Johannesburg, 13 Aug 2020
Businesses are increasingly understanding the importance of data and the many uses to which it can be put, if analysed correctly. However, there is still a premium seemingly placed on the quantity of data that can be gathered for this purpose, while lesser attention is paid to how this data can be used to answer critical business questions.
Many organisations are also “hamstrung” by the lack of high-quality skills that can be used to interrogate the collected data sufficiently to obtain real value from it.
Manqoba Msimang, Head of Data and Analytics at Falcorp, points out that in the current pandemic, analytics can be effectively applied to relevant data in the health sector to more clearly understand critical aspects like the number of infections, the speed of recovery and the rate of death. It can also assist with planning in terms of numbers of hospital beds and ventilators available.
“While such information is crucial, from a health perspective, the pandemic and subsequent lockdown has also created massive challenges for companies, whose bottom lines have been significantly impacted. Companies can use data and analytics to improve their business situation, to better understand their own environment and ultimately to get a handle on how to mitigate the pressures created by the struggling economy,” he says.
“While analytics can be applied to data to assist a business with better forecasting and planning, to thrive even in these tough times, the business also needs to think creatively about its business offerings. For example, if it is a niche player, offering only one specific type of service, it needs to consider branching out to also offering other supporting services.”
What he means here, explains Msimang, is that if analytics shows that the majority of a car service company’s clients enjoy a cup of coffee from a particular nearby shop in the morning, the business may consider teaming up with this store to ensure its customers are offered a beverage while waiting for their service to be completed. It is this outside the box thinking – spinning directly out of the data analysed – that can help businesses keep their existing customers and even identify new revenue streams.
“Ultimately, analytics helps you to understand your customer base more thoroughly and can provide links between products or services that would otherwise have remained invisible. One study in the US showed that a major retailer discovered through the application of advanced analytics, that there was a clear link between the purchase of beer and baby diapers on a Saturday afternoon.
“It turned out that many men, when dashing to the store to stock up on beer for the day’s sports game, were asked by their wives to also pick up diapers while they were out. Based on this knowledge, the store was able to ensure the two products were situated close together, to make it easier for the customers acquire both items quickly. What this demonstrates is that if you understand the consumer well enough, you can draw a correlation between seemingly disparate products, or service offerings, that will enable you to either service the customer better or at least sell more products, if not both.”
A good example of how analytics can assist businesses currently struggling in the pandemic, he continues, is how it can enable the smoother operation of restaurants. Msimang suggests that these cannot currently keep too much stock on premises, because there is no certainty around consumption levels. Analytics can help the restaurant owners to determine which items are in the highest demand and then store the required base ingredients in greater quantities than for those items that are not in as great a demand. As an alternate service line, restaurant owners can determine if their clients normally come through for a quick meal before doing their grocery shopping. This being the case, the restaurant owner can then offer a “shopping-service” for all their sit-down clients.
“Basing such decisions on the deep analysis of clean data will give the restaurant a better understanding of what the most likely items to be purchased are, as well as the likely numbers of customers arriving. Based on this information, they can stock only what is required and only call in the number of staff that will be necessary. In this way, analytics has a direct and positive impact on the organisation’s cost savings and customer service,” he adds.
“For a few years now, there has been this notion of data as the ‘new gold’, but few businesses have really appreciated its value to that extent. However, the COVID-19 crisis has opened their eyes to its true benefits and I believe data and analytics are now going to take precedence in most companies’ strategies moving forward.”
He reiterates, however, the critical importance of ensuring that the data that is being used for analysis purposes is clean and has integrity.
“This is vital when you consider that a lot of big data being analysed today – especially from a client sentiment perspective – is drawn from the various social media platforms. Here, ensuring data integrity is even harder, and even more crucial. After all, every business today is aware that no matter how good your analytics platform is, if you put garbage in, only garbage can come out the other end,” he concludes.
Share