Is too much data dragging you down?
We live in a world of Big Data. Businesses are collecting a wealth of information on everything from daily transactions to customer preferences and detailed sales metrics. And while having a depth of usable data helps companies make smarter decisions and grow their business, it can also become increasingly overwhelming to sift through and determine what is useful and what is clutter.
Are you drowning in data? If so, you're not alone.
A recent survey by the Chartered Institute of Management Accountants and the American Institute of CPAs showed that one of the top contributors to poor decision making in business is information overload. Only 37% of respondents said that big data has helped them in their decision making processes, while 36% said their organization is not coping with information overload at all, and 32% claimed big data has actually made the decision making process worse.
However, the same survey revealed that among high performing organizations, 86% are successfully using the information presented to management. The difference is that these organizations are focusing on the key value drivers of their business models rather than being bogged down by all possible data points.
So instead of allowing too much data to overwhelm their organization, successful businesses harness only the data that is useful to their decision making process. They don't necessarily discard the rest of the data, but they don't focus on it either.
But how can a company streamline their data? There are a number of steps you can take to reduce your data overload.
Identify Vital Information:
You may collect hundreds of details about your customers, your business processes or your revenue stream, but if the most vital details are getting lost in the sea of data, they do you little good. So the first step is to identify the information most vital to your organization. You may need to know that most of your customers shop on Thursday afternoons, or that they spend an hour comparing companies online prior to making a decision, but is it important to know that 18% of them are single and 48% have two kids? Determine which details are most important to the decision making process in your business and focus on those.
Develop a Distribution System:
Once you've determined which data is most important to your business, it's equally important to develop effective methods of communicating that information to the decision makers in the business. Make sure your data is accessible to all pertinent parties and limit the chance that data will be corrupted by human error or poor communication as it moves downstream. This is most often accomplished by having a dashboard where everyone can access pertinent data at any time, without relying on spreadsheets or emails to compile and distribute information. The benefits of a dashboard are many, but one of the most important is that it reduces user error, ensuring that the data points that drive your business are correct.
Define Information Roles:
Your accounting department may not need to know about your surge in Thursday shopping, while your management team may not need to know that 95% of transactions are made via credit card. But this information is important to specific users, so be aware of who needs what information, and ensure that they have easy access to what matters most, without being bogged down by data that is irrelevant to their daily processes.
Visualize the Most Important Metrics:
Does your CEO want to spend 30 minutes reading a thorough report, or would he rather see the high level view via a chart or graph with the option to drill down into more details as time (or interest) allows? Make sure your data is delivered in such a way that it's not only easy to understand, but also visually rendered to allow for greater engagement. By using charts and graphs to highlight your most important data, you're more likely to increase engagement while reducing the time needed to consume vital data.
Regularly Review and Update Your Data Priorities:
Growing businesses are rarely static in their processes. The same goes for the data they need to process in order to make important decisions. So regularly review your data distribution system to ensure that the data that matters is making it into the right hands. There's little worse than missing out on big opportunities because you ignored your business' evolution and defined new processes by old priorities.
If you want to know more about making your data work for you, Spud Software is here to help. We can assist you in defining which data is most important to your business, and then help you design a system that will not only put vital information in the right hands but will also scale with your business as it grows. For more information, visit our website or feel free to give us a call at 810-695-0001.