Benefits of a data-driven approach to your business (part 1)
Although there is much to be gained by a data-driven approach in business, not every company is unlocking the full potential of their data as of yet. In this blogpost series, we take a look at some of the benefits that accompany data-driven solutions. To illustrate these benefits, examples are provided of customer cases. To kick off, this blog is all about cost reduction.
An excellent example of a data-driven solution to bring about cost reduction was implemented at one of our customers, a full-service credit management agency. One of their main activities is pursuing collection of outstanding money from debtors. Bailiff’s offices are hired to notify debtors about the current status of their debt – for example summoning them to appear in court – by delivering documents to their home addresses. It is crucial that these documents are delivered on time, because late delivery results in additional costs. Moreover, efficient document delivery in terms of quantity and time is desirable as well for obvious reasons. All in all, there are many cost drivers involved in this process. It was our task to come up with an easy, time-effective, and scalable solution that could minimize these costs.
Before, it was common practice to divide documents based on their ZIP code area and construct routes once there were enough documents to deliver in one area. This approach disregarded for the most part the costs for late delivery. To tackle this problem, we combined data from all bailiff’s offices involved and did not restrict ourselves to generating routes within one ZIP code area. Furthermore, we incorporated the importance of on-time delivery into our model leading to substantially lower costs. Implementing this solution in their business ultimately led to a reduction in overall costs of nearly 65%.
For another customer, we built a demand forecasting tool to gain better insights into the market and the quantities of goods to purchase. This company is one of the largest import and export organizations in the food sector. They source a wide range of high-quality meat and poultry for the European domestic market from regions all over the world. For many of their products they noticed strong fluctuations in demand over the year, which was hard to predict solely by using experience. After gathering massive amounts of order data and using different tools and methods, we came up with a demand forecasting solution that predicts demand based on a variety of factors such as product specifications, weather, and time components. A more accurate prediction of demand leads to less excess stock and fewer lost sales, both resulting in lower costs.
In both examples mentioned above, as well as in many of our other customers’ cases, there are processes that could be optimized by using data to go along with experience and gut feeling. Most of the time, enough data is gathered but not put to best use due to a lack of knowledge, tooling, or resources in a broader sense. No matter the industry, data can add significant value to your business.
Is your organization getting the most of its data? Contact Notilyze now to learn how a data driven approach can significantly improve decision making across your organization.