In the digital transformation process that many companies are going through, data is a central element. They are the ones that allow you to automate tasks and inform decisions, which are essential activities in the digital age, which is increasingly agile and competitive. However, having access to the enormous amount of data from big data is not enough to improve your company’s performance. They only contribute to strategies when business intelligence — that is, business intelligence — kicks in to turn data into information.
It is this information that generates intelligence for the company’s strategies, in all its areas: marketing, sales, finance, HR and others. Therefore, raw data is not strategic, but information can be.
So how to do this in your business? How to collect data and turn it into valuable information? That’s what we’re going to talk about in this article. Follow:
What is the difference between data and information?
Data and information are terms that are often used interchangeably. But to work with them in your company, it’s important to understand the difference.
A piece of data is raw information , which initially has no use value, but holds a potential for it. Information, on the other hand, is the result of data processing , which gain meaning and value, within a context and according to some objective.
In marketing, for example, you might have a database about your customers. However, it is necessary to analyze these data, select what interests them, make crosses and correlations between them and interpret what they say in order to transform them into information.
The information then also needs to be processed and interpreted to turn into knowledge , which can be used for different purposes — for example, in creating a persona or custom marketing strategies.
To better understand the difference between data and information, we can make an analogy with mining. A dataset would be like an ore. It contains valuable minerals, but also many materials that are expendable.
So, it is necessary to extract, select, organize and combine with other elements to generate minerals that have economic value, such as iron or nickel. In this analogy, these valuable minerals would be information extracted from the data, with strategic value for companies.
However, just as iron and nickel are still transformed into materials and products for the final consumer, information is still transformed into business strategies — the final product of the process.
How important is it to transform data into information?
When we talk about big data, we are talking about data, not information. The amount of data that exists is enormous, but it needs to be transformed into information for it to be useful in business.
As you can see from the chart below, the amount of data created worldwide grows exponentially and is expected to reach 181 zettabytes (1000⁷ bytes) by 2025.
However, this does not mean that we have more information in the world, because they depend on intelligence and tools to process the data. And not all organizations know how to work with big data and turn data into business intelligence .
In a survey conducted by ASG Technologies , 45% of respondents said their company is not harnessing the full potential of data. In addition, 38% said that half, most or all of their organization’s data is obscure (“dark data”), meaning it is not used to generate insights and aid decision making.
Therefore, turning data into information is essential to dealing with big data and giving it meaning and value in the context of your organization. It is with a series of information extracted from the data that you can establish better strategies and make better decisions.
This is what we call business intelligence or BI, which is the business area responsible for collecting and processing data to support management . Although few companies have a specific area for this, it becomes increasingly essential to support business decisions, minimize risks and avoid failures.
How does transforming data into information help decision making?
By turning data into information, and information into knowledge, you can make better business decisions. Next, let’s better understand what kind of information and decision you can improve with this process.
Improve operational efficiency
Data collection can serve to monitor the efficiency and productivity of the company , both machines and employees. With this data, it is possible to identify production bottlenecks, delivery delays, skills gaps and other opportunities to improve operational efficiency.
Optimize inventory management
Inventory management is a sensitive area for companies. It is necessary to maintain a balanced stock, which does not present unavailability to the consumer, but also does not generate excessive storage expenses. For this reason, managing inventory based on data is essential, as it allows you to forecast demand and calculate the minimum required inventory .
Identify market trends
Recurring data collection allows you to maintain a history of market behavior. In processing and analyzing this history, it is possible to identify patterns that tend to repeat themselves in the future. Thus, predictive data analysis , through algorithms and statistics, reveals forecasts and market trends for companies to prepare their strategies.
Redefine marketing and sales strategies
Marketing must always keep an eye on the market’s responses to its strategies . Access, conversion and sales data must become information to support the change of direction when a strategy is not generating the expected results. With agile marketing , adjustments to strategies become even faster.
Optimize marketing investments
Monitoring marketing metrics helps you identify which investments are paying the most for the business. Metrics such as revenue, conversion rate, cost of customer acquisition (CAC) and return on investment (ROI) drive marketing budget allocation decisions , with a focus on strategies that deliver the most results.
Understand the competition’s movements
You can also spy on the competition through data. There are tools that collect data about your competitors — without violating your privacy, of course — and help you understand your digital marketing, SEO , social media and other strategies . So you can adjust your strategies and anticipate their moves to gain competitiveness.
Understand consumer behavior
Understanding consumer behavior is essential for targeting your business and campaigns and creating the persona for your marketing strategies. With these well-defined elements, you can create content and ads aligned with the people you want to reach.
Customize the customer experience
Collecting and processing consumer data also allows you to create personalized, often automated, strategies. Data about the consumer profile, browsing history, purchases and interactions are transformed into information to personalize email marketing, product recommendations and interactive content , for example, which generate more conversions.