These days, it’s almost impossible for businesses to avoid collecting data about the business itself, as well as its customers. Unfortunately, many businesses collect data in huge quantities but give substantially less consideration to issues of data accuracy, accessibility, or usability.
If your business collects data but never seems to get anything out of it, keep reading to better understand why accurate and comprehensive data is crucial for your business.
Like it or not, it’s become a data-driven world. Businesses rely on the data they collect to inform their decisions. Let that sink in for a moment. Businesses collect data and then make decisions with it without always ensuring that the data is accurate or comprehensive. You can also improve your data collection efforts with dedicated data collection software.
Let’s look at an example of how this might work against you. Let’s say that you’re a startup that’s trying to refine your customer profile based on your early users. You’ve collected data on them, but how accurate is it? If you collect incomplete, inconsistent, or inaccurate data from your customers, it can’t help but skew your customer profile.
Granted, you can’t do anything about customers intentionally misrepresenting themselves in the data they provide. You can strive for data accuracy by ensuring that you get the same data from every customer.
While many businesses have minimal compliance requirements, some businesses work under very strict compliance requirements. For example, two common examples of compliance-heavy businesses include healthcare providers and finance businesses.
Healthcare providers must protect patient information, particularly digital medical information. In addition, finance businesses must comply with various financial and data protection regulations. So, how do you know if you’re meeting those requirements?
This is an area where you need comprehensive data about your business. It’s the only way to trust that your business and your employees meet compliance standards.
Inaccurate or incomplete data can put you in a position to spend a lot of money wastefully. For example, let’s say that you build an inaccurate customer profile based on inaccurate or incomplete data. Once you have that profile, you hand it over to your marketing team.
Your team will create marketing materials that appeal to the kind of customers who match that profile. Of course, those marketing materials will likely prove only partially successful since the profile isn’t as good as it could be. In the best-case scenario, you get a mediocre reception to those materials. Worst case scenario, you wasted that money creating marketing materials you must replace entirely.
Beyond that, your marketing team will spend money placing that marketing material or advertisement. They’ll pick communication channels that someone who matches the customer profile will frequently visit, such as specific websites or publications. If your product or service doesn’t actually match up that well with those customers, you wasted some or most of those marketing and advertising dollars.
If you’re in manufacturing, inaccurate data can prove even more troublesome. Enterprise resource planning depends on good data. Without it, your system may recommend underbuying or overbuying raw materials. That can leave you undersupplied for demand or with too many of the wrong raw materials on hand.
That same bad information can also lead down the road to overproducing or underproducing your products. That can prove disastrous if one of your products has seen a recent spike in popularity and that data doesn’t get included in your demand planning.
If you feed complete and accurate data into your ERP system, on the other hand, you’ll get far more accurate predictions about how much you’ll need of what materials and what products.
It’s easy to assume that having a lot of data on hand means having accurate and sufficiently comprehensive data. The harsh reality is that volume doesn’t indicate accuracy or completeness.
Accurate, comprehensive data is the gateway to improving decision-making, reducing wasteful spending, and ensuring compliance. With both, you can save time and valuable resources. You can even find yourself on the wrong side of some fines.
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