Technology and data are becoming increasingly complex, with businesses using a plethora of software applications and storage methods, creating a number of disparate data sources. While data was originally processed sequentially, such as with punched cards and magnetic tape, the movement to randomized storage in the 1980s created an increasing need for methods for collecting, organizing, and interpreting data. Data management became the industry process to fill this need.

While methods of data management differ, the outcome is similar: using data management, data from any number of sources and data types are collected into a single place where they can be securely stored, organized, and processed into usable business information.

Besides accessing information more easily, there are several reasons why data management is important.

6 Reasons Data Management is Important

Most companies recognize a need for data management for simple organization purposes. However, the importance of data management goes far beyond being able to find information when you need it. Here are some of the top reasons to implement a data management system:

1. Improves Productivity

One of the biggest benefits of data management for companies is increasing business productivity. Without an effective method for data management, the data collection and organization process is typically manual. For companies that use multiple software applications, computers, storage devices, and methods of data production, this can be a huge undertaking. The alternative of not collecting or using data at all can also be unproductive, leading to inefficient business decisions or systems that are not backed by data and analytics.

Data management automates the data collection process, removing the manual time it would otherwise take to collect and organize data. It also organizes this data into a format that can be used to produce actionable information for more data-backed business decisions and processes.

2. Reduces Error

Another important feature of data management is the reduction in reporting errors. With manual data collection and processing, it is easy for information to go missing, be skipped over, or even be entered multiple times. Data management refines the process of data collection and organization, illuminating or resolving these errors for more accurate reporting.

3. Strengthens Operational Efficiency

Data management is also important because it provides the data to create more efficient operations. By collecting and organizing data from several otherwise disconnected sources, companies are able to gain insights that would likely otherwise miss. This is also one the biggest ways data management can be monetized–through the data-backed improvements that help to increase efficiency, performance, and profitability.

4. Minimizes Data Loss

Another reason for data management is to minimize data loss. Because data management automates the data collection and storage processes, it’s much more difficult for data to fall through the cracks than if the data were being collected and stored manually.

5. Improves Security

One of the purposes of data management is to store data–securely. A good data management process will have several security measures in place to protect the data from outside threats. In addition, these security processes may include a backup and disaster recovery process so that if a disaster does strike, the data can be restored quickly, helping to minimize downtime and reduce lost information.

6. Increases Business Intelligence

Finally, the biggest reason data management is important is because it increases business intelligence. Business intelligence includes the actionable business insights that come from combining and interpreting business data. By having a strong data management plan in place, you are able to power significant business intelligence efforts, providing insights, analytics, and analysis that you would otherwise have difficulty accessing.

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