In the modern world of making analytical, data-driven decisions, we are often confronted with the thought of “I have all this data, but what does it all mean for my business?” Data is important, it is. In fact, my previous post was about following Amazon’s example of harnessing big-data to gain an advantage for brick-and-mortar retailers. But after the accumulation of all this data, as stated by Google’s chief economist, Hal Varian, the thought has turned to, “Data are widely available; what is scarce is the ability to extract wisdom from them.” More data does not equal more information.
Data just for the sake of having data is not helpful. Most people would agree that data can often be biased, and having an ocean of data can dilute the datasets that are actionable. For example, if you are expanding your bagel shop to another city, you want to know not general spending, but the spending for bagels in your target location. You do not need a vast amount of demographics data, but a simple dataset that informs you how many people are searching for bagels, and where those people are.
So how do you take a vast ocean of data and turn it into actionable insight? How do you extract the story that lies in-between the millions of data points?
This is where CIOs, data scientists, and statisticians can help. These professions are becoming the storytellers for businesses seeking to extract wisdom from the mounds of data that surround them. They can comb through terabytes of data and correlate as to why something is happening. By managing the data well, they are able to pick apart patterns in the data and weave narratives that are unique to their client.
Let’s look at the bagel shop example again. These specialists can look at the shop’s target region and provide insight by telling them the specific parameters that mean success for the business. Then they can plot a site-selection treasure map across the entire area to show them where those locations are that best matches those success parameters. Most importantly, having this treasure map can inform their next move, convince investors, or help allocate resources. Data is only helpful when it becomes information, and the information is only useful when it supports a service.