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Data utilization method for DX-thorough explanation of 5 steps and use cases until utilization!

Even if you hear the words “DX” and “data utilization,” it may be difficult to imagine what they specifically mean.

In the first place, I think that some people do not know what to do after collecting “data”. It would be very difficult to think about how to accumulate data and how to use it from scratch.

In this article, we will introduce how to use data, points to note when handling data, and case studies of companies that actively use data.

Table of Contents 

  • What is DX
  • Difference between DX and data utilization
  • 3 benefits of data utilization
    • ① You can dig deeper into customer needs
    • ②Improve productivity
    • (3) Use as reference material for decision making
  • 5 steps for data utilization
    • (1) Understanding the current situation and setting goals
    • (2) Accumulation of data and utilization of data infrastructure
    • (3) Visualization and analysis of data
    • ④ Data sharing
    • ⑤ Decision making using data
  • Notes on data utilization
    • (1) Data credibility
    • (2) Data protection
  • 3 selections of data utilization examples
    • ①Amazon
    • ②NEC (RICOH)
    • (3) ASKUL Corporation
  • summary

What is DX

DX is an abbreviation for “Digital Transformation”. Specifically, it refers to using data and digital technology to improve people’s lives and corporate initiatives.

By working on DX, you can aim to improve operational efficiency and reduce labor costs. Appropriate measures can also improve workability and profit margins.

Difference between DX and data utilization

Then, what is the difference between “DX” and “data utilization”?

In general, “data utilization” is considered to be the foundation of “DX”. In the first place, DX refers to using data and technology to improve the efficiency of operations.

Therefore, it is essential to collect accurate data in DX and use it for business . In order to succeed in DX initiatives, it is necessary to thoroughly analyze the collected data and make decisions based on the analysis results.

3 benefits of data utilization

What are the specific benefits of using data? Here are three benefits:

  1. Deep dive into customer needs
  2. Productivity can be improved
  3. serve as a basis for decision-making

I will explain each.

① You can dig deeper into customer needs

The first is the ability to dig deeper into customer needs. For example, if you understand the keywords that are often searched on EC sites, you can understand the products that customers want. Such data will help us build new products and services .

In addition, data such as product sales and customer reviews are also very useful data. Specifically, you can increase sales by putting your best-selling products to the forefront, or improve your products based on customer feedback.

Customer behavior and raw opinions can be used in formulating marketing strategies. By using data well, you will be able to launch products and services that customers want more .

②Improve productivity

Here are some things you can do to improve productivity: As mentioned above, the use of data allows us to dig deeper into customer needs, so we can see what kind of products we can expect to sell. This reduces costs and increases productivity by allowing you to focus on higher-margin products.

In addition, telework can be promoted by handling data online. It will also reduce commuting time and transportation costs, and improve work efficiency.

(3) Use as reference material for decision making

The last thing I want to mention is that it will be the basis for decision making. For example, when working on a new business, having appropriate data on the market makes it easier to decide what field to enter. Based on accurate market analysis, we can advance into fields that other companies are not working on and fields that are required by customers.

There are many decision-making situations in business management. But without data and analytics, companies cannot make the best decisions. Leverage data to make decisions that are aligned with your company’s current situation and goals.

5 steps for data utilization

We will introduce how to use data in five steps.

  1. Understanding the current situation and setting goals
  2. Accumulation of data and utilization of data infrastructure
  3. Data visualization and analysis
  4. data sharing
  5. Decision making with data

(1) Understanding the current situation and setting goals

The first thing to do is to understand the current situation and set goals . Find out what problems your company is facing and how to solve them. Since the data to be analyzed changes depending on the purpose, it is essential to have a clear understanding of the target.

(2) Accumulation of data and utilization of data infrastructure

In order to collect and use a huge amount of data, it is necessary to establish a system. In particular, it is necessary to segregate the data according to its intended use . Here, we introduce three data platforms that can be used to store data for different purposes.

