While a looming recession is always a good time to review where you can save money, it makes good business sense to harness the power of your data to improve your bottom line.
Whether it's by eliminating unnecessary costs, optimising operations to improve productivity, or making smarter decisions that give you a market leg up while others stumble along in the dark, your data is key. But only if you can access it.
Data silos remain the curse of many organisations who struggle to bridge the gaps between their legacy start-up software and the cloud. And once you do have unfettered access, what then?
In this article, we suggest three specific ways you can use analytics and reporting to improve your financial outcomes, regardless of external economic conditions.
1. Get all your data ducks in a row
You have two options when it comes to your data. You can settle for using what you have at hand and supplement it with guesswork and tedious, error-prone manual updates on spreadsheets. And hope for the best.
Or, you can do it properly and become a data-driven organisation with a formalised data strategy. What's data-driven, you ask? Data management educator Dataversity describes it as "a business state where data is used to power decision-making and other related activities efficiently, in real-time. For a business, reaching the data-driven state is like the difference between driving an automobile and travelling by horse."
When you are data-driven, you open the doors between your data siloes and work with everything, in real-time, right across the business. (Don't worry, you can implement robust data governance protocols – accessible definitely doesn't mean free-for-all!)
If this all sounds like spending money when we're promising to help you save or make more money, then you're right. But there's no way around it. However, making an investment in accessing your data now will pay dividends for years to come. It's like taking the leap and buying that expensive Tesla. You may go 'ouch' when you first pay for it, but you'll feel smug later on when you see the rest of the world paying $10 a litre for petrol or dusting off their horses.
However, there are some hard yards to be done first to overcome a legacy of disconnected datasets and analytical silos, and a historical lack of decision-making agility. And as importantly, some practical strategic decisions need to be made about what you want to achieve and why, how you're going to do it, and by when, so you achieve a true ROI from your newly liberated data.
2. Make more money by identifying new opportunities
Most businesses make more money by capitalising on new opportunities or improving existing ones.
For example, you can take the lead with a new or improved service or product that wins hearts and market share. Or you can invest in improving the lifetime value of your customers by offering better service and support. Obviously, a happier customer stays with you longer, and over the course of the business relationship, will spend more.
This is where data comes to the fore. By integrating all your data, you have visibility of new opportunities. You can see what you do and don't have in place, and what's underutilised – be it plant, human resources, or materials. You gain a 360-degree view of your customers – what they buy, how much they spend, and how often. You can use that new knowledge to market to your customers as individuals, with heavy personalisation that extends well beyond just adding their name to an email.
If you've been taking a shotgun approach to marketing (aiming at many, but only hitting a few), a 360-degree view will enable you to precisely target your customers with relevant messaging and upsell or cross-sell offers, increasing sales as well as deepening the relationship.
3. Save more money by optimising processes
A dollar saved is a dollar earned, right? But it's only by prioritising your data activities that you make true savings. A lofty strategy looks great on paper, but practicality and pragmatism must come first. Identify the burning issues (the ones that will make a measurable difference to your business success) and work on those before anything else.
Hint: Assign each activity a value from 1-10 so the most important ones naturally rank highest, no matter what other distractions are thrown into the mix, and then evaluate the return on investment for each.
As well as helping you discover more opportunities to increase revenue, you can connect data from different sources within the business to improve profitability. In some cases, your data allows you to identify and remove redundant processes altogether. You can also join processes that have a high commonality to share resources and drive down costs, for example, streamlining freight when there is a common route and timeline – rather than making expensive one-off deliveries.
Then, there's optimising your supply chain so you can use the just-in-time approach to carrying the right amount of stock, rather than paying for it to languish and even perish in your warehouse.
If you are in the healthcare sector, your processes probably demand collecting data from patients as they move from department to department. And due to a lack of connected data in the organisation, it's often the same data repeated time and time again, to the frustration of both the busy healthcare workers and clinicians and their fed-up patients.
Duplication of the data collection process not only takes up expensive resource time, but unless it's all going into the same place and overwrites of existing data can be queried, it allows mistakes to enter patient records.
By identifying which service and support processes can be streamlined, you can not only save, but improve. Automation and sentiment analysis are just two ways to speed up and prioritise service queues to deliver the sort of customer support that gets raved about.
Now is a good time to be data wise
It's no longer good enough to try and run a business without the reporting and analytics power of integrated data. Especially if you want to grow, change, improve or just do better business. Making decisions with data from only your ERP for example, is short-sighted, especially if you have your eye on the long game.
Likewise, your data maturity, data vision, and data governance are critical to how you can move off the starting blocks. In many ways, it's baby steps. Without the building blocks in place to enable a sound foundation, you can't start to automate processes and save. Or even worse, you can automate everything without understanding the consequences.
But once you start using your data to its full potential with purpose, you can simplify your processes, making your business easier to deal with, building customer loyalty, attracting new business, and eliminating those extra costs.
If you'd like to discuss how to get practical benefits from connecting your data, contact us here.
