Updated November 2022
Most small business owners keep on top of their numbers as they know it's the way to keep an eye on their current performance whilst also looking to the future for potential problems or opportunities that may lie ahead.
However, much of this number tracking is done in cumbersome spreadsheets that take a long time to update and are usually controlled by one or two people in an organisation. In most cases, these reports are updated only once a month in line with accountancy periods. This means in reality that the business leaders don't get to see the results of a month until halfway through the following month.
How can any business make decisions with data that is out of date?
As a result, many of these same business owners say they want better access to their numbers to make well-informed decisions using the full breadth of data available in the business and ultimately manage their business more effectively. In fact, according to IDC, 83% of CEOs want their companies to be more data-driven.
The response from within their business is that the rather large and complicated spreadsheet can be updated more often or adapted slightly to provide additional information. Neither of which are the right solutions.
“If I had asked people what they wanted, they would have said faster horses." Henry Ford
Updating your current spreadsheets more often, or making some slight changes are just like getting a faster horse. You need to reinvent the solution in order to get different results. If you want to keep up with the competition, you need to get a car.
1. Identify where your data is.
In order to start leveraging the power of your data, you need to know what data you have.
If you take a look at your business, you will realise that there is data everywhere:
I could go on.
By themselves these data sources are just information, they don't tell you a full picture of your what is happening within your organisation. Depending on your organisation you will put a different weight on how important each one of these is to your overall business strategy.
However, it is most likely that many of these data sources aren't living up to their full potential. In order to leverage the power that these data sources have you have to look at them collectively rather than in isolation.
If you're only looking at some parts of your data once a week, or once a month, then you're missing the ability to identify issues that need correcting or to spot the next opportunity.
2. Be visual
A key aspect of getting the most from your business data is through effective visualisation. How you display the data is one of the most important factors in interpreting and understanding it.
You might think that this is something that goes without saying if you have already looked at BI Tools. But yet, I have seen many examples of BI reports being used to only show grids of numbers. By nature, human beings are visual and can interpret data much better in a visual form than we can as a grid of numbers.
If you look at the image below, can you tell me which day had the lowest recorded sales?
Thursday, right? But how long did it take you to work that out?
Now look at the next image and tell me which day had the lowest recorded sales.
Did that take less time?
Both images contain the same number of data points, and the same information, but it is much easier to see when displayed visually.
The key here is to not just think that your data is available through a business intelligence tool and available to everyone whenever they want it but to think about how the data is displayed to enable everyone to see clearly what is happening in the data quickly and easily. The design of your data visualisation will determine the way your data is used.
3. Leverage data analytics tools
In the modern world, technological advances have meant that data analytics software is more accessible than ever to small business owners. This software isn't limited to the big corporations that can afford to spend millions on huge infrastructure and bespoke software. It's available to small businesses for a fraction of the price.
With all of this data in your business it's important to use the right tool for the job. Back to Henry Ford, a faster horse might get you there faster than your original horse, but you're still riding a horse. A car will let you take more luggage and more people in greater comfort without getting tired. Which do you want?
Consider as well that implementing a data analytics solution in your business could result in efficiencies that extend beyond reports that have all of your data consolidated into one place:
Increased data accuracy
In fact, a recent survey by the Business Application Research Center said that 90% of companies who had implemented a business intelligence data analytics solution in their business had made better business decisions as a result.
4. Head for the skies
'Cloud' continues to be one of the buzzwords around at the moment, especially as more people are working remotely than ever before, and the cloud is exactly where your data should be stored and accessed in order to fully take advantage of its potential.
Having your data analytics solution being cloud based can give you advantages such as:
No infrastructure capital expenditure
Automatic software updates
Access from anywhere
Greater security as data isn't kept on laptops or sent via email
All of this means that your data is more accessible to your business whilst maintaining your data security and keeping implementation costs to a minimum.
5. Enable self-service analytics
Getting the most from your data as a small business is also about sharing knowledge across your organisation. If you keep the ability to run reports or view the data to a limited number of people, then you're missing out on the ideas and analysis of the entire organisation.
Self-service analytics is more than just giving everyone access to the data, it's giving them the ability to interrogate the data, understand the data and to action the data without needing to ask for the numbers.
I have seen first-hand where a salesperson will ask the analyst, who controls the flow of data for a particular number, such as the sales so far this month. The analyst dutifully gives the salesperson the number they asked for. Everyone seems happy.
But the real question the salesperson wanted the answer to wasn't the question they asked. They weren't being obtuse and asking for the wrong thing, they just didn't know what question to ask because they didn't see the entire picture.
They didn't know whether the sales this month were good or bad, up or down, different or the same compared to other months. So they tend to come back and ask for more numbers to help ask the next question. All of this takes the time of two people to go back and forth digging into the questions and the data looking for the next answers.
In a world of self-service analytics, the salesperson can look for the answer to their initial question and have the ability to interrogate the data further answering other questions along the way. All without having to distract anyone else from their work.
This is not only more efficient from a personnel perspective, but it also encourages the salesperson to be more curious about the data and be prepared to ask more questions about the data to see what else they may find out.
The way for any small business to start realising the power of their data is to understand what their data can tell them.
Understanding what data is available is a good place to start, it's possible that not every data source available to your business is being fully utilised, to the detriment of the business.
Leveraging cloud based data analytics tools will give your entire business the ability to access all of the data at any time on any device, meaning that your team can interrogate the data when they need to, helping improve data based decision making within your organisation.
The car has been invented. If your business is still riding a horse, your horse is going to get tired and you're going to be left behind.
If you want to know more about how Sontai can help your business take advantage of its data, book a discovery call with us to find out more.