Is data a silver bullet for the slowing economy?

During the pandemic, companies with a strong understanding of their business as a whole, including employees, partners, customers and even suppliers, fared better than those without the ability to review and use data to drive growth.

History has shown that the greatest weapon against uncertainty is information. Understanding your business at a microscopic and holistic level is now more important than ever, as the threat of a recession looms. This means that information must be treated as a central tool in leading all businesses through any potential storm.

Rather than operating blindly, making impulsive decisions, overlooking trends, missing market opportunities or dedicating resources to the wrong things, savvy leaders dive into data to determine how each part of their business is contributing to their overall success. In using business data to make choices, those same leaders will be better placed to know which moves they need to make, if any, to pivot quickly if their business hits any speed bumps or road blocks.

Make your data work for your business

The uncertainty from the pandemic accelerated a variety of changes, but making data work for businesses is not new. With a possible recession on the horizon, leaders recognize that further action is needed, but "understanding" their business' data won’t be enough. The most well-positioned leaders know what information matters, where it is and who it is for, and use all those details to make data-driven and speedy decisions.

Fast decision-making during uncertain times is something that Vyaire Medical, a Chicago respiratory healthcare specialist has, after using trusted, in-depth supply chain data to quickly adapt to scale ventilator production from 60 per week to 600 per day after a massive spike in demand during 2020. Data allowed the company to predict trends, develop informed solutions, understand where there was flexibility and take action to remain competitive.

Data as a dynamic solution to recession responses

Data can be used to inform both offensive and defensive business strategies.

The most prepared leaders know how to play defense with efficiency gains -- reducing costs, requirements for skilled resources and time-to-value -- while at the same time investing in the future with offensive future-proofing measures including data-led initiatives such as AI or digital transformation.

These strategies allow companies to manage their way through the recession without impacting near-term business competitiveness or compromising on long-term strategy. While these strategies might manifest in different ways, depending on the business, at a high level, leaders should approach their data as a vehicle to capitalize on every business opportunity. They can do this by understanding areas such as:

●     Buying behavior: Predicting buyer behavior and identifying patterns is a necessity when it comes to scaling up or down as products and customer needs evolve

●     Revenue forecasting: This data provides leaders with the information needed to budget accurately ahead of time and to also avoid being blindsided by major shifts

●     Data democratization: Advocating for company-wide accessible data is a must for agile, informed teamwork. If more than one person knows how to access and use the data, IT teams avoid becoming overwhelmed during holiday periods

Estee Lauder is a powerful example of a company that leveraged data to not only survive, but creatively overhaul its business model in response to the pandemic. Previously, the company had a high dependency on in-person business with 85 percent of transactions occurring in stores, even though 80 percent of customer interactions began online. As thousands of storefronts shut down, company leadership switched to innovative data use to revitalize the company’s core business model and take full advantage of an all-digital consumer world.

Using newfound consumer insights, Estee Lauder built a 360-degree view of customers to increase personalization, deliver innovative marketing and to better predict consumer trends quickly. The result was a 30 percent uptick in revenue, improved management of supply chain inventories and overall an elevated and more competitive presence despite the economic downturn.

In the case of Estee Lauder -- and most organizations that prioritized innovation during the pandemic -- each solution and strategic decision can ultimately be tied to smart data use. Truly knowing what you have has always been a crucial piece to running a successful business.

Pandemic disarray taught us that data is necessary for survival, and it will continue to be a major tool as the economy grows more unpredictable. However, being "recession-proof" is never a guarantee. The uncertainty of these difficult periods makes sure of that, but business leaders owe it to their customers and employees to take a strategic approach that will provide the best protection possible. Businesses that make data a priority now are much more likely to weather the economic downturn successfully, to emerge on the other side with an established competitive advantage. 

Image credit: scanrail/depositphotos.com

Christal Bemont is CEO, Talend. She is a seasoned executive with a demonstrated track record in defining and leading sales and go-to-market strategies to significantly scale cloud businesses. Previously, she spent 15 years at SAP Concur, most recently leading its $2B business organization as Chief Revenue Officer. Prior to her CRO appointment, Christal was Senior Vice President and General Manager of SAP Concur’s Small, Midsized and Nationals (SMN) business unit.