How Small Businesses Can Use Data for Decision Making | Extraordinary Business
The ability to analyze and deploy business intelligence (BI) data is increasingly becoming a competitive differentiator in today’s marketplace. By 2018, most business users and analysts will have access to self-service BI tools, Gartner projects. Companies that use data are five times more likely to make decisions much faster than the competition, three times more likely to execute decisions as intended and twice as likely to have top-quartile financial performance, according to Bain & Company research. If you’re not using data, you may be falling behind your competition and losing out on opportunities to gain ground in your market. Here are some tips for effectively collecting, storing and deploying data in order to grow faster than your competition.
Deciding Which Data to Track
In order to use data effectively, you must first decide which data are relevant to your business decision making. To do this, identify data which can serve as key performance indicators (KPIs) marking progress toward your business goals. You can think of KPIs as measures of benchmarks that mark advancement toward your goals.
Your KPIs will vary with your industry, and even within your company, they can vary by department and within departments, says Amanda Thomas from Main Path Marketing. For instance, your marketing and sales department might track KPIs such as leads, conversion rates and average value per sale. Your accounting department might focus on different KPIs such as revenue, expenses and net cash flow. A customer service manager might track KPIs such as number of customer tickets handled per channel, average response time, and average number of contacts to reach a solution.
Review your business goals and identify your KPIs. For best results, try to identify a handful that are most important to your priority goals. Trying to focus on too many KPIs at once can become counterproductive.
Once you’ve determined which KPIs to track, the next step is setting up a tracking mechanism. A wide variety of analytics tools are available to track different types of KPIs, PC Magazine’s David Strom reports. For example, Google Analytics is geared toward tracking data related to your organic web traffic and online advertising campaigns. Microsoft Power BI provides a customized interface you can use to track KPI relevant to your company, including data imported from other tools such as Google Analytics as well as data you define yourself.
It’s important to store backup copies of your data so that you don’t lose all the valuable information you’ve collected due to a power outage, security breach or other crisis. Some analytics tools provide their own backup options. As a best practice, you should create three copies of your backup data, using two different media and storing one copy in a separate location than your premises. One way to do this is to create a secure online copy using a cloud backup service like Mozy. You can schedule your backups to run monthly, weekly, daily or at more frequent intervals.
Making Data-Based Decisions
The purpose of tracking KPI data is to enable you to make practical adjustments which bring your activity into better alignment with your business goals. For instance, if you’re tracking sales goals and your data shows that the number of leads you’re generating isn’t enough to meet your revenue goals, you know that you either need to generate more leads or you need to adjust a related variable such as your conversion rate or average revenue per sale.
To make it easier to use data for decisions, data should be presented to decision-makers in meaningful form by using reporting tools that come with most analytics software. Create a customized report format that displays the information your decision-makers need to know. Then implement a schedule for periodic report distribution, review and follow-up planning and action.
Rick Meekins is the Managing Consultant at Aepiphanni, the trusted advisor for business leaders who are seeking forward-thinking solutions to help them plan for and navigate through the challenges of business growth. Our entrepreneurial multidisciplinary team works with clients to develop differentiating solutions and provide direction focused on lasting, strategic results. We exist to help our clients CREATE | DESIGN | BUILD extraordinary businesses.
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