DATA = Gold Mine

Organizations make business decisions every day. These decisions may range from how much discount should be given to clients, how much raw materials we need, marketing promotion…etc.  They can have a direct impact on costs and revenue to the organization. For example, giving a customer a discount may increase revenue but may not help the bottom line.

How do we make business decision?  Based on experience? guessing?  Unfortunately, not all of us have the right business instinct or it would take a long time to build up such experience.  How can we make a better decision?  Information!  We need strategic information to make a better decision!  Accurate, consistent, timely information can lead to lower cost, higher revenue and better customer satisfaction.

Reducing Costs

Once the information backlogs are eliminated, we can easily identify the root causes of any inefficiency in our operations and take prompt action to fix the problems e.g. building model to optimize business processes; identifying wasted resources and reducing inventory costs.

Increasing Revenue

“Who are our best clients that delivered 80% of our profits?”, “What are our most effective marketing channels?”  Such information allows us to micro segment our markets, gain an edge over the competition and empower the sales force to focus on high profitability customers and products.

Improving Customer Satisfaction

We can dramatically reduce the time to answer our clients’ questions, better understand our customer behaviors and hence provide customized services and even provide information to our clients so that they can make smarter decisions.

Challenges

In God we trust; all others must bring data. – W. Edwards Deming

By now, we should understand the importance of information.  Unfortunately information is not always readily available to every decision maker.  They have to wait or even guess!  What are the challenges? We have many business applications; e.g. finance, human resources, customer relationship management, supply chain, manufacturing.  They contain vast amount of data; however, data is not information.  It is a long way to transform data into information!

Garbage in, garbage out

Data quality is always the biggest challenge.  Poor data quality can jeopardize decision makers’ ability to make a better business decision or even make the wrong decision.  This problem could take a lot of effort to fix; so it is far better to implement a proper data strategy to avoid such problem.

Too slow

Each system generates many reports that deliver a lot of information to the decision makers.  However, if we need extra or the latest information, then we have to rely our IT department to extract more information for us.  We all know how long it would take!  And it may take a few cycles to understand where the real problem is.  It is simply too slow and we don’t always have the time to wait!

Inconsistent

Some of our power users know how to use Excel or other reporting tools to extract data directly from the enterprise applications.  Great!  They can retrieve the latest information in real time.  However, it leads to another issue, i.e. consistency.

“How many people are working for our organization?”  It is a very simple question, but you may be surprised to find out how many different answers you can get; e.g. should I include employee with disability pay / maternity leave? how about contractor? If an employee who works 3 days a week; should we count 1 or 0.6?  Even such simple question can lead to so many different, inconsistent results.  Imagine what you would get if we want a more sophisticated report!

Lack of 360 views

Our organization has implemented more and more systems over time and each system has captured different data.  However, only a few employees may have access to all data; our database administrators.  For example, account manager may only have access to sales data but he may like to gather other information, e.g. customer satisfaction, inventory level, and other market information before he heads to his client’s office.  He may send an email to his department head; and his department head would forward his request to other department heads who would subsequently pass the request to their analysts.  Good luck if you can gather all your information in 2 weeks time!

Business Value of Data

What is the business value of data?  It is enormous!  Data in our system is the gold mine in our office.  It would help us to reduce cost, increase revenue / productivity and improve customer satisfaction!  What is the business value of a loyal and satisfied customer; especially in today’s downhill economy?

Ask yourself the following questions:

  • Do you find it takes too long to get the information that you need to make a business decision?
  • Do you receive consistent information, no matter who prepare the information?
  • How many places do you need to go to get the answer?
  • Do you know where to look for the information?
  • How often is data rekeyed?
  • How much information do you need to manually aggregate?
  • How much data needs to be manipulated to get to an answer?

Do you need a better reporting system that can transform data into a good mine?  Most companies said “No, we already have a management information system.  If it ain’t broken, don’t fix it”  However, a well implemented business intelligence solution could give your competitive advantages and empower you to grow stronger!  So act now and benefit tomorrow!

Andrew Chan is the owner and founder of ALG Inc.

We help you to make better and faster decisions!

About Andrew Chan
Andrew Chan is an Business Consultant who gives you accurate, consistent and timely information so that you can make better and faster decisions. He is an Associate of Society of Actuaries with over 20 years of IT experience. Apart from strong analytical skills and proven technical background, he was also a former system director at Manulife who had extensive project management experience. If you are looking for someone to gather, consolidate, validate, visualize and analyze data, look no further! Andrew can provide the most cost effective business analytics solution so that you can explore, optimize, predict and visualize your business. Don’t guess on any decision, no matter it is finance, operation, marketing or sales! Always ask for evidence!

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