How analyzing big data can increase profit in your company
There is a reason that Fortune 1000 companies are investing big money in big data analysis – it can increase profit significantly.
According to a report from Workforce that compiled seven years worth of research, data analysis was what gave companies the edge. Advanced reporting was not only saving money but also helping businesses to gain a larger market share and increase profit margins. This was because of the intelligence big data provided; instead of guessing future consumer behavior, companies could make accurate predictions. Overall, organizations investing in analytics were more productive, agile and profitable. In this article, we discuss three key ways big data analytics can directly increase profit margins, improve performance and motivate staff.
1. Sustained improvement in performance
Data drives productivity across the workforce. Whether it is individual or team performance, data has been proven to drive efficiency. Data gives staff tangible goals, by creating a clearer picture of their targets, behaviors, and patterns. As opposed to one-time training investments, big data is a perpetual resource that continually fuels productivity in an adaptable, agile way.
Furthermore, data empowers management to identify areas for improvement, whilst promoting a culture of accountability and transparency. Through data analysis, senior staff can evidence their strategies. Additionally, robust evidence that an approach yields results can manage situations where opinions differ or conflict occurs.
2. Smarter human resources
It may be surprising to some that data can influence and improve how human resources departments manage recruitment. Tapping into data can help companies to headhunt the most promising talent by comparing and contrasting performance metrics. From here, businesses can retain these valuable staff members through the culture of clarity that data-based working environments foster. Essentially, data-driven human resource strategy has significant short- and long-term benefits, creating a productive, motivated staff team who will increase profit margins.
3. Data will undoubtedly increase profit
Bain & Company conducted a study of over 400 businesses that found those with the most developed analytics capabilities commanded a larger market share. In addition, they were twice as likely to be in their sector’s top 25% for profitability, and five times more likely to make swifter decisions than competitors. Considering these statistics, businesses that are not exploiting the potential of big data analytics are certain to fall behind.
Furthermore, a study led by the University of Texas confirmed Bain & Company’s findings. The UT survey analyzed data sets from Fortune 1000 corporations and measured the impact data analytics had on profits. Some notable findings included:
- - Companies could increase profit by more than $2 billion a year by making just 10% of available data usable.
- - Return on equity increased by 16% by making data more accessible.
- - When advanced reporting was deployed, return on investment increased by 0.7% – which is equal to $2.87 million in additional revenue.
- - Most importantly, a comparably low investment in data analytics was required to produce these significant gains.
4. Find the right data partner
To fully exploit the potential data holds, it is crucial to have a good data set. This means extracting clean, quality data that is visualized thoroughly and legibly. With the help of the right data partner for your organization, you can begin to access clear, actionable insights that will reduce overheads, streamline operations, and increase profit.