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The opinions expressed by Entrepreneur contributors are their own.
The Parable of the Blind Man and the Elephant tells the story of six blind men who encounter an elephant for the first time. They each inspect a different part of the elephant. trunk. Ear. Fang…you get the point.
As a result, different people come to very different conclusions about what an elephant is.
They’re all partially right, but sometimes they’re completely wrong.
The moral of this story is simple. Differences in perspective and incomplete information can lead to different and often inaccurate interpretations. It’s a long time ago. However, this is a fable that we should pay close attention to today. This is especially true when dealing with data.
Related: Using data analytics will transform your business. Here’s how:
Less is (almost) always more
Business leaders around the world want to use data to make better decisions and gain more accurate business insights.
But companies often have multiple layers in their technology stack. Some are new. Some are old. Some are integrated. Some are completely siled. Each of these layers captures different data. And if these parts don’t talk to each other, you’ll get inaccurate insights.
Businesses now have access to more data than ever before. But quantity is not the same as quality.
In many organizations, the actual quality of data is declining. Having so many different elements within the technology stack creates misaligned incentives. One side of the stack might tell you one thing, but the next part might contradict it. This is often seen in advertising technology. Countless different buying platforms, data partners, publishers, analytics tools, CRMs, segmentation tools, etc. They often become so cluttered over time that it becomes difficult to obtain the actionable data needed to generate insights, actions, and business impact.
Having access to more datasets does not mean better data. Viewing datasets in silos tends to paint the wrong picture and increases the likelihood of bad decisions being made.
Data is interesting, but you need to be able to view it in one place. So I think we need to implement the principle of vertical integration here.
vertical thinking
Vertical integration is a strategy that allows companies to streamline operations by taking direct ownership of processes. In other words, it allows you to control your own destiny. In theory, this would allow companies to increase efficiency, reduce costs, and gain more control over their manufacturing and distribution processes. Tesla is a famous example of this model in action.
Tesla introduced vertical integration across its business structure, focusing on two key aspects: battery production and energy storage. Tesla knows that batteries are critical to EVs, and success depends on owning his chain of competitive battery supplies. The company has enabled Tesla to leverage its battery technology expertise and apply it to the energy storage market, creating synergies and shared resources across various product lines.
We do everything from designing cars, building technology, and manufacturing our own chips to selling cars. Everything is done in-house, so your work isn’t slowed down by supply chain issues or manufacturing partners. This combination has enabled the company to expand its business, drive technological advances and position itself as a leader in sustainable transportation and energy solutions.
Data ownership works similarly. But you don’t need to build a huge multi-billion dollar factory in Nevada.
By managing your technology stack and ownership of your information, you can gain a more holistic view of what’s happening in your business. It also isolates you from the problems of the outside world.
This in itself is invaluable. However, this singular view becomes even more powerful when considering the rapid growth of AI and ML technologies. When applied to vertically integrated datasets, these tools can transform your business and unlock previously unknowable insights.
Essentially, if your data is disparate and not well integrated, you won’t be able to get to the “unknown unknowns” – things you didn’t even know to ask. There are patterns that are invisible to the human eye. These can only be confirmed with proper data.
Further insight. Further efficiency. More control. Vertical integration gives companies control over their supply chains. However, there are also challenges. Even if you are not building a large factory, you will need investment and support to make the necessary changes. And most importantly, independence should not mean becoming narrow-minded and blind to developments outside of your business.
Related: 8 ways data analytics can revolutionize your business
data and elephant
Looking at different data sets in isolation can give rise to the wrong idea about the elephant: what your business actually is.
You may be partially right, but you may also be completely wrong.
Vertical integration gives leaders a complete view of their business, from customers to creatives, hooves to tusks.
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