Everyone involved in managing a business has one thing at the center of their professional lives – decisions. Striving for success in business means constant attempts to make the best possible choices. The most likely way to arrive at those right and solid decisions is by basing them on good information and strong analysis. Thus, no wonder that business people today crave for as much data to base their strategies on as possible. This leads to the rise of alternative data as an important supplement to more traditional data sources. This supplement is now a necessity for ensuring business success. Learn more about alternative data sources here.
Variety of important information
The enormous importance of data for business decisions has been acknowledged and accepted for quite some time now. Another key thing to understand, is that simply possessing that information is not enough. In order to reap the benefits of alternative data one must also integrate said data into their decision-making processes, which requires a deeper understanding of AI technology and alternative data. For now, we will focus simply on the benefits of alternative data once it’s been applied.
One must also accept that information comes from various sources and in various shapes, thus as many different types of information as possible should be utilized. Thus, if once when talking about data for business decisions we mostly meant traditional types of sources like press releases and financial statements, now we are referring to a great variety of information that may be extremely useful.
With the rapid development of the worldwide web and other advancements in data collection and transmission, many important types of information are now available for business managers. Below are just a few examples of types of data that have been successfully used for business and investment decisions.
- Satellite imagery data and geolocation
- Credit/debit card data
- Social sentiment data (product reviews, social media sites, and other indicators of public sentiment)
- Job posting data
- Technographic data
- Financial data from alternative online sources (when used in conjunction with traditional financial data)
This list can go on and on as many kinds of data and many ways to use it for business benefits have already been identified. And as there are no limits to human ingenuity in business, new ways of using previously overlooked data sources are constantly being thought of and tried.
Thus, these are the times where many options are open to try out new strategies in business decision enhancement through information. And the best way to start is by taking a look at what has already been proven to work well.
Benefits of alternative data for business decisions
As there is a growing number of alternative data sources and ways to utilize them, to go over all of them would take an entire book or a few and not a short article.
Therefore, let us look at a few of the most important ways how alternative data can be used to enhance decisions in different business procedures.
1. Better marketing strategies
Alternative data sources provide many different perspectives of the market and target customers. This allows you to have a well-rounded marketing strategy that takes into account all the different features within the industry, client needs, and popular sentiment. Alternative data types such as tech product review data gives an opportunity to adjust marketing strategies by analyzing public reactions to specific products and finding out what works and how it can be improved for the future. Additionally, marketing and sales can greatly benefit from alternative data that enhances lead generation. For example, company data can provide you with information about businesses that may benefit from your services or products.
2. Improved recruitment
HR is another department that can benefit greatly from utilizing alternative data. Public resume data and other alternative types of information allow to make better hiring decisions and future recruitment plans. Thus, no wonder that data-driven recruitment is constantly gaining momentum and is becoming more of a standard than an alternative way of hiring. Similarly, companies are able to utilize alternative data help build AI-based recruitment tools, that recruiters can use to find a perfect match for a particular position. Furthermore, HR benefits from gaining a better understanding of their new employees and prospects, when their needs and wants can be based on factual and up-to-date data.
3. Well-informed development decisions
All the important decisions in business are built on the foundation of managerial choices. Thus, management always has to build well-informed development strategies to make sure that the good decisions of other departments really count. Alternative data greatly enhance such decisions. Various types of non-traditional data about other companies form strong competitive intelligence which is used to gain an advantage in the industry. Even further, historical data can also provide companies with developmental decisions. Particularly, combining mathematical models and historical data can help predict market trends that matt inform developmental decisions. A better understanding of the market that comes with the analysis of different data sources points to the best direction for development plans.
The power of diverse data
For every type of decision-making, there are kinds of data that can be used to enhance it. Above are just a few examples of how alternative data improve decisions in traditional departments of business.
Generally, the main advantage of utilizing alternative data sources is the diversity of such sources. Luciano Floridi, an Oxford professor and academic advisor for Google, uses a cooking analogy saying that “the data are the ingredients of our dish. We process them to obtain a specific outcome.” To go further with this analogy, we can say that the more variety you have in your ingredients, the better equipped you are to cook a great dish, which in this case is a great decision. Further, while some companies still rely on traditional data sources, or even homogenous data types, there is no doubt that the considerable growth within the big data industry has proven that alternative data works.
Ultimately, there is great power in the diverse and informative sources of non-traditional data. Harnessing this power can only benefit business processes, and consequently enhance your business decision-making.