Innovative Data Solutions: What Companies Should Be Doing

You Need Data to Innovate, But You Also Need Broad Data Usability

November 15, 2021
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Do you have the data architecture in place to allow efficient access and use? It’s a much more important question than it might appear on the surface.

You know you need data to innovate.  Insights allow you to make smarter and better decisions about your business and your company. However, if your data architecture isn’t operating at peak efficiency, it might be slowing you down.

With the right platform, processes, and systems, you will see significant gains in:

  • Shared knowledge
  • Greater efficiency
  • Increased collaboration
  • Enhanced risk control
  • Increased productivity
  • Better financial performance

So, what stands in the way of these gains?  A CEO survey by CIO Insights found that the biggest obstacles to data usability can be traced to three variables:

  • Lack of data integration
  • Lack of access to data
  • Inadequate employee skills or training

Here’s the good news about all of these variables.  Each one is controllable within your organization. In other words, you can overcome these barriers with the right architecture, system, and structure. 

Creating an efficient structure with the right platform and seamless workflow allows for data democratization to enable even non-tech team members to find and use the data they need.

Significant Gains from Data Usability

A study of Fortune 1000 firms conducted by The University of Texas and the Indian School of Business considered the issue of data underutilization and the impact of data usability.  It found that making data more usable and available pays dividends for companies both in productivity and bottom-line revenue.

Financial Gains

Even small improvements in data use can lead to big results. Making data pervasive throughout an organization and more accessible to line-level employees translates into significant financial impacts. For example, increasing the usability of data in Fortune 1000 companies by just 10% could create:

  • $2 billion increase in total revenue each year 
  • 16% increase in return on equity (ROE)
  • 1.4% increase in return on invested capital (ROIC), increasing net income by $5.4 million
  • 0.7% increase in return on assets (ROA), adding $2.87 million of value in fixed assets

Productivity Gains

Another key metric also shows a substantial increase: sales per employee.  This metric is often used as a way to measure the productivity of employees as it relates to overall performance.  

Studies show that even modest gains in productivity can lead to enhanced value, but that most companies suffer from varying degrees of what’s called organizational drag. These are all processes and workflows that take time and prevent employees from working efficiently. Not only do these barriers reduce productivity, but they also add to employee frustration.

When data is not readily accessible or data is difficult for employees to access and interpret, companies pay a heft price.  When data is easy to use, it makes a difference. A 10% improvement in data usability would result in a 14.4% increase in the rate of sales per employee per the study. Even a smaller improvement of just 5% would produce more than an 11% gain.

The gains are even more pronounced in some industries.  Here’s a breakdown of how small productivity gains would generate significant improvements in sales per employee across multiple industries.

Productivity Gain from a 10% Increase in Data Usability by Industry

  • Retail: +49%
  • Consulting: +39%
  • Air Transportation: +21%
  • Food Products: +20%
  • Construction: +20%
  • Steel: +20%
  • Automotive: +19%
  • Publishing: +18%
  • Industrial Instruments: 18%
  • Telecommunications: 17%

How to Improve Data Usability

Artificial intelligence, machine learning, and predictive analytics are revolutionizing how business is done.  The business intelligence that can be generated from data using these technological advances is important to nearly every aspect of a business. 

The combination of human and machine intelligence in analytics is powerful.  Yet, companies still struggle to collect, sort, analyze, and produce the data in usable forms. Data alone isn’t enough to empower your workforce.  Creating the tools and processes for employees to use the data is essential.

There are several challenges to broadening data usability.  More than half of the data companies gather is what’s known as dark data.  Despite collecting massive amounts of data, much of it is sitting in siloes or an inaccessible form.  One study showed that more than half of all the data gathered is untapped.

Improving data usability requires an honest assessment of your data practices and systems to find your blind spots when it comes to collecting, assembling, and delivering insights.

Identifying Obstacles

Start by identifying the obstacles that prevent you from taking full advantage of your data assets.  Take inventory of the types of data you gather, who uses it, and how.  It may also be helpful to understand who doesn’t use data (but should) and why.

If your company relies solely on your data team to research and provide information to employees, you need a more streamlined, automated system.

Keep It Simple

While your automation and technology need to be robust and able to handle complex tasks, the tools and interfaces employees use need to be simple.

Basic dashboards delivering real-time data allow employees to track key metrics.  Data visualization creates at-a-glance reports that make positive or negative events jump out. Self-service business intelligence tools let people drill down to the data they need without having to tie up data scientists or wait until reports are produced.

Creating a Single Source of Truth

When you expand data visibility, it’s crucial to make sure you have a single source of truth.  This requires you to ensure make sure your data architecture eliminates data silos so everyone is working off the same data insights.

You need clean, organized, and high-quality data that uses a common framework across your entire organization — especially for structure data.  

Maintaining Data Integrity

Clear data security, governance, and policies are also required to validate and maintain data integrity.

Access Control

Data democratization is a great goal, but rarely can it be applied universally.  You want employees with a valid business reason to have access to the data they need, but you also have a responsibility to safeguard sensitive and confidential information. 

You also need to evaluate who has access to data and make sure you have safeguards in place to manage and monitor access to meet internal and legal compliance.

Training

You also need to invest in training to ensure broad adoption across your organization.  Data won’t do anyone any good if it just sits in a data warehouse or data lake somewhere.  The value comes from unlocking the insights that help make better data-driven decisions.  That only happens if team members understand the value and you make it easy for them to use it.

Build an Effective Data Journey

At Hakkoda, we help companies build an effective data journey.  Whether you can use some help with migration, data architecture and engineering, governance, analytics, machine learning, analytics, or app development, we’re here to help.

Contact the data experts at Hakkoda for more information.

 

More from Hakkoda:

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