A Case for Real-Time Data Analytics
In this article, we will examine the value of real-time data analytics for broker-dealers, including what it is, why it matters, and its vital role in business intelligence and data-driven decision-making. In short, real-time data analytics provides businesses the insights required to make better decisions quickly. Before we dig into this further, let’s set the stage by briefly looking at two different studies.
As you’ve probably heard (and experienced firsthand), the COVID-19 pandemic significantly accelerated the adoption of technology. A multitude of studies and reports concluded what we already intuitively knew — that the speed at which we adopted digital technologies was increased by several years. A study from McKinsey found that in North America, the pandemic accelerated the average rate of technology adoption by six years. See chart below.
This uptick in technology adoption is reminiscent of another study on technology adoption published a few years ago by Harvard Business School that illustrates a significant performance gap between digital leaders (i.e., digitally transformed companies) and digital laggards, “effectively creating a ‘digital divide’ across companies. While many are benefitting from the new range of capabilities and opportunities created by digitization, others appear to be falling behind.” Their research shows that digital leaders see a 55% gross margin, whereas digital laggards experience a 37% gross margin. Although this study and its conclusions were published prior to the pandemic, its importance to C-suite executives is more relevant than ever. The authors assert that digital leaders are 2.5x more likely to harness real-time data analytics than digital laggards.
Real-Time Data Analytics Explained
What does real-time data analytics even mean? And why does it matter? Let’s start by defining what is meant by real-time data analytics. According to Gartner, “real-time analytics is the discipline that applies logic and mathematics to data to provide insights for making better decisions quickly.” In a practical sense, this means that data can be processed and analyzed immediately. It means having access to business reports that are automatically updated with the most current data available.
The answer to the second question, “why does it matter,” is more straightforward: real-time data analytics enables you to make real-time decisions. There are numerous advantages to having these capabilities. However, let’s look at two primary areas of real-time data analytics that help broker-dealers see the big picture and increase profits: business intelligence and data-driven decision-making.
Real-time data analytics is critical for business intelligence and effective management in today’s post-pandemic world. Using real-time data analytics in your report suite will help you achieve a solid understanding of the key drivers for your organization, such as referrals, the sales pipeline, and sales trends, and how those drivers are changing for better or worse. Managers need access to up-to-date sales numbers, giving them the insights required to manage sales performance and reach optimal productivity. Real-time data analytics can help managers coach advisors and implement corrective strategies in a timely fashion.
The pandemic has necessitated that companies increase the frequency of their forecasting efforts. That requires real-time data analytics that can be integrated into big-picture forecasts accurately. Using real-time analytics allows you to stay up-to-date with the latest trends and benchmarks, which helps your firm make data-driven decisions. Data-driven decision-making not only enables you to set accurate quotas and forecasts, but also supports your business strategy and leads your team to achieve their objectives. Real-time data analytics will help you make informed data-driven business decisions faster, earlier, and with confidence.
It would be putting it mildly to say that the COVID-19 pandemic has caused a tremendous amount of technology disruption in the workplace. Initially, the focus was adapting to the virtual workplace, which required a full-scale implementation and adoption of video and collaboration tools like Zoom, Teams, and Slack. But even today, businesses are still experiencing turmoil throughout the entire institution. These cascading effects require firms to continually adapt to the significant challenges introduced by the shifting industry landscape. Real-time data analytics is an essential tool across today’s business landscape. Your firm must make a comprehensive and strategic investment in digital technology. To be a digital leader, managers need to not only embrace technology but need to fight for continuous improvement. Which side of the digital divide is your firm?