consumers they had lost to Pepsi, maybe people would still be drinking Coke Youth today, right alongside Coke Classic.

Sports Analytics

Despite an abundance of usable statistical information, it took a while for sports to follow in the footsteps of business in the use of analytics. Once they started using analytics to improve individual and team performance, however, they began to quickly perfect its usage.

While they may look big, sports organizations are relatively small businesses. Because of this, their analytics departments aren’t nearly as big as big banks or global retailers. As a result, they have to outsource a lot of their analytical needs. This has led to the creation of many sports analytics companies. The use of football analytics software enables these companies to provide needed information to clubs across the league.

One of the best usages of analytics that sports organizations have used, which businesses could greatly benefit from, is the effect of individual performance upon the team. Sports teams are able to assess the potential contributions of players beyond their individual statistics. Some players don’t put up the most impressive numbers but are able to elevate the level of play of those around them.

Some team members, whether in sports or business, are key to the success of the group. They are not valuable because they shine themselves, but because they help everyone around them to impress. Proper use of analytics can help businesses to make these determinations and so much more. The data is all there. It simply needs to be gathered and correctly analyzed in order for your business to thrive.