- 5 benefits of business data analytics
We’re drowning in data. Astronauts landed on the moon in 1969 using a tiny fraction of the data on personal computers today. The amount of data we’re producing and accessing is growing exponentially, projected to double every two years until 2020.
At the corporate level, the vast majority of that digital information is falling through the cracks, taking valuable insights with it. Bain & Company reports that only 4% of companies make good use of data analytics — leveraging the right combination of people, tools, and data with the intent to drive improvements.
Why is it smart to have a big data strategy? One workforce report analyzed seven years’ worth of research on business performance in the U.S. and sums it up this way:
“Fortune 500 companies are investing tens of billions of dollars in Big Data initiatives for a simple reason: to save money and gain market share by accurately predicting future behavior rather than guessing at it. Rapidly advancing analytics-based solutions have changed how forward-thinking employers manage their workforces to help them become more productive and profitable.”
Let’s look at some specific categories where data analytics drive organizational improvements.
5 benefits of business data analytics
1. Data powers continual performance improvements
When it comes to individual and team performance, data can be a significant productivity driver. It can show management areas for improvement and help employees be more aware of their work habits and activities. Rather than a one-time investment in some kind of training or seminar, this kind of data can be an ongoing resource — one that continually reveals new pathways to improvement as more and better data is collected.
Sodexo’s 2016 Workplace Trends Report points out one example of how decision-makers can tap into data to make beneficial, productivity-boosting policy changes. An insurance company analyzed group productivity data and found that work-from-home employees were 18–22% more productive than their in-office colleagues. As a result, the company instituted a new work-from-home policy that survived multiple leadership changes based on the strength of its data.
2. Data encourages well-informed decision-making
Data can back up decisions with hard evidence and provide balance in situations where opinions vary widely or emotions run high.
Plus, the more data businesses analyze, the more helpful an aid it becomes. As the workforce performance report cited earlier points out, analytics engines get “smarter” as they absorb a company’s actual outcomes and connect them to the data being collected — and this happens “without the biases and other limitations that individual decision-makers experience.”
3. Data enables smarter hiring choices
One important decision-making category where employers can use data to their advantage is in staffing. From talent shortages to skills gaps, finding qualified new hires can be challenging, especially in high-skill industries like technology and healthcare.
A Deloitte report on corporate talent and leadership sums up the issue:
“We have clearly entered an economy in which talent is considered a critical and scarce commodity. When this happens, companies should get smarter about every single talent decision. Enter the world of ‘data-driven people decision-making.’”
The report explains how data-driven companies use algorithms that predict the engagement of potential employees, which help managers make hiring decisions, determine which management methods will produce optimal performance, and more.
But it’s not only the hiring stage that can benefit from data-driven insights. After employees are already on board, data can contribute to more effective training methods. One example of this concept in action comes from a large global corporation that analyzed internal data to determine why employees were missing customer service targets.
Based on that analysis, the company changed its recruitment and training processes, which, within only 12 months, produced measurable results, including:
- a 5–10% improvement in customer issue resolution rates, which translated to…
- an estimated $1.2 million in cost savings for each percentage point of improvement, for a total savings of 5 to 12 million dollars from just a single data-driven initiative
To sum up, tapping into data can help businesses recruit and retain the best talent, then generate insights into how to improve their performance. In this case, data-driven hiring and training methods produced a domino effect of benefits, leading to both improved customer service and increased cost savings.
4. Data delivers a competitive advantage
Data and analytics are undeniably a part of the modern workplace, made more accessible by the technology and tools available to put them to good use. Corporations that don’t mine their value risk falling behind their more forward-thinking, data-driven competitors.
A Bain & Company survey of more than 400 large businesses found that organizations that have the most advanced analytics capabilities tend to pull ahead of industry peers. Not only are such companies twice as likely to be in their industry’s top quartile of financial performance, but they’re also five times more likely to make decisions faster than market peers.
5. Data drives revenue gains
Many business initiatives boil down to one goal: increasing profits. How can data help in that department? Let’s take a look at what the research says.
One University of Texas study dug into data sets from Fortune 1000 companies in every major industry to analyze the impact data has on key business performance metrics. The results revealed that making even very small improvements to existing data can reap big benefits.
Some of the study’s notable findings revealed that the average Fortune 1000 company could:
- Increase its revenue by more than $2 billion a year by increasing data usability by just 10%
- Increase return on equity by 16% by increasing both the quality of data and the ability of salespeople to access it by just 10%
- Increase return on investment by 0.7% (which equates to $2.87 million of additional income) by increasing both the intelligence and accessibility of data by just 10%
Most significantly, the areas for data improvement highlighted here (such as quality, usability, and accessibility) required only very small upgrades to produce financial gains.
Discover the data-driven technology behind Crossover’s commitment to workplace productivity
WorkSmart is a workforce management and productivity solution developed by Crossover to help workers and their managers tap into the type of data and analytics that drive performance improvements at both the individual and team levels.
We like to think of WorkSmart a personal, data-driven productivity coach for knowledge workers. It measures data points in many critical areas, including application usage and time spent task-switching or surfing the web.
Like athletes who rely on real-time data to improve their performance, WorkSmart serves as a performance coach for individuals to build on patterns of success and become better contributors. It generates eye-opening insights on behaviors to change or avoid, like too much time spent multi-tasking, checking emails, or in meetings — insights that workers rarely see for themselves, and that managers and businesses urgently need.
Based on Crossover’s combination of top global talent sourcing and effective productivity analysis powered by WorkSmart data, we regularly see clients achieving productivity gains that exceed previous results by up to 50%.
WorkSmart in action
Andy Montgomery, senior vice president of engineering at Aurea, uses WorkSmart to manage his team’s time and productivity. For his 105-person team costing $5 million a year, WorkSmart operates in the background, collecting performance data. It analyzes how every team member works and allows Andy to set custom metrics to track progress and activity.
As WorkSmart gathered data, Andy viewed his team’s performance in real time, identifying top and bottom performers and establishing best practices. Thanks to WorkSmart’s insights, he could:
- Access a reliable, real-time stack rank of his team
- Identify team members contributing the least (bottom 20%) to overall team productivity
- Align calendars and activities to the highest performers’ successes
After just one month of using WorkSmart, Andy projected a 50% increase in productivity and a 20% reduction in the team’s operating costs by the end of the quarter.
“Accomplishing this would be impossible without WorkSmart,” he said. “I can’t do what I do in engineering without it — it’s literally impossible.”