Iowa companies learn how data can help drive their business

September 8, 2017 | Iowa companies learn how data can help drive their business

Business owners are in a world where they can learn the tiniest of details about their customers’ habits, their employees’ whereabouts and how their machines and equipment—even their lightbulbs—operate. And that’s only the tip of the iceberg.

“It sounds ridiculous, but when you think about it, you literally have data coming from almost every piece of equipment and even the products,” said Jeremy Clopton, the director of forensics and valuation services for BKD, which has an office in Des Moines. “It’s not sci-fi anymore. It’s here. That’s really what’s making this such a challenge. Data is literally coming from everywhere.”

While data is everywhere, that doesn’t mean all of it is useful or that businesses leaders should even be focused on it, experts say. There’s also the challenge of how to capture, store, transfer, analyze, search, share and more.

“People see how easy it is to make charts in Excel, and they see a big pile of data and all of a sudden they are geniuses,” said Jason Greer, the owner of Higher Standard Consulting in Des Moines. “Sometimes they misunderstand and end up making bad decisions. The hard part is taking that big data and realizing what is truly valuable in it.”

Greer said the classic example is a group of board members with a pile of charts with various metrics. Each person interprets the informational differently and chooses to focus on what he or she views as the most important even if it’s information that has no importance to the business.

“What I find is that companies will usually measure what’s easiest to measure,” he said.

Clopton’s job is to help inform organizations how they can use their data to better run their business. Depending upon the nature of the industry, this might be finding ways to reduce fraud. For others, it might mean adjusting services for clients to better meet their needs or organizing employees to increase productivity. In the agriculture industry, it means telling farmers where they missed planting a seed in the field or predicting when a disease might strike their crops.

“Everybody is talking about big data, and everybody is talking about analytics, but then that’s all they’re focusing on,” Clopton said. “They’re losing sight of the end, of the fact you’re still doing the same thing you’ve been trying to do the entire life cycle of your business—how do you want to do this? Data is secondary. It’s not the focal point. You have the goals, and how does the data support them?”

Businesses Begin to Appreciate What “Big Data” Can Offer

Data analysts and business owners alike agree the term “big data” is one of the newest catchphrases. They also agree it’s challenging to explain what quantifies as “big data” because it’s different to each business. For some, it’s when Microsoft Excel can no longer handle the information; others, when the computer can no longer support it. Some Iowa businesses even avoid use of the term.

In general, Clopton explains it as “a lot of data that is com-plex and diverse and coming from a lot of different systems.” Analyzing data is a small component of BKD’s work, but it represents a rapidly growing sector of its portfolio, said Marv Debner, a partner with BKD.

Clopton said business owners often get focused on their data. Once they realize it’s secondary to their decision-making, then they can begin to use it more effectively.

“It’s really easy to lose sight of the fact that data’s only useful if it’s helping you meet your goals,” he said.

The first step for business leaders is to set their business strategies and objectives. Only then do they ask what data would be useful to meet those objectives and strategies. If leaders are uncertain or don’t have that information, then they need to start capturing it as they move forward, Clopton said.

Greer said he asks companies to focus on the “languages of levers,” the information that affects the basics of the business, such as problems the business faces and how to solve them, how to increase revenue, and how to reduce costs.

“The hardest thing is to get companies to simplify down what truly is the essence of the business and what are the drivers of that,” he said. “People are going to be successful with big data when they ask what is the real question we’re trying to answer here. That’s where you start. You don’t start with the big pile of data and look at what it’s trying to tell you.”

Data, New Technology are Significant Drivers of Product Offerings

John Deere uses the newest technology to develop products and services that help its customers collect various types of data. This starts with planters, combines, sprayers and other equipment and how they perform, and continues with the software within these machines that collects data about seed planting depth, soil moisture and much more.

This is changing the way farming is done in Iowa and across the world, said Lane Arthur, the director of digital solutions for John Deere.

“One of the things we are seeing in agriculture today is if we can show our customer the data from their operation, from what’s actually happening on their farm, then they are able to make better and more informed decisions about how they can manage their farm,” Arthur said.

The data John Deere’s machines collect is accessible through mobile and web-based applications. Customers can choose to share this information with about 80 other partners and receive immediate feedback on when to spray a field or what type of seed to use for planting.

Technology also has made John Deere’s machines more sophisticated to provide data in the form of proactive machine alerts that notify the operator if a part is close to breaking or has another problem. This gives farmers more notice and less down time with the piece of equipment, Arthur said. Machines also are equipped with cameras and other sensors that guide the operator in planting and other functions.

