The importance of data in business isn't exactly a secret. Offering near-limitless potential for expanded insight and increased efficiencies, business intelligence is on an upswing for a reason. However, there's a difference between understanding the importance of using data in business and being able to apply BI principles in your own operations.
If you'd like to take your business in a data-driven direction, the right process is essential. These steps can help you embrace the principles of business intelligence in a focused, efficient way.
6 Steps To Becoming a Data-Driven Business
1. Embrace Technology
Technology is essential for virtually every company in the modern era, regardless of size or industry. As technological solutions continue to evolve, companies are able to collect data in more ways and from more sources, leading to a significantly larger pool from which to learn. Employing the right solutions, be it bookkeeping, website analytics, time tracking, or other opportunities, can put information right at your fingertips.
As you use more technology in the course of business, be sure your team members are prepared to fully participate. Even if some employees are reluctant to leave behind old, outdated ways of doing things, your organization's culture needs to shift toward an inclusive approach to data collection and use.
2. Develop a Strategy
Employing the tools to collect data is a good start, but a large pool of numbers and transactions can only tell you so much. In order to make the most out of data, it's important to have a strategy in place that can highlight what you're trying to achieve and which metrics can help you along the way.
Before you dive in, set a strategy based on corporate objectives. If, for example, you are hoping to increase sales by 20% over the next quarter, your plans should center on what is required to achieve this. By posing questions relevant to your overall goals – "how much marketing spend is required to increase awareness in a way that will boost sales?" – you will be better positioned to search for actionable answers.
3. Identify, Collect, and Verify Data
Once you've asked the questions relevant to your key business objectives, it's time to find solutions. First, you need to identify what kinds of data are most beneficial to your mission. If you're trying to increase sales, you may want to look at the effectiveness of marketing methods and trends in transactions. Data collection can differ greatly – transactional details can come from your bookkeeping process, while Google Analytics may be more beneficial for digital marketing – so be sure to explore all options available to you.
Before starting any kind of analysis, take time to ensure all numbers and metrics are correct. If necessary, you may need to consider other sources to ensure meaningful results.
4. Data Analysis and KPI Visualization
Once you have the numbers you need, it's time to put them to use. After ensuring your data is relevant, accurate, and thorough, you can determine what you'd like to explore, like marketing ROI or sales trends in specific product categories.
Analysis is easiest using business intelligence tools, like Power BI, Tableau, or Klipfolio, to categorize and present data in a less manual manner. Assuming your data is properly organized, generating graphs, charts, and dashboards can be managed in a few simple clicks, providing both high level and in-depth looks at your chosen metrics. The creation of visuals can be invaluable in the review process, offering a way to identify clear trends and highlight important information, even without a background in financial or data analysis.
5. Convert Insights into Action
Identifying and analyzing trends is a good start, but it means nothing if you can't apply what you have learned. Once you determine patterns, red flags, and business drivers, it's time to turn insights into action.
Instead of sitting on your new-found wealth of information, present and distribute reporting outlining your findings to organizational leadership. How you share information matters, so be sure the data you provide is organized and targeted toward the changes necessary to improve business outcomes.
6. Refine and Improve Practices
Data analysis doesn't stop after one discovery. Instead, utilization of data should be a part of every decision-making process. In many cases, this means continued study and education to refine practices, improve accuracy, and strengthen your skills. Becoming a data-driven business won't happen overnight, but the more effort you and your team put in, the easier it will be to optimize day to day operations in a beneficial way.
Taking the first steps into business intelligence may seem overwhelming, but the advantages are well worth it. From accounting analytics to sales statistics, there are plenty of ways to collect, aggregate, and apply meaningful information.
If you are considering a data-driven approach to your business, Enkel can help you move forward with confidence. Contact us today to learn more about our accounting and data analytics services.