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Data and analytics: the lifeblood of sustainable business

Published in Sustainability, Analytics

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February 28, 2024 · 4 min read time

Without data and analytics, steering a company’s operations towards a more sustainable course can be challenging. And sometimes data collection and the technologies behind analytics solutions can present their own sustainability challenges. Data scientists Esa Puttonen and Jukka Toivanen help Nitor's clients on their journey toward more sustainable business practices.

Companies turn their gaze to data and analytics services, especially when they aim to optimise business processes for maximum efficiency. This goal also aligns with sustainability, as the core idea of sustainable digital development is inherently included in analytics.

"There are several perspectives on the sustainability of data and analytics. The fact that a solution is useful to its user and has a long lifespan constitutes sustainable software development. On the other hand, more efficient utilisation of resources also helps, for example, to minimise unnecessary waste, saving both the environment and money," says Puttonen.

In an era of regulation, financial sanctions, and, for instance, emissions trading, money has become a natural metric: in business, sustainability also has a price tag. When optimising finances, factors related to sustainability become more visible. For example, optimising flight routes reduces fuel costs, as less fuel is needed overall.

"If a company wants to monitor the carbon dioxide emissions produced by its operational business, it needs to identify the factors that generate them. This allows for the collection of the right kind of data, which can then be used to examine processes and seek potential areas for optimisation," Toivanen advises.

In the current landscape of cloud computing, companies should also pay attention to their IT infrastructure. Moving from a data centre to the public cloud brings undeniable scaling benefits at a cost-effective price and with a smaller carbon footprint. However, the affordable cloud can also tempt more careless utilisation of resources.

"When a data pipeline collects and updates information every minute, it constantly consumes energy. If there's no intention to view reports at night, then they shouldn't be updated at night either. Especially with large amounts of data, significant cost savings can be made simply by considering when the information is needed," Toivanen continues.

An unused analytics solution is not sustainable

An analytics solution is rarely sustainable if it does not serve its purpose or remains unused within the company. Sustainability is also measured by the choices made by the solution's developers. The right metrics track how the mathematical model functions and what kind of value it provides to the customer.

"An analytics solution may utilise the latest algorithms and be technically very impressive, but if it doesn't produce the right outcomes, the time and resources spent on development are wasted. That's why functionality metrics should be set early on, and the solution's effectiveness should be regularly tested during the development phase. Developers must also be brave enough to cut their losses in time if the metrics indicate so," Puttonen explains.

Promoting overall sustainability also involves designing solutions to be as long-lasting as possible. An implementation strongly personified in one developer makes future development challenging. For the same reason, production should follow effective installation practices instead of non-repeatable tweaks. Otherwise, there's a risk of rapidly aging disposable solutions that do not meet the company's future needs.

In addition to technical implementation, it is important that the analytics tool is used and developed for the right need. If its use is forgotten after the initial enthusiasm and no business-enhancing benefit arises, the development of the solution has not been very sustainable.

"It's surprisingly common to create analytics solutions that ultimately nobody uses. This happens, for example, when the need is simply not perceived to be significant enough. And the more complex manual operations required from the user, the more likely the tool will remain unused," Toivanen notes.

In addition to good usability, careful piloting also reduces risks. Companies should ensure that the adoption of a new tool does not remain a project for only a few insiders. When the entire organisation is involved and committed, the tools are more likely to bring tangible value to the company.

Analytics supports the growing sustainability trend

Ecological, economic, and social sustainability will remain topical in the future. In addition to regulation, pressure for change arises from customers' value-based decision-making. Sometimes investing in sustainable business and products may serve as a differentiator for a company.

People are more interested in their consumption habits than before, and analytics can help guide better decisions. For example, recommendation algorithms in online stores are based, among other things, on the contents of customers' shopping baskets, aiming to offer, for example, suitable food items. This way, the purchase is more likely to be used instead of ending up in the bio-waste bin.

"Of course, the underlying idea is that accurate recommendations promote the creation of a good customer experience, which in turn enhances business. But the other aspect is precisely that by showcasing suitable products, a store can help guide its customers towards better, more sustainable choices," Toivanen explains.

Sustainability thus goes hand in hand with better business. With data and analytics, companies not only stay up to date and meet the EU's sustainability reporting needs. A data-driven organisation is fertile ground for new innovations and future-proof business.

Did you get curious about our analytics services? Read more to make data-driven decision-making the core of your operations.

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