Data collection is a crucial aspect of business analysis and can make or break data-driven initiatives. Collecting data well allows businesses to understand their customers, track performance, and make informed decisions. However, as technology has advanced, the amount of data available to businesses has grown exponentially. This can make it difficult to separate the signal from the noise and focus on what is truly important.
Goal Setting: The guiding light 💡
One of the best practices for data collection is to focus on the specific goals of the data and what would make it useful for your business.
Before beginning the data collection process, it is important to clearly define what the business hopes to accomplish with the data.
Instead of blindly collection information, setting up the right initiative and use case for the data can ensure that the right data is collected and that anything that is collected is used in a meaningful way.
Get what you need: Avoiding analysis paralysis 🤯
Another important practice is to collect only the data that is truly necessary. Many businesses fall into the trap of collecting as much data as possible, without considering whether it will actually be used. This can lead to a cluttered and overwhelming dataset that is often difficult to navigate. Depending on the analyst’s expertise, this can often drive someone to investigate data that may be irrelevant such as fields that are sparse and missing. By being selective about the data that is collected, businesses can reduce the noise and focus on the information that is most relevant to their goals.
Somewhat on the last topic of avoiding unnecessary information, quality is another aspect of data that is critical for deriving insights. Businesses should ensure that the data they collect is accurate, complete, and reliable. This will help to ensure that the analysis is based on sound information and that the results are trustworthy.
An example might be a feature of clients that is critical for demographics or behaviour, like household income or active email readers, that might happen for your business. As the feature might appear important, depending on how complete the data is and the size of the sample can indicate whether the good behaviour is an anomaly or if the incomplete data is enough to identify a significant pattern.
Privacy and Security: Cover yourself 🙅♀️
Privacy and security is a huge area worth getting familiar with as cyber security is an industry estimated to grow. In 2021 alone, companies globally spent more than $150 Billion USD on cyber security, according to a McKinsey report. Businesses should take steps to protect the personal information of their customers and ensure that the data is not mishandled or misused. This includes implementing proper data storage and handling protocols, as well as ensuring that the data is only shared with those who have a legitimate need to access it.
The importance of data collection in business analysis cannot be overstated. However, it is important to remember that less is often more when it comes to data. By focusing on the specific goals of the analysis, collecting only the necessary data, and ensuring the quality, security and privacy of the data, businesses can make the most of the information they have and make better decisions. This way, companies can act quickly on the data they have without placing themselves at risk of breaches or unnecessary time spent on analyzing irrelevant variables.
Data collection is a vital aspect of business analysis, but it’s sometimes unclear where to start so that you can action on the information you have. Encourage your team to approach data collection with a curious and open mind, it will help to ensure that you are gathering the most valuable information for your business. EV Advisory’s experts are always on hand to help you with your data strategy needs and how you can improve your data collection efforts with a goal-oriented mind. Reach out to us!