Professionals believe companies are only using data to 75 percent of its potential, new study finds

As anyone with a basic understanding of business knows, data is an absolutely crucial part of effectiveness, success, and productivity. Keeping up with industry trends and being informed when it comes to statistics are important to a business’s day to day and, ultimately, its bottom line. From driving results to understanding customers and industry climate, data plays a major role in the success and operations of businesses of all types and all sizes.

For those whose jobs revolve around analyzing KPIs and other pieces of data, it’s imperative that companies use these numbers to their absolute fullest potential in order to leverage them to their advantage. In a new study, Unsupervised surveyed a group of employees who work with data every day to get a sense of how they feel their companies are using the information they’re collecting and analyzing.

The study showed some eye-opening results and shed serious light on some of the ways that businesses are failing to effectively take advantage of these metrics in order to make informed decisions in both the big picture and the day to day.

According to respondents of the study, the type of data most frequently analyzed and tracked by their companies was sales volume (45%), followed by customer demographics (38%), average order volume (35%), and production time (31%). Employee performance metrics and task completion time both tied at 30%.

The initial findings also highlighted that small businesses who had less than 50 employees were less likely to aggregate or analyze data. On average, respondents said their companies spent $1,973 a month on expenses related to collecting and analyzing data. Most companies (42%) kept their data tracking in-house, though 34% said they used external support, and 24% opted for a hybrid of both.

Sentiment regarding the leveraging of data on the part of the companies represented by the study’s respondents was largely positive, with 85% saying they felt their company was using data effectively overall. That said, one of the biggest takeaways from the survey was the fact that respondents felt their company was using its current data to just 75% of its potential.

Small and midsize businesses, interestingly enough, were found to be more likely (86%) to use their data effectively than large businesses (78%). Some of the sentiment, when it came to how specifically companies could better utilize data, related to both employees and customers; 55% of respondents felt their company could better leverage its data to improve employee retention and satisfaction, and 55% also felt their company could more effectively leverage data to improve customer acquisition and retention.

For those who don’t work with data regularly, it can sometimes appear on the surface to be difficult to comprehend and grasp, let alone actually analyze. But for those that use data in their jobs every day, how difficult is gathering and analyzing it? As it turns out, 58% said gathering data was easy, compared to 24% who said it was difficult and 18% who said it was neither. Nearly 55% said analyzing data was difficult, compared to 30% who said it was easy and 17% who said neither.

Interestingly, when asked whether using data to make decisions was easy or difficult, 49% said it was easy, 30% found it difficult, and 21% said neither. What were some of the challenges respondents said companies face most frequently in regard to data? About two-thirds said the top challenge was resource-intensive processes for gathering and analyzing data, while 52% said a major obstacle was uncertainty over how to begin gathering or analyzing data.

Certainly, there are issues that can be caused by the ineffective use of data. The Unsupervised survey shed some light on what problems are most prevalent, with the No. 1 problem being varying interpretations of results (55%), followed by confusing results (54%), an inability to use the results (40%), and results being too complex to interpret (38%) or misleading (19%).

The study made it a point to specifically put a spotlight on KPIs, asking respondents about the top KPIs that their companies track as well as the areas where they can improve on them. An overwhelming 95% of respondents felt that their company had room for improvement with KPIs, with the most common areas of improvement being having more relevant KPIs (65%), making better use of them (61%), and having more KPIs overall (57%).

Employee performance was the top KPI that respondents’ companies tracked (69%), followed by marketing and sales (46%) and employee habits/behaviors (43%). Interestingly enough, just 38% of respondents said that revenue and profitability was a top KPI being measured at their company, while just 30% said customer metrics.

The survey also showed that 59% of companies consider profit margin to be in their top three KPIs, and 34% placed employee satisfaction among their top three, which is especially interesting given the challenges that often come with tracking this type of metric.

The findings on KPIs are especially notable because of just how important KPIs are to the growth of an organization. A lot has been written about how crucial these indicators are and for good reason.

Overall, the study showed that while data is viewed as crucial for the success of a company, many businesses still have work to do in regard to collecting and leveraging data effectively. There are a number of reasons why data is essential to success: It helps get a sense of demographics, conversion rate, consumer patterns, and so many other important elements that help inform the direction of a business. With the right approach to leveraging the most important types of data, it can undoubtedly set a business up to get the best possible results and performance. The survey signals that employees who work with this data every day often feel that the information they utilize in their day-to-day roles isn’t always being utilized to its fullest potential and that companies can improve significantly on how they gather and analyze such information.
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