Over the past few years, we’ve regularly heard this analogy: “Data is the new oil.” While I don’t disagree that data is an incredibly valuable commodity to business, I believe there is a more accurate analogy: Data is the lifeblood of business.
There are striking parallels between corporate data and human blood: Just as blood is essential for the survival and functioning of the human body, data has become the lifeblood of modern business, enabling survival, growth, and the ability to thrive in a fast-paced, brutally competitive economic climate.
I’ll be exploring these parallels, as well as how to maintain quality, healthy data, in a two-part analysis. In this first installment, I will explain how and why business data is as important as blood to the body.
Moving Information From One Function to Another
The human body is made up of a skeletal structure, supported by muscle fiber, tendons, and ligaments that protect its vital internal organs. For a business, the network infrastructure, and its cybersecurity systems, whether software or hardware-based, support and protect the systems that are required for operations: enterprise resource planning (ERP), customer relationship management (CRM), HR tech, finance tech, and many others.
In the human body, blood delivers oxygen and nutrients to cells, removes waste products, fights infections, and transmits hormones.
Similarly, data flows through an organization carrying valuable information from one business function to another. It provides insights, informs decision-making, optimizes operations, drives innovation, and forecasts future trends.
Despite the similarities, there is one stark contrast between the human body and the systems of a business.
Unlike the remarkably efficient human body, business data doesn’t have a pre-defined structure. Without doubt, there are best practices for building architectures that supply actionable data to the various departments and functions in a business. However, those best practices are often left to interpretation, and they’re heavily dependent on the knowledge of those administering the data.
Identifying Threats, Opportunities, and Problems
Blood acts as a communication network within the body, transmitting signals and vital information from one organ to another. For example, when your body is threatened by an infection, your blood sends white cells to fight it off.
This is similar to data in an organization, which serves as a means of communication and signaling. Data helps to identify threats (like competitors or market changes), opportunities (like new markets or products), and problems (like operational inefficiencies or customer dissatisfaction). By monitoring signals emanating from their data, businesses can respond appropriately, just as the body does to threats of disease or injury.
Building Adaptability and Providing Performance Indicators
The human body learns and adapts based on the signals received through the blood. For instance, if an individual begins a new fitness regimen, the body will adjust to the increased demand for oxygen and nutrients, prompting changes like increased heart rate or accelerated muscle development.
Likewise, data enables a business to adapt and learn. By analyzing data, businesses can understand consumer behavior, market trends, and internal performance, and adjust their strategies accordingly. This continuous cycle of learning and adaptation is critical for both a healthy body and a thriving business.
Just as a doctor analyzes a patient’s blood to assess their health, businesses analyze data to evaluate their performance and vitality. In healthcare, blood tests can reveal underlying diseases, nutritional deficiencies, and overall health status. Similarly, businesses use data analytics to detect issues and diagnose “health” — assessing performance, identifying bottlenecks, predicting future challenges, and uncovering opportunities for growth. In essence, both blood and data serve as vital indicators of health.
Data is the lifeblood of today’s businesses, as necessary as blood for the human body. Both are vital for survival, functioning, learning, and adaptation. They carry crucial information, signal potential threats or opportunities, and serve as key health indicators. Recognizing this parallel can help businesses understand the critical importance of data and the need for proper management. In the same way that maintaining healthy blood is crucial for our well-being, maintaining a healthy flow of data is crucial for business vitality and success.
In the next installment of this two-part series, I will be digging into the effects of bad data on a business, and explaining how to maintain data quality and flow for business success.