“If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”
— Jack Welch
Many businesses are out of step with the external rate of change. Few companies think to challenge if they are executing the right plan. Even fewer think to question the foundation of their strategy.
I spoke about the following topics at the at a breakfast event organised by Sydney Hills Business Chamber in June 2021. There was a QnA session on Data Driven Decisions after the presentation which is available here.
How do we make decisions?
We spend a significant amount of time and energy making different choices in everyday situations. If these day-to-day decisions take our time and energy, think about the ones we need to make to operate our business on a daily basis. Should I invest in Marketing, paid advertising or SEO? Which products/services should we continue with and which should we phase out? Who should I recruit or let go? As a business owner, can you afford to go with your emotions/gut feel all the time?
Why is data important in driving decisions?
While intuition can trigger your move towards a specific route, it is by using data that you can verify and understand the logic of taking a particular path.
For a small business, the consequences of bad decisions could be serious. Due to the tight margins, fewer resources and limited cash flow, it means that a small business can spiral downwards with a single wrong decision.
Data provides more than just content; it provides context which informs decision making. Data brings problems into the light and helps you see the possible solutions. It allows you to optimise your business operations, reduce costs and increase profits.
Data also gives you consistency: consistency in your Marketing, consistency in your Sales, consistency in your Operations and Customer Service. In short, you keep your customers consistently happy.
Better Decisions = Better Business
Business owners need to leverage available data to look into their processes and understand what is working and what is not working in their business. They should adopt data-driven business decision making to make more informed choices that are aligned with their business goals and strategy.
Today, data-driven decision making is more critical than ever. Sometimes it may pay off to go with your intuition, but most business decisions should be based on facts and figures for business growth. Your growth is dependent on your choices, and your choices must be dependent on your data.
Can data be misinterpreted?
Like any other business transformation project, data-driven decision making requires the right processes and culture to be set up within a business. For example, employees may be making decisions first and then looking for data to prove their decision.
The source of data is also essential. If the data collection is not reliable, the pattern that the data shows and its interpretation would be flawed. Any decision based on such data would be inaccurate and may cause financial and reputational loss to the business.
Three challenges that most businesses face when it comes to good data solution implementation:
1. Time & Cost Constraints
The time that you and your team is spending on operating a business without proper data tools and automation is costing you a lot of money. Performing tasks manually are prone to errors, incorrect data entry, and your staff might be demotivated if they are doing the same tasks every day. CRM, ERP, integrated and automated solutions, implementing such tools in your business may have a cost, but you need to realise that in the longer term, you are losing out not only on time-saving and staff morale, but you are losing out to competitors.
2. Lack of Differentiation
Data helps you find business opportunities and threats before they grow into serious issues. This creates differentiation and provides you with an advantage over your competition. I understand that many customers are price conscious, been there done that. But I also believe that if a service is of high quality, customers would be willing to pay a premium because it saves them time and things work the first time. It is all about the superior experience.
3. Need to Get More Done
Reliable data collection ensures consistent quality and provides value to the customer. Automating processes means freeing up employees from time-intensive low-skill repetitive tasks, optimising internal resource allocation, and time available for regular human interaction with your customers, resulting in increase in sales, customer retention and satisfaction.
Contact us if you would like to discuss your business challenges / pain points and explore if QTECX Solutions can help you.
