As an MBA student at LBS, I have been learning a lot about data analytics and how it can help businesses make better decisions. One of the assignments that challenged me was to develop a PowerPoint presentation on how a company can source data for setting up their data infrastructure. This required me to do some research on the concepts of data, database, and database management systems. In this blog post, I will share with you what I learned and how you can apply it to your own business.
What is Data?
Data is any piece of information that can be recorded and used for analysis. For example, the name, location, and purchase history of a customer are all data points that a business can collect. Data can be quantitative (such as numbers) or qualitative (such as words).
Why is Data Important?
Data is important because it can help businesses understand their customers, products, markets, and competitors. By analysing data, businesses can discover patterns, trends, and insights that can help them improve their performance, efficiency, and profitability. Data can also help businesses identify problems, opportunities, and solutions.
How to Source Data?
Data sourcing is the process of identifying and collecting data from various sources. Data sources can be internal (such as sales records, customer feedback, or employee surveys) or external (such as social media, web analytics, or industry reports). Data sourcing is an essential step for any business that wants to build a data infrastructure and leverage data analytics.
To source data effectively, a business needs to develop a conceptual business model. This is a high-level representation of what the business does, how it operates, and who it serves. A conceptual business model can help a business evaluate the potential data points that are relevant and useful for its goals and objectives.
For example, let’s take Amazon.com as a case study. Amazon.com is an e-commerce platform that sells products from various suppliers to customers online. To source data, Amazon.com needs to understand how it interacts with its customers and suppliers, and what kind of information it can collect from them.
Some of the data points that Amazon.com can source are:
Customer profile: This includes personal information such as name, email, phone number, shipping address, etc. This data can help Amazon.com segment its customers and personalise its offers and recommendations.
Customer behaviour: This includes actions such as browsing, searching, adding to cart, buying, reviewing, etc. This data can help Amazon.com understand its customers’ preferences, needs, and satisfaction.
Product information: This includes details such as name, description, price, category, rating, etc. This data can help Amazon.com manage its inventory, optimise its pricing, and improve its quality.
Supplier information: This includes information such as name, location, contact, reputation, etc. This data can help Amazon.com evaluate its suppliers, negotiate its contracts, and ensure its delivery.
By sourcing these data points, Amazon.com can gain a comprehensive view of its business and use data analytics to enhance its value proposition and competitive advantage.
How to Store Data?
After sourcing data, the next step is to store it in a database. A database is a collection of related data that can be organised, accessed, and manipulated. A database can be stored in different ways, such as on paper, in your mind, or on a computer. However, for modern businesses, the most common and efficient way to store data is on a computer.
Storing data on a computer has many advantages, such as:
Capacity: A computer can store a large amount of data, which can be useful for businesses that collect a lot of data from various sources.
Speed: A computer can process data quickly, which can be useful for businesses that need to analyse data in real time or in batches.
Flexibility: A computer can modify data easily, which can be useful for businesses that need to update, delete, or add data frequently.
Security: A computer can protect data from unauthorised access, loss, or damage, which can be useful for businesses that need to ensure the confidentiality, integrity, and availability of their data.
To store data on a computer, a business needs to use a database management system (DBMS). A DBMS is a software program that helps users create and maintain a database. A DBMS can also help users interact with other software applications, such as programming languages (e.g., Python, R) or data visualisation tools (e.g., Tableau, Power BI).
There are different types of DBMS, such as relational and non-relational. Each type has its own advantages and disadvantages, depending on the nature and structure of the data. In the next blog post, I will discuss the differences between relational and non-relational databases and how to choose the best one for your business.
My Takeaway
Data is a valuable asset for any business that wants to make data-driven decisions. To use data effectively, a business needs to source, store, and analyse data. In this blog post, I explained how to source data by developing a conceptual business model and how to store data by using a DBMS. I hope this blog post was helpful and informative for you. Stay tuned for the next blog post, where I will talk about the types of databases and how to select the best one for your business.
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