The coronavirus pandemic hit the world so hard in 2020. The lockdown and other forms of restrictions imposed on the public also affected many businesses.
Even today, some parts of the globe are still implementing different levels of community quarantines to control the spread of the disease.
2020 was also the year when most organizations realized assuming prior performance can predict results in the future would make them foolhardy; gut decisions won’t work either.
It’s true even for startups that have just registered their businesses with Ontario business registry platforms or registries in other areas. Even international enterprises are no exception.
With data sources increasing rapidly as well as local and cloud storage on the rise, businesses have to observe trends and identify patterns from the substantial amount of operational and customer data they generate every day.
In fact, most large enterprises now invest a chunk of their resources in data collection, storage, security, and analysis.
Why Focus On Data?
A company inserting big data and analytics into its operations can enjoy five percent productivity gains and six percent profit increases, according to PwC—a data and analytics consulting firm in the US.
Being data-driven also makes an organization more confident in its decision-making processes because companies can see what’s working and what’s not, allowing them to fix any problem quickly. They know how to use data insights, so they’re willing to take more risks.
All this information supports the claim of Mckinsey Global Institute that investing heavily in data analytics and game-changing insights are six times more likely to retain existing customers, 23 times more likely to win new ones, and 19 times more likely to hit target profit.
Having A Data-Driven Startup
Becoming a data-driven company isn’t a simple process. Startups, however, have an advantage as they can still build data into their organization’s framework.
Don’t miss these five steps if you want to jumpstart a data-driven new business:
1. Create A Data Culture
One of the keys to building a data-driven startup is to develop a data culture. The most significant barrier preventing an organization from becoming data-driven is culture, not people or technology.
It’s also the main block identified by leaders of many different companies when they tried to focus on unlocking the value of data faster ever since the pandemic began.
For startups striving toward a data-driven culture, the following questions should be considered:
- What should be the company’s data strategy?
- How should the company approach data management?
- What are the problems in the daily operations of the organization where data might help?
- Should the organization’s decision-making process be centered around data?
- What data capabilities or skills should employees possess?
- What analytics practices should be followed within the organization?
Embarking on a path towards developing a data culture in a startup means reviewing these vital questions and finding answers for each of them.
2. Provide Data Access To The Right People
Entrepreneurs looking to start a data-driven business should organize their systems and every application they use in a way that the right people can access easily. In this way, decision-makers can act quickly without any problem.
Today, technological products like mobile applications are designed around what specific data an organization needs to make decisions.
The last thing you want is to waste the information at your fingertips. That’s why you have to avoid dumping data only to be arranged for use in analytics a week, month, or year later.
3. Create A Roadmap For Insight
After fostering a culture of data and providing access to your people, a roadmap has to be created to make your data strategy clear.
Make sure, though, that you already have a thorough understanding of the data your company is working with regularly.
Creating a roadmap for insight involves the following:
- How customer needs and behaviors are understood, measured, and segmented
- How to build models that’ll help your organization predict future behaviors
- The key performance indicators you’ll consider and how to measure them
The absence of a clear strategy and a roadmap means time and money spent on data collection and analysis will be wasted. You’re still getting and analyzing data, but there’s no assurance they’d positively impact your company.
Your organization becomes data-rich but poor in insight.
It’s essential to note that data is only valuable and delivers significant results when it’s used appropriately. That’s why not creating a roadmap puts any expected return of investment at risk.
4. Get The Right Technology
There’s no shortcut to a data-driven startup, not even new technology. Data culture and technology, however, work hand in hand in helping a business embrace data.
That’s why the right, modern technology is still necessary for starting a data-driven business.
Examples of outdated technology that must be replaced as they tend to result in a data-hoarding culture include:
- Email as the primary communication source
- On-premises data warehouses
- Siloed data marts
- Reports and dashboards
Companies wanting to empower their staff by achieving an innovative culture of transparency, trust, expertise, and insight sharing should invest in a new technology portfolio.
A modern technology portfolio usually has:
- Cloud-based communication and collaboration tools like Microsoft Teams and Slack
- Logical data warehouses
- Data lakes
- Augmented analytics
- AI-driven insights
5. Prioritize Company-Wide Data Literacy
As previously mentioned, it takes more than just technology to transform a startup business into a data-driven organization.
There’s also a need for everyone on the team to speak the same language because implementing changes towards achieving a data-driven culture requires new processes as well as new skillsets and behaviors.
Data literacy allows everyone involved in the company’s daily operations to start speaking specific terms on how to go about both data usage and analysis.
The following steps will help support an organization’s transformation into a data-driven one:
- Equipping everyone with vital information that aligns with their position
- Offering training, mentorship, and learning activities to improve skills and knowledge of team members on how to act on available data and come up with better insights
- Putting the right metrics in front of team members through reporting and analysis tools
- Data democratization to give non-technical users data access
- Coaching people within the organization on the correct usage of business intelligence tools
- Helping the right people understand results and how to make decisions based on them
Each industry’s leading organizations are wielding data, analytics, and insights as competitive weapons and innovation catalysts, which means you’re not alone undertaking the challenge of running a data-driven business.
You can succeed by staying flexible to changing needs, defining every process to be taken, investing in the right technology solutions, and prioritizing company-wide data usage.