How Real Time Data Affects The Markets
When you’re in business the most valuable thing you can possess is information. The more complete that information, the better. In the early days of the Internet this used to mean watching email lists, and later it meant watching social media, hoping to be among the first to come across important information. Today it can mean following the online stock exchanges – but more significantly, today there is software available that can do this for you, sending you alerts in accordance with your instructions; however, how can you best make use of that information, and how can you expect the markets to change because of it being used by other people?
Traditionally, company losses have been analyzed monthly or quarterly, when accounts are published, but this can make it difficult to pinpoint the reasons they’re occurring. Has there been a consistent performance issue or have particular events impacted sales? Is there an issue with, for instance, slow sales at weekends, or are outgoings higher on particular days? Being able to tap into your sales data in real time makes it much easier to establish what’s going on so that you can take the necessary steps to deal with it.
Real time data and the markets
As well as having interesting influences on individual businesses, increasing ease of access to real time data has had some fascinating effects on the markets:
- Leveling the playing field – fast processing of real time data means that companies reliant on small trades can now complete enough of them at sufficient speed to compete with those making larger trades, making it easier for small companies to become established.
- Standardizing prices – in real estate, for instance, customer demand for real time access to property value estimates is undermining the tendency toward inflation out of proportion to the rest of the economy, causing prices to balance out and reducing a market risk factor.
- Humanizing market behavior – market research conducted using real time data enables companies – and whole sectors – to adapt quickly to changing customer behavior, so sectors like fashion and food are increasingly led by customer demand and are responsive to customer emotion.
- Globalizing trading – because, hypothetically at least, anyone can now access any stock exchange from anywhere in the world, companies now need real time data to make smart decisions about the best place to float their stock.
- Creating surges – when a lot of people act on real time data at once, the value of particular assets can rise and fall faster than ever. Though this potentially creates instability it also allows for a more flexible overall market response to political events.
Stocks and shares
Using real time data to monitor the performance of your stocks and shares enables you to get a more accurate picture of where the real value in your business and investments lies. It’s particularly valuable in large organizations where successes in one area can all too often occlude problems in others. This was the approach taken by Yusuf Alireza when he became CEO of Noble Group. It became clear to him that the corporation’s problems stemmed from having too many low-performing assets. By identifying and selling off those holdings that were no longer adequately competitive, he was able to resuscitate the struggling corporation and get it back on its feet.
While the Internet has made things easier for businesses in many ways, it has also precipitated new challenges. The speed with which sales can take place online, especially if an item suddenly becomes popular, can make it very difficult to manage your inventory and ensure that adequate stock is in place to meet demand. There is now some very good software out there for dealing with this but it’s still important to be in a position to monitor stock, cross check figures and make sure no mismatches occur. Real time data lets you assess the situation as soon as there’s a hiccup, reducing the chance of serious errors occurring and customers being unhappy as a result.
Keeping up with real time data used to be a serious headache, especially for people with otherwise busy lives and domestic commitments, which got in the way of focusing on business full time. Managing real time data using specialist software has been a great equalizer and is liable to have interesting knock-on effects on the shape of business to come.