Building a data-driven culture that can propel your business to the next level of success demands fresh thinking. The entrepreneurial “gut feel” that brought your original idea to life won’t give you the analytical insights you need to stay on a reliable path to growth and profitability. The high-stakes business decisions you’ll be called on to make in the future will depend a lot on the systems choices you make today. Here are three big ideas that can help.
1. The best analytics tools in the world won’t save you from bad data
Before we get into practical steps forward, it helps to look back at the data you’ve been collecting in the past and question a few assumptions. No matter what kind of business intelligence dashboard you end up creating, it won’t be able to rise above the quality and consistency of the data that resides in your current systems.
The best place to begin building a data-driven culture is to get clear on what your essential business goals are for the next five to ten years. When you can explain what success looks like for your company in simple terms, it will be much easier to identify the Key Performance Indicators (KPIs) that align best with your true purpose.
Too often, companies invest in costly analytics platforms only to find that compromised data makes it impossible to pull meaningful insights out of them. Whether the bad data resulted from tracking the wrong things or inconsistent collection practices, the outcome is the same. To borrow a home DVR analogy, you can’t “watch the movie” if you don’t press “record.”
2. Start small and build from there
To begin building a data-driven company culture, the best advice we can offer is to start small. Choose a manageable number of KPIs that are meaningful to you (basic revenue or margin information, for example) and make sure that you have a reliable method of capture in place to let you know where you are from day-to-day on those few essential metrics first.
A good place to start is with an IT inventory of the systems you’re running now and what kinds of data reside in each one. You might discover that information you need has been out of sight but actually sits within easy reach with a couple of simple procedural improvements. A thorough IT audit may also reveal that you have enough business intelligence or dashboard functionality available in software that you already own to get started and build as you go.
3. Don’t try to go it alone
The point of all this is not to amass data for data’s sake. It’s to extract increasingly valuable insights you can use to make effective business decisions. Once you have clarity on your company goals and a starter set of meaningful KPIs you can build on, you’re going to want trustworthy advice on how to scale your analytics capabilities along with your business.
Look around your professional network for an unbiased third party that not only has analytics expertise, but also understands how you operate. Whether it’s a CPA, an M&A attorney, or a banker, seek advice from someone who won’t press you to adopt generic metrics that aren’t relevant to your business purpose. The right advisor will help you ask the right questions and define the right problems to get where you need to go.
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Clayton & McKervey has deep internal and partner expertise in ERP tools, analytics, and dashboard configuration for clients in manufacturing & distribution, industrial automation, and architecture and engineering. We can help you identify the key drivers of your business and recommend resources and strategies to track them with high reliability and low friction. Contact us to explore options for building a data-driven culture that fits your business model.