Data analytics is the process of extracting value from data. Business owners need to understand that data affects virtually every aspect of their company life cycle. Every transaction, customer interaction, and the business process generates data as an outcome. And if this data is not managed efficiently, it may lead to many problems for companies in the form of fines and violations.
Data analytics provides real-time data visibility, which means that you can continuously monitor your company’s performance. These concepts are highly beneficial for businesses to take their operations to the next level. However, if you’re not using data analytics to your advantage, your company is likely to suffer in many ways, including being fined for breaking the law.
Consider a business that manufactures and sells products. Without data analytics in place, this company may produce more than the allowable limit of a certain chemical. If their products contain too much of this chemical, the company will be fined by the Environmental Protection Agency (EPA)
However, with data analytics in place, this manufacturer can quickly identify any potential issues with their product line and make the necessary adjustments before resulting in penalties. Here are some other benefits of implementing data analytics in your organization:
Segregation of Duties
With a better understanding of their operations, managers can analyze the segregation of duties at their company. This is a key part of ensuring that each department performs its duties without overlapping into another division’s responsibilities. Businesses can prevent internal fraud from occurring by segmenting these tasks and picking the best-fit personnel to work on them.
One of the best ways to check for SoD violations is to perform SoD testing. SoD testing is an IT audit that considers each employee’s responsibilities and assesses whether they are correctly segregated or not.
Data-Driven Decision Making
One of the greatest benefits of data analytics is that companies can make more informed decisions with reliable, real-time data. This can help businesses identify opportunities for increasing revenue, assigning tasks according to best fit, and promoting excelling employees. These types of decisions typically require a great deal of research – something that simply isn’t possible without access to quality data. Data analytics provides a clear insight into what your company should be doing by showing you where it’s succeeding (and failing).
In other cases, companies may implement data analytics because they want to ensure that no one within their organization has been stealing or committing any form of fraud. In such situations, managers should consider installing integrity checks in place. Integrity check software can monitor transactions and flag potential issues to know exactly where you need to focus your investigation efforts. For example, if someone tries to change the price of an item, this software can flag it as suspicious activity.
Data Quality Management
Even small mistakes in data entry can result in enormous losses. If someone accidentally enters $1 instead of $10 for all transactions, failure to do so will quickly throw your company’s financial situation off balance. To prevent this issue from occurring, businesses should implement an effective data quality management strategy. With this approach, managers can rest assured knowing that they won’t experience any problems with inaccurate or incomplete data across the board.
While using data analytics may seem like an overwhelming process, it always starts with one step at a time. Understanding how to use advanced technology like this is beneficial no matter what industry you work in or what position you hold. By taking the time to learn and apply data analytics in your business, you can avoid costly fines and violations.
One of the most important considerations for businesses regarding data analytics is GDPR compliance. The General Data Protection Regulation (GDPR) is a set of regulations that member states of the European Union must implement to protect digital data privacy. Any business that processes or stores the personal data of EU citizens must be compliant with GDPR.
Failure to comply with GDPR can result in hefty fines – up to 4% of a company’s global annual revenue or €20 million (whichever is greater), whichever is greater. To make sure your business is ready for GDPR, be sure to read our guide on how to become compliant.
Data analytics is a powerful tool that all businesses should be utilizing. By understanding how data is generated and what it can tell you about your company, you’re opening yourself up to a world of possibilities. With data analytics in place, you can avoid costly fines and violations, improve your segregation of duties, ensure the accuracy of your data, and much more.