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Data is what provides the information you need to understand your company’s footing in the marketplace and identify opportunities to increase revenue and optimize expenses, both of which will support the growing valuations of your venture over the years.
But to get there, you need to know where to find the data and how to capture, organize and interpret it to power your decision-making processes.
Let’s look at how data awareness helps you build a scalable enterprise, pull the data together and leverage it to drive strategic decisions that lead to growth.
Related: Eight Ways Data Analytics Can Revolutionize Your Business
1. Building a scalable enterprise
What creates enterprise value is not merely profit. If you’re looking for investors, partners or bank financing, those parties aren’t just interested in the fact that you may be generating surplus revenue. They want to know you’re capable of and positioned for growth.
A common truism in life is, “if you’re not moving forward, you’re falling behind.” While trite, there’s truth to it for business owners. If you’re only maintaining the status quo, there’s a strong perceived implication that you’ll likely lose your competitive advantage over time. That softening of your position in the marketplace will erode your value going forward, and investors and other stakeholders will recognize the fact.
The relevant example here is the adoption of technology. Depending on your industry, you may get by for some time without incorporating emerging technologies that offer the potential to operate more efficiently by reducing operational expenses, strengthening relationships with clients and generating more sales.
However, most of your competitors will embrace tech, allowing them to surpass you in terms of generating value that will flow through to their clients and investors. As a result, your market share will gradually decline, and you’ll become less attractive to stakeholders, including potential partners and employees.
Related: Every Business Can Work More Efficiently With Better Data
Some of the essential cloud-based technologies you’ll need to stay relevant in almost any business include:
2. Identifying, collecting and sorting the data
Becoming “data-aware” is contingent upon first recognizing where the data in your organization resides. You are likely already leveraging some or most of the previously noted tech. If that’s the case, the task of locating data is simplified — and even more so if you’re using centralized systems across the units in your organization.
If you haven’t transitioned to digital systems and are still tracking things and conducting business on paper, or if you’re using software, but it’s located on specific computers or servers internal to your organization, you’ll be at a disadvantage.
This hindrance can be acute if you have multiple locations and systems that aren’t linked — a situation where the isolated systems are often termed “silos.” When this is the case, you’ll need to commit staff or hire outside consultants to help you pull data from disparate systems into a unified platform, thus breaking silos.
Once you have all the data in one place, you can begin to put data management systems specific to your type of operation to work. These platforms automatically collect and organize your data to make it accessible to every team member — you’re now aware.
Related: 4 Steps to Become a Data-Driven Business
3. Powering decision-making processes
At this point, your team, and consultants, if necessary, can begin the process of analyzing the data and reporting the findings. Through this process, data transforms into knowledge. That knowledge creates insights into the financial strength of your enterprise, how well you’re performing and where there are opportunities to improve and grow.
The obvious metrics are those related to expenses, sales and net profits. But you can also learn much about customer satisfaction and retention, resource utilization, comparative performance between locations and product lines and so much more.
When you spot multiple functional areas where you can make even 1% improvements each month or quarter, you can make substantial, even game-changing, advances. These strides will solidify your competitive advantage, support a culture of growth and limitless opportunity and push your margins to the top.
Stakeholders will recognize that you’re primed to deliver returns not only today and in the next few quarters but indefinitely. Your team and investors will sense your inherent growth potential and resilience and the ability of your company to weather recessions, new market entrants, and evolving technology and social trends. In other words, your growth will be seen as sustainable and inevitable.
Related: Using Data Analytics Will Transform Your Business. Here’s How.
Starting down the path
If you’re unsure where to start in becoming data-aware, begin by holding a team meeting and openly discussing your objectives with leadership (even if it’s just you and a notepad). Get a sense of what systems and processes you have in place to collect and manage the data you generate in daily operations.
Look at how your systems are connected and see if your current setup allows you to understand how your business is doing today and whether you’re just holding steady or on the growth path. Then research the available tools for your industry that will help you capture, organize, and transform the data.
Whether you do this on your own, with the support of your team or with the aid of experts, you’ll move closer toward building an enterprise that exudes value and is positioned to compete successfully in the long term.
