Data is the new oil: yes, we’ve all heard that statement (and perhaps you have too at times). And similarly, we have heard that the use of data is now essential for businesses.
But what does that mean?
Let’s start with a bit of history: the first oil well was drilled in Pennsylvania in 1859. Within a few years, the first oil company, Rockefeller’s Standard Oil, was born, destined to become an industrial giant: the name ESSO should suggest something to you.
The number of wells increased rapidly, but so did the value of black gold: the real economic fuel of the 20th century, capable of accelerating the growth of entire nations and changing their destiny forever.
A reality made possible by the use of extraction and refining technologies, capable of transforming an oily mixture into an almost infinite number of products that are now the basis of our lives.
What does this mean?
That it is our ability to transform our environment that generates value.
Italy is a country that has made the processing industry – manufacturing – a strong point and a source of pride. We are the seventh-largest manufacturing power in the world and the second-largest in Europe: a supremacy achieved thanks to entrepreneurs who have invested time and resources to create excellence that today makes us leaders in machinery, furniture and many other industries.
We live in a culture profoundly linked to transformation. Why not apply this principle to decision-making? Dealing with data to obtain information, using it as the basis for your strategies: a transformative approach that also touches the immaterial.
We are looking at companies that can be considered the “ESSOs of data”: think for a second about the Big Techs that have emerged on the world stage. And yet, many companies are still wary or unprepared on this issue. In Italy, for example, just over 10% of SMEs use Big Data analytics systems in their operations.
The reason for this diffidence?
A cultural and training gap: the technological transformation in the last thirty years has run fast, with an acceleration more and more decisive in recent times. Let’s just think about data for a moment: every day, according to calculations, we produce over 2.5 quintillion bytes.
Small note: if you have no idea how much that is, one quintillion is equivalent to a thousand quadrillion.
Numbers that are hard to imagine but which have an extraordinary power: that of becoming information capable of translating into a competitive advantage. For companies, data can replace the expectations and perceptions we rely on. Our sensitivity as managers and entrepreneurs is essential, but with a compass to guide it, it can become an even more effective tool.
The use of data can be that compass. The reason?
Because data is quantifiable: it can be identified and measured objectively. And anything that is measurable can be controlled more easily.
A rule that is especially true in business: it is only through reliable information that we can control randomness. This sounds like an oxymoron, but it is not, and a few concrete examples are enough to understand this:
- The CFO uses data to analyse the company’s economic and financial performance and take corrective action in time.
- The digital marketing manager collects data to identify market trends, define buyer personas and modify existing strategies on the basis of this evidence.
- The sales manager builds his sales plans on data: macroeconomic forecasts, previous year’s sales, market analysis and much more. He collects and generates information on customers to improve customer satisfaction, or insights on prospects to quantify an opportunity and build a customised and profitable value proposition.
The same approach can also apply to the way we build our business relationships and enter new markets: having the right information can make all the difference to a manager looking for partners, customers, distributors or suppliers, especially when moving into new geographies.
Immediate benefits include reducing the risks of internationalisation and speeding up go-to-market.
After all, growth in foreign markets is no small challenge and requires efficient methods and tools.
Search engines provide thousands, or even millions, of results: the risk of getting lost in a myriad of ‘non-information’ is high. The same danger arises with classic databases based on industrial codes: lists of companies that are all too often out of date and unable to provide a reliable picture of our potential partners.
If what we are looking for is a needle in a haystack, having a magnet can help us: a means of finding the right information among too much data, putting order where it is needed. Only in this way can we make better decisions, faster and without wasting precious resources: a repeatable process that makes us more competitive in today’s increasingly complex market.
But who provides us with this magnet?
Business leaders have the task of educating their organisation on the value of using data for strategic purposes: a process that can be based on a make or buy logic.
In the first case, the data-driven approach becomes a prerogative of the company itself, capable of activating dedicated paths to increase the skills of its employees in this field.
In the second scenario, the organisation makes use of external partners specialised in the supply of high added value insights: analyses capable of transforming complex data into accessible information, within the reach of all those organisations ready to change their way of acting.
Because today, more than ever, this is the new fuel that drives the engine of companies, in any sector: choosing it is essential to achieve new goals. Faster, more securely and with the certainty of making the best use of their resources.