Stacey Pellett, a state public affairs manager for John Deere, said more detailed data combined with precision agriculture tools helps farmers move at a quicker pace. Previously, most waited until the end of harvest before applying fall fertilizers. Now they can share the data about the crops that were harvested from a field and the details of the soil with their agronomist, so that within 24 to 48 hours after harvest, they can be back in the field applying their fall fertilizer.

More data that is scientically based means a higher confidence in those decisions and the ability to be better environmental stewards, she said.

“We can change the way we farm and see an improvement in the way the ground is responding,” Pellett said.

The future of agriculture will mean even more detailed information about what is happening within a specific field, Arthur said. Farmers will break their fields down into zones and be able to fertilize and plant the field based on elevation, soil type and other factors.

“They can manage those parts differently because they have the data,” he said.

Data Offers Past Insight, Predictions and Options to Change

Data analysts mostly agree data can be grouped into three areas:

• Descriptive: What has happened? This historical analysis can help organizations learn why something happened or more information about a company’s customers and their habits. This can help businesses review processes to determine whether they have enough inventory, if their equipment operates efficiently and whether they meet guaranteed product windows, for example.

• Predictive: What’s likely to happen? Will customers buy new products? Who are potential customers?

• Prescriptive: What changes could be made to meet the predictions? For example, how could a lifestyle change affect a person’s health? Should an insurance company stop selling a specific type of policy to a specific age group?

The latter two areas are often ignored.

“Most companies are not ready for predicting the future,” Greer said. “Most companies right now spend a lot of time looking at the past.”

The ability to analyze the appropriate data means businesses can develop new products or adjust current product offerings to better serve clients, and they can better learn what they need to know to run their business. For manufacturers, it can help them decide whether to purchase new pieces of equipment or provide quotes for clients about the cost of producing a product.

“The simple question is: ‘Is the data actionable? Can I see a piece of data today and know how it’s going to help my business perform in 30 or 60 days?’ ” said Tim Ernst, a partner for cloud and enterprise resource planning software solutions for BerganKDV.

A business’s data is most effective when its data is healthy and its systems are tied together so it can understand how sales, accounting, inventory and more are connected and affect the future, he said. For example, a business should be able to pull how many customers have bought a part and not yet paid for it, or how long it takes to produce a particular widget. A business also needs to make sure its data is consistent across the board for analyzation. If one system tracks client gender with an F or M, then other systems need to be the same or recognize the various tracking nuances.

Having clear objectives can help business owners know which data to collect, said Nick Street, a research professor and department executive officer in the Tippie College of Business at the University of Iowa. However, he said there is a bit of trial and error as a business’s data is collected and filtered to determine what is valuable and can help drive predictions. Sometimes predictive models are built to determine this.

Business leaders move into the predictive side as their businesses become more mature, Street said.

“A lot of the people I work with have been collecting data for years, and they’re just now figuring out what to do with it,” he said.

One of the biggest challenges business owners face is trying to combine data that is being collected through separate software programs, Ernst said.

The majority of Iowa business owners need to catch up when it comes to implementing new technology that will allow them to collect more data, he said. The challenge is fighting a mindset to continue doing things how they have previously been done or resisting an investment in new technology because a high dollar amount has already been invested in old technology.

Learning Institutions Offer More Data Analytics Education Opportunities

The University of Iowa has three academic programs geared toward data collection, mining and analysis. Interest in the undergraduate business analytics and information systems degree has grown from no students to 200 in about two years. The University’s off-campus master’s degree programs are full.

“Companies are seeing the value of it, and students say, ‘I want to be that valuable person,’ ” Street said, adding that the insurance, accounting/financial and retail industries have all ramped up their hiring of data analysis positions.

“They are really investing in how we analyze customer data and make better decisions,” he said.

This can mean using customer data to determine where to build stores, how many candy bars to have in the store, and even where to place the candy bars on the shelf within the store.

Iowa’s programs are teaching students to do this and more. Students dive into “big data” manipulation and are taught how to read text data such as insurance claims and medical records to extract data. Students participate in real projects for corporate programs as part of the work for their degree. Faculty members guide students as they sort through a company’s data.

“That’s when they really see how messy and ugly data is, and to dig through it and see what’s relevant and what’s not and to make solid predictions and well-justified conclusions,” Street said.