There is no shortage of data in the world. Some is free, some is expensive, some is outdated, some is skewed, some requires top government agencies to steal and/or to protect it, some can make you rich, some can make you depressed, and some can provide or destroy hope. Data is EXTREMELY powerful. I’m sure you’ve all heard the expression “He who controls information controls the world.” Don’t get your hopes up – this short article is not to provide the secrets of world domination. However, it is set out to help your business get on the right track towards industry, market, efficiency, and productivity domination.
What type of data would you like to know in regards to your business? If you knew ‘A’ about your competition, could you achieve ‘B’? If you knew the decision-making logic or purchasing patterns of your customers, could you better position your company to serve their needs? If you could track details about your employee productivity, would it help you to improve your profits through process enhancements? If you were able to increase or decrease N, would your business be more successful?
If you are an established business (not a start-up) and have not been tracking or collecting this desired information, I have one very important question for you: What is driving your business decisions? What has driven you to hire more employees, layoff staff, raise or lower your prices, expand or reduce your service or product offering, invest in new technology, change locations, work more hours, or outsource certain tasks? If you just responded with “Good Question,” “My gut,” “It wasn’t working so we tried something new,” or “I’m not sure” then I have two things to say.
- It’s OK. You are not alone as most people are running their lives and businesses in this same way.
- Are you ready to start using data to help drive these decisions?
If you answered yes to #2 then keep reading. If you answered no, I recommend you also keep reading as your mind might change. Let’s explore some possible reasons behind this type of behavior that so many fall victim to.
When a business is first starting up, many owners frankly are “winging it.” This isn’t necessarily a bad thing as there may not be data available that is 100% applicable to this new business. Perhaps the product or service is new or the market hasn’t seen it before. It might be possible to gather some data, but at a point educated and logical guesses or assumptions have to be made. At this stage it’s important to keep a pulse on results and remain flexible when reality strikes. I strongly feel this is the reason many companies go under within their first year. They have a business plan that defines a clear path from A – Z for a fixed time period and often times with a fixed budget. What if F doesn’t happen like you planned? Are you flexible enough to react to get back on track to G or H with reasonable loss of time or money? Many are not prepared or tracking progress close enough to react and often times a relatively small wrong turn or bump in the road can shred such a fixed plan.
So, getting back to the startup business…these “guesses” that drive business decisions are somewhat unavoidable in the beginning as we’ve just determined. However, how long does this strategy last? At what point does a company stop guessing and reacting and start proactively planning based on real data? Well, ideally sooner than later but there is a critical step that is required for this to occur. THEY NEED TO SETUP THE SYSTEM TO COLLECT AND REPORT ON THIS DATA. Most businesses completely skip this step and continue to make guesses “startup style” for the remainder of their business’ existence. Can’t you just use financial numbers? Can’t you just use sales numbers? Can’t you just use customer satisfaction scores? Well, this data is also important to the business-decision process but only tells a part of the story. Let’s consider the following example of how baseline data although critical cannot alone drive educated business decisions.
Think of a professional baseball team. Let’s say that there is no ESPN or other statistical resource tracking specific data for us (since in the case of our businesses we are on our own). Instead, all we have is the standard Win/Loss record, total fan attendance, and individual player stats to base our management decisions on. At the end of a season, we need to make some big decisions: there are players up for free agency, others looking for contract extensions, we are considering some stadium enhancements, should we keep our coaching staff tact, what players should we try to trade, what type of positions do we need to fill, etc. (as a business owner, we face similar decisions)? Now, we won half of our games which was a ten-game improvement over last year, but attendance was down by an average of 20% per game, and we had the league MVP on our team with amazing stats but the other players were below league average stats-wise. So, do you think we’re ready to make our business decisions now?
If you said yes, please contact me as I want to offer you a job. For the rest of us, we’d probably say something like “we need more data.” In this example it might seem more obvious. Let’s say we didn’t have any more hard data but we did watch every game, spend time in the locker room, and feel pretty good in our gut what types of decisions we need to make. Feel better? This might give you more confidence but are you really more prepared? Most people feel they are prepared with this type of daily exposure to the business. However, let’s evaluate some key components.
