Some business leaders swear by their instincts, but in reality, data-driven decisions are far more reliable. Accenture has found that data-driven organizations experience more 30% growth per year.
It’s clear that so many companies are starting to take data more seriously than ever. Data analysts have gone from an obscure role to a must-have in any business that wants to grow quickly. Where CFOs once focused primarily on expense management and balancing the books, today they play a central role in strategic business planning.
Humans simply cannot process data as quickly as a machine, but they still have an important role to play in drawing conclusions and choosing the best course of action. Some founders feel more comfortable using a hybrid approach, where they consider both data and expert opinion to make their final decisions.
Big tech companies may have thousands of people whose sole job is to sift through data signals to fuel the bottom line, but not everyone has that luxury. You need to make the most of your limited resources to extract the most value from your data. There are readily available tools and practices that can facilitate this without breaking the bank.
Use the latest data for forecasts
Many companies don’t have a blueprint for how they’re going to use financial data when they start. This can lead to a confusing mix of multiple sources of truth that significantly complicates the process when trying to create the most accurate reports and forecasts.
If you use Excel for your forecasts and need staff to manually copy the latest data, the potential for human error is so great that it is borderline unacceptable for making key decisions on an ongoing basis.
It’s even worse to skip this process altogether and make predictions based on outdated information, because the results are meaningless. This could cause you to have false confidence in the path you are taking when the right data would show you many red flags. If your competitors have better entries in their forecast, they will also receive better results and you will fall behind.
Fortunately, there are solutions to help you create forecasts using the latest data, such as usage Data rails. This financial planning and analysis (FP&A) software package allows you to automatically pull data from multiple external sources into Excel and provides live data updates so management can always be sure they are taking the best possible action at that time.
This greatly reduces the risk of human error and frees up time for analysts to do what they do best instead. DataRails also contains enhancements for modeling using AI to help make even more accurate predictions.
Empower your analysts
Analysts are the crucial link in the business between technical and non-technical personnel. It’s not uncommon for people in decision-making roles to be mostly non-technical, which makes it even more important to ensure your analysts have all the tools they need to maximize their productivity.
It doesn’t take long before a data team can begin to experience communication issues due to the nature of the deep knowledge needed about different data sets to perform tasks optimally.
This information asymmetry can become a real problem when analysts make the wrong choices simply because they didn’t know what their colleagues had been working on.
Atlantic is a solution designed to harmonize data teams, so they can work together as one unit with a shared repository of knowledge. Think of it as Slack for data teams because they can quickly share repositories and analytics projects in a way that keeps everyone on the same page and thus makes everyone more productive with less time. lost.
Effectively track employee data
For many companies, their biggest cost is their employees, especially in a world where more and more people are working remotely. This makes it a prime area for optimization and data can be of great help in this area.
One of the toughest situations is when a business has grown faster than expected and the initial systems that worked for five employees are struggling under the weight of 50 employees. Trying to follow people manually can add unnecessary overhead and waste valuable time.
Yet, it is still important to understand how employees are performing and whether they are achieving their goals. A solution for this is HubStaffwhich allows you to track all employee data in one easy to use place.
This puts an end to the use of a million spreadsheets and instead HR staff can easily create reports to both get the big picture and shine a light on what individuals have been doing. This makes it easier to spot underperforming – or underengaged – employees and reward overperforming employees, which improves staff morale.
Model potential revenue streams
It’s unfortunate that leaders sometimes only see data as a way to analyze past performance and extrapolate into the future rather than a way to help direct expansion.
Today’s data teams can go beyond internal data to analyze broader market trends and spot opportunities in lucrative ways to increase revenue.
Amazon is a great example of how FP&A data scientists can increase a company’s revenue. The team modeled the Prime program and determined it would be a resounding success. They were right, cause it’s over now 200 million paying members. Without data, the decision was much less obvious at the time.
Other companies may have their teams analyze market data to predict the profitability of a new venture or project. Modeling skills and data literacy don’t have to be back-end functions, they can be at the forefront of innovations a company attempts.
Segment your customers
You don’t need to be told the importance of customer satisfaction. If you can keep them happy, they’re more likely to be loyal, which has a direct impact on your bottom line. This indirectly grows your business through the power of word-of-mouth recommendations.
However, to truly conquer customer satisfaction, it’s important to understand that your customers are not a heterogeneous group and often form distinct segments based on a variety of factors. Kissmetrics is a tool that allows you to easily segment your customers and personalize your engagement with them based on the signals they gave you.
For example, if someone hasn’t opened one of your emails in a while, it might be a good idea to send them a personalized discount code to let them know you’re missing them. Alternatively, if you see there is a segment that is highly engaged and likely to buy often, you can email them more frequently with less chance of pushing them away.
It’s a smart way to automate the processing of customer data to lead to optimal actions. The best part about this is that you only need a small team to manage the automation rules, because the heavy lifting of segmenting customers based on their unique data points is done by the service itself. same.
Using data to drive financial decision-making isn’t just for tech giants, as companies of all sizes can implement strategies that help them grow their business. Today, there are solutions that can dramatically empower data analysts so they have more time to focus on how a choice affects the business, rather than manual tasks that could be easily automated.