4 Ways a Data Analytics Program is Good for Your Business
By Todd Esh, Director of Business Development
BUCSanalytics is frequently approached by small and mid-sized companies (SMBs) with questions about data and data analytics. The two most common questions that are asked are usually around how a data analytics program can help their business and of course, the cost of such a program.
The short answers to those two questions are that a data analytics solution can provide the same (and more) opportunities for SMBs as it can for the large Fortune 100 companies. Additionally, the budget necessary is (or can be) significantly less than the cost of hiring a data analyst. The return on that investment will significantly outweigh the expense of such a program. Let’s dive deeper into how a data analytics program can help SMBs.
Helping Define a Good Customer
Data helps a company answer the question, “what is a good customer?” by allowing the business to gain a complete picture of that customer. The best customer isn’t always the one that buys the most product. Data allows you to take a 360-degree view of your customers. How long do they take to pay their invoices? How long do you have to keep raw materials on hand for that customer? For every dollar you invest in that customer, how much cash does your business drive and what is the length of time between investment to receipt? These are just some of the questions that data can help you answer quickly. With these questions answered, your team will have a better understanding of what constitutes a good customer allowing everyone to proactively make decisions accordingly.
Data analytics is constantly used to maximize business processes within everyday operations. Within any business process, data is generated and that data can be used to provide insights to make improvements and generate more efficient processes. Some examples where we have helped companies gather and analyze data include production lines for manufacturing companies, sensors on vehicles for logistics companies and inventory management for distributors. Technology allows machines, vehicles, tools and just about everything else to be connected and to constantly report data. Analyzing this data guides operational improvement.
Supply Chain Management
Supply chain management is another area where a data analytics program will improve performance. Suppliers, production, logistics and procurement data is collected, analyzed, leveraged, and reported for the optimization of supply chain efficiency. As mentioned previously, analyzing customer data helps a business define a good customer. Customer data can also help a business better predict future demand. What products should be maximized due to demand? What products should be maximized due to profitability? What products are less profitable or negatively impact the supply chain? These are just some of the questions a data analytics program will help answer and allow the supply chain to operate efficiently.
Improving Financial Performance
The ultimate goal of any data analytics program should be to have positive effects on customer service and financial performance in order to maximize the company’s value. If a data analytics program is not tied back to the service and financial performance, companies face the risk of making misguided decisions. Many companies make the mistake of waiting until they need a loan or until they want to sell their business before attempting to maximize value. Having a data analytics program that is tied to performance will ensure that a company is maximizing its potential value. Too many data analytics programs and tools miss this important step.
Analytics, Business Intelligence (BI) and Robotic Process Automation (RPA) tools continue to radically improve and are a valuable resource to an organization, big or small. But to optimize these tools, you need to start by making sure you can aggregate data from any corner of your organization in an accurate and timely manner and be able to leverage it when needed. The amount of data a company generates and can gather continues to expand. This data is related to customers, logistics, operational processes, supply chain, service levels, projects and all other activities performed in your business. By connecting to this data and transforming it into powerful information, you will be able to free up time and resources to act on those insights and make faster, more confident decisions.
Remember, a data analytics program is not about having unlimited amounts of data or information. A data analytics program is about providing high-quality ACTIONABLE INSIGHTS to the right person at the right time. It is about knowing the right questions to ask and providing timely answers to make your business better. SMBs have the opportunity to turn data into a key asset. Put your data to work for you, today!