Data science can help business owners make the key decisions which drive profit. However, this only happens when data science is approached correctly. Here are five things that every business owner, big or small, should know about what data science is, and how it is used.
1. Numbers Must Be Interpreted
Data scientists work with numbers. Numbers, on their own, are devoid of human psychological insight. When you collaborate with, or hire a data scientist, expect to start by investigating cold, hard numbers. It is up to the data scientist and the business owners together to start telling the story behind the numbers, and applying a psychological lens to the figures that are mined from the data.
2. Data Science Is Not A Magic Bullet Solution
Some businesses approach data science as if it is a fix-all. Terry Bandy, Senior Data Scientist with twenty years of experience, explains that Data Science is a tool which is similar to night-vision goggles. Without the goggles, an individual may be blindly bumping into objects. With the goggles on, the individual can travel smoothly between and past obstacles and reach a desired destination. The night vision goggles won’t actually pick you up, and move you from one place to the next.
In the same way, data science can illuminate much of what is going on in your business beneath the surface. For example, by collecting the right big data you can learn exactly where your customers are coming from, and how many touch points they have with your company before making a purchase. Before learning this information, you were blind to this information. With these metrics on hand, you can devise a plan that will lead to more purchases.
3. To Work With Data Science, You Must Change Your Mindset
It can be frightening to put your own ideas about what is a good decision or bad decision aside, and trust the numbers that are before you. Often business owners express that when they first started taking a data-driven approach to business, they resisted leaning on the numbers. However, when businesses start trusting the data rather than their own limited instincts, they start to get positive results.
Many of us approach business thinking that we have all of the answers. We believe that our customers think and act in a certain way, without ever taking the time to examine the data. It can be very shocking, the first time you are confronted with data that disproves a belief you had about your business. It takes a great deal of wisdom and practice to put your own beliefs aside and allow your decisions to be guided, above all else, by the numbers.
4. Data Science Is A Process
When you start to use the tool of data science within your business, you are starting in on a journey with no end point. This means that you likely won’t work with a consulting data scientist once, and then look at your numbers and have all of the answers. Instead, you will mine one set of answers, and change your business practices. At the next branch in the road, you will go through the mining process again.
5. Data Is Useful In Small Doses
Although data science is focused on the power of big data, you can use a numbers based approach in small doses. Small business owners should know that they can harness the power of data science by choosing one or two metrics within their businesses, and working with a data scientist to interpret the numbers. Terry Bandy explains that data scientists who work with business owners interpret data with a business intelligence viewpoint. He says, “Most of us have years of entrepreneurial experience behind us. We are fascinated by business, just as doctors are likely fascinated with the human body. The numbers become diagnostic tools.” One or two numbers can make all of the difference.
Data science is a powerful tool for businesses to use. If you aren’t harnessing the power of big data, it is time to start. Even in small doses, this approach can help businesses move from a place of struggle to a place of success.