1. Data Lake

Once data is collected, it is first stored in a data lake. A data lake stores all data regardless of its format. Since you will be storing a lot of data anyway, you will need to remove unnecessary data periodically. We must also be careful about how we handle personal and confidential information.

2. Data Warehouse

The data warehouse separates and stores the data in the data lake by purpose. Compared to data lakes, it has the advantage of making it easier to extract the necessary data because the data is separated by purpose. In addition, the data format is also integrated depending on the purpose.

3. Data mart

A data mart stores smaller pieces of the data in the data warehouse. It is very convenient when there are many departments in the company because it can be divided quite finely by department and purpose in the company. Since only the data you need is stored , you can extract the data you need more quickly and easily than with a data warehouse.

(3) Visualization and analysis of data

What you should do after accumulating data and dividing it by purpose and department is to visualize the data . By making a graph of the accumulated data, you can quickly grasp the facts shown by the data. It’s hard to analyze data just by looking at the numbers.

For example, if you have data showing changes in sales, make a line chart. Data once visualized can be used in presentations, etc.

When visualizing data, it is efficient to use statistical tools and BI (Business Intelligence) tools. These tools allow you to quickly transform your data into graphs and more.

④ Data sharing

Share the collected, accumulated, and visualized data throughout the company. By coordinating with each department, data can be used more efficiently. Data can be used in various fields in business, so it is necessary to establish a system for data sharing.

⑤ Decision making using data

Data is a big part of decision making. If you analyze the data carefully, you can make decisions based on clear evidence .

<Marketing strategy formulation>

Here are some examples of marketing strategies. For example, you can target your customers based on their age group or region of residence. In addition, purchase history and customer feedback give you an accurate picture of your customers’ needs.

If you can grasp the target and needs, you can come up with a better marketing strategy.

Notes on data utilization

Here are two points to keep in mind when working with data. The points introduced here are ” data credibility ” and ” data protection “.

(1) Data credibility

Using unreliable data will lead to erroneous analysis results. Whether it’s customer data or data related to products such as sales, use data with a large population to some extent.

In order to use more accurate data, it is necessary to collect a lot of data anyway. For that reason, the preparation of benefits is also effective. For example, when collecting feedback on products on EC sites, points and coupons that can be used from the next time onwards are often attached.

(2) Data protection

Data about customers is highly likely to contain personal information. Handle data carefully to avoid accidentally leaking customer names, addresses, dates of birth, etc. It is also important to use a trustworthy data infrastructure , as leakage of personal information can lead to big troubles .

You also need to prevent accidental deletion of valuable data. Awareness of data handling needs to be raised across the company and everyone needs to be careful.

3 selections of data utilization examples

Here are three examples of companies that are using data and incorporating it into their business.

  1. Amazon
  2. NEC (RICOH)
  3. Askul Corporation

①Amazon

Amazon logo

Amazon owns vast amounts of data about its customers. We know not only your customers’ personal information and purchase history, but also their buying habits and preferences.

If you have ever used Amazon, you may have seen it once, the lineup of “recommended products” is based on a huge amount of data. Based on the purchase history, the customer’s willingness to buy is improved by displaying different products that the customer may like.

②NEC (RICOH)

NEC Logo

NEC is working on data utilization jointly with cities, and collects data on various cities, including Roppongi Hills, and data obtained from city facilities. This platform is called “Hills Network” and is used for the operation and development of the city.

Also, by linking with Mori Building’s “Hills ID”, people can experience better services.

(3) ASKUL Corporation

Askul Corporation operates a site called “LOHACO” that handles daily necessities and consumables. ASKUL Corporation collects a variety of data, and all staff use the data.

For example, we collect detailed data such as which of the photos posted on the product page was enlarged and which route was used to put it in the shopping cart. By collecting such detailed data, it is possible to analyze the parts such as what kind of photos should be posted on the product page and how many.

summary

This time, we introduced the benefits of data utilization, how to approach it, and case studies of companies. What is especially necessary for utilizing data is data classification and data visualization by purpose.

Don’t just collect data, accumulate and analyze it appropriately. Better use of data can improve productivity and sales.

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