Why was attendance down even though our record was improved? If I was setting up a reporting system for attendance I would want to track attendance based on days of week, opposing teams, who was playing or pitching, weather conditions, division standings, national holidays, local event schedule, our Win/Loss record and games within playoff contention at various points in the season, and much more. Why is this type of detailed information important? Well, a pure number like attendance is only as good to me as this other relative data. The entire picture needs to be painted to really come up with data that can be used to determine our lack of success at the box office.
What about the decision to keep players, the coach, etc.? Are stats enough? Maybe in fantasy baseball they are enough but the actual game of Major League Baseball is not that simple. I assume your business isn’t that simple either. Don’t assume that because you’re not running a million or billion dollar business that your gut is good enough. It’s not – you need detailed and accurate data to make strong business decisions just like the management of a baseball team needs data. Do you know that large companies were small at some point? If there is one thing I cannot stand hearing from business owners it’s “We’re just a small company.” Years ago I had a boss that said this constantly – usually right after he was approached with an innovative and scalable way to improve a process. What is the logic behind this statement? Good business is good business regardless of the company’s size.
We’ve talked about how guesses continue to be made for years after a company is in business. The reason is that steps are not made to collect and report on the specific data that would be crucial for business decision making. However, the great thing about this major problem is that it’s never too late to start making better decisions.
Where do I start?
First, figure out what information you would ideally like to know. There is a chance that some of the data you identify cannot be obtained through a web-based reporting system but it’s a good place to start. This will help you and your web consultant identify the types of data you are seeking and from there you might be able to identify alternatives. Once the targeted data is identified, it’s now time to figure out how and when data entry, capture, and extraction should occur in your process. Perhaps there is already data available inside of an existing system? It’s possible that at this time a new step or process should established to help with data capture.
If you are working with a website consultant or web-systems specialist, remember that most of the time a solution should be specific to your exact needs. Be cautious of a quick recommendation for an off-the-shelf application as it might not provide you with the specific information you are seeking.
After the data identification and capture stage – Reporting
Now that you’ve identified and are capturing this data the next step is just as important – review it. I know, it sounds like a basic and obvious step but I would venture to guess that most reporting capabilities of online systems rarely get used. Maybe the management or business owners have never been shown how to properly access and review it? Maybe they are just “too busy” and procrastinate the task? Or is it possible that even if they had the data, they wouldn’t be sure on how to use it to improve their business? Whatever the reason, don’t let your data compile without review and appropriate action. If you don’t have time, find a staff member or third-party individual to help you. If you aren’t sure on how to properly access the data, schedule a 30-60 minute training session to figure it out – take notes or record the session if need be. If you are not sure what to do with the data, lean on a process specialist or your trusted business consultant to help you analyze it and come up with some possible business-enhancing solutions. Regardless of your situation, make the most of this data.
One more note on reporting – KISS (keep it simple Stupid!). How many reports do you need to see? How many options do you really need to access regularly? If you are the type of individual that gets slowed down by options (if it takes you 10 minutes to order ice cream at Baskin Robbins the answer is yes) be sure to go with a solution that can get you right to the data you’re seeking. You can always setup a custom reporting page for Ad Hoc reports in the case that a non-standard view is needed at some point. However, if possible configure some quick-hitting views and queries that get you or your staff the data quickly and easily.
What are the benefits of a web-based data capture & reporting system?
There are many major advantages of utilizing a software application to capture and provide reporting for specific data critical to your business. Having one that is web-based provides additional advantages. The major one is simply anytime/anywhere access to the system. By allowing staff to enter the data from any device with Internet access, it will help keep data updated and accurate. Having this data available for management to pull reports day or night, in the office or on the road can be crucial to a project or sales process. Here are some other advantages to a “Cloud” application.
- Maybe you want a report to be compiled and emailed to you at certain time intervals? Most web-based systems have this sort of functionality as a standard option.
- Perhaps your business could truly benefit from this system sharing data with another web-based system (more difficult to accomplish with a local client or local server application)?
- What if your system requires an upgrade or maintenance? If it is a web-based system, it can be accessed from anywhere without the need for additional remote-connection software.
Whether you are running a professional baseball team or a pest control company, you need the right data to help drive logical business decisions. Your staff is already doing the work, and your customers are providing you with opportunities to gather this data for future improvements. Don’t waste any more time listening to your gut – it’s not as accurate as you might think.