Whilst you might hear the word “data” and instantly think of complicated things you’d never hope to understand, it’s actually not always that complex.
Data can be simple, in reality it’s just information that is collected in order to be used for a variety of purposes. To help you understand data better, here are some ways that it is used that will explain why it is so important.
Making Improvements
Data can be collected in order to understand how well things are used and to try to identify flaws in those things. It could be a product, service or even a building or location.
Once this data is collected it can be analysed and then used to make improvements.
Ways Data is Collected
The key is to come up with a good way to collect this data, making sure that the way of collecting it is accurate and the data that is collected is useful.
A lot of electronic devices like smartphones, computers and video game consoles can now collect data from your usage. They will ask for your permission to gather this data as you use it, so you can opt out. The information will be kept anonymous too ,so there’s no need to worry, the data monitors how you use the product without gathering personal, identifiable information.
You may have noticed yourself that sometimes when an error occurs with a computer or games console, there is an option to report it to the company. This is basically a way for them to gather data to make improvements and try to ensure the fault doesn’t happen again.
As well as using technology to collect data, it can simply be collected by surveying people.
Making Investments
If you are interested in getting involved in investing, it might be useful to know that data can be used to benefit your trading strategy.
Quant strategies, also known as systematic investing, involve using data driven insights, amongst other techniques, to analyse and inform where you should be making your investments.
Using methods such as backtesting means gathering historical data and testing it against certain situations in order to see how well a future investment is likely to perform. While backtesting can’t predict the future, it is based on the theory that if something worked well in the past, it will work again. Data driven tests strive to back up that theory.
Help Make Business Decisions
As well as helping improve things such as a business or the way it is run, data collected can help you to make informed decisions. In fact, it’s not just business it can help with, many kinds of decisions and strategies are helped thanks to data backing it up and taking away some of the guesswork.
Pre-empt Any Issues
Data can also be gathered and then used to identify and prevent certain issues. Using data to monitor the quality of something helps you to maintain or improve that quality in order to stop it getting progressively worse until it causes a major crisis.
Using data this way can help continuously improve the running of a business in order to be proactive rather than reactive.
Tell You What’s Working
Alongside warning you of any issues, data can also tell you what’s going right. Being smart with collecting data helps you keep track of everything that’s going on, you can then analyse it and identify specific things that are working. You’re then able to use that knowledge in order to keep getting better and better.
Solve Problems
If something isn’t working, you can look at the relationship between two related sets of data to identify the cause of the problem. For example, the first lot of data shows a business is experiencing a lot of admin errors, the second lot of data shows a high staff turnover – are these two issues related?
Data is essentially proof that can back up theories or arguments.
Data Can Save the Day
As you can see, data can come to the rescue in many situations. If you or someone you know needs convincing about the importance of data, you can go ahead and refer to the information in this article. No need to shy away from data anymore!
