The business data available to organizations today, no matter their size, verges on limitless. Where as little as 10-15 years ago data was confined to receipts taken at the end of a business day and some basic inventory numbers, modern technology allows for an incredibly diverse amount of information to be garnered from an equally diverse range of sources. But why should you care about a broad range of information sources? This is the eternal question faced by business leaders when it comes to any information fed to them. Is the information important? Is it worth your time sourcing and reviewing? There are only so many hours in your day, so you need to be confident that you’ll get return on the investment of your time and resources. Here are just 4 ways your business’s bottom line can benefit from the proper utilization of your database.
1. Highlighting Inefficiencies
Streamlining business operations is one of the most effective and efficient ways to lower your costs and subsequently increase your profit margins. But gaining insight into what fat to trim can be a difficult task. More often than not your database will have the answers, it’s just a matter of identifying them. Bottlenecks, procedural issues and other inefficiencies can be quickly identified by a good business intelligence solution. Huge amounts of data can be analyzed in a few clicks leading to extremely detailed insights. Does your warehouse dispatch far fewer items on a Friday afternoon when compared to a Tuesday afternoon? Are there particular points at which your customers tend to leave their journey with your organization? The solution to these inefficiencies can be simple and inexpensive. Indeed, the difficulty may lie less in implementing a solution than it does in simply understanding the exact problems that exist.
2. Guiding Your Future
To understand your future you must first understand your past. Through the use of descriptive analytics, again via a Business Intelligence (BI) solution, an organization is able to look into their own past in order to get a sense of where they’ve come from. This data forms the foundation from which predictive and prescriptive analytics can be performed. Predictive analytics allows an organization to forecast trends into the future using the data of the past. Prescriptive analytics on the other hand uses simulations in order to offer real-world advice on these predictions. Used together, descriptive, predictive and prescriptive analyses (admittedly a mouthful) offer a complete picture of where your organization was, where it is currently, and where it might soon be headed. With the help of your database that destination is far more likely to be profitability.
3. Making Smarter Business Decisions
A decision made after considering all the factors at play will be better than one made on limited information – there are no two ways about it. Unfortunately many business leaders are making the big calls without even realizing that they haven’t got access to all of the relevant information. By not properly capitalizing on your organization’s database, you’re missing out on vital insights into your organization’s strengths, weaknesses and how it operates. Think of business expansion or consolidation opportunities. Entering into a new market represents a huge investment for any organization, but if you do so based on ‘gut-feel’ – often described as business acumen – you are, in reality, gambling with your organization’s future. Your database can take the guesswork out of such decisions by advising an organization’s C-suite based on quantitative, data-driven facts. The difference in the return between a data-driven decision making process and a more traditionally speculative one can be as stark as investing in a blue chip share or a spin of the roulette wheel.
4. Learning How To Interact With Your Customers
Your customer base is the driver of your business’s profits. By better understanding how your customers interact with your organization, you’ll be better placed to cater to those customers. You may not know it, but your database will be replete with information on the dynamic between your business and your clients. Does your organization’s website offer visitors the best experience possible, or are there certain pages or forms that have a higher abandonment rate than others? Have the demographics of your customers changed over time? Are there certain product or service groups that have dwindled in popularity in the last few years? How do your customers make contact with you, and which means of communication provides the best customer experience? Answer these sorts of questions with the help of your database and you’ll be perfectly placed to sculpt a customer experience that inspires both loyalty and a larger spend.
Why should you care about your database?
When mined using the proper tools, its potential for insight into your business is unparalleled. An unexploited database is the equivalent of having buried treasure in your backyard, but not bothering to dig it up. Sure, you’ll need to spend time and money unearthing the gold, but this initial investment pales in comparison to the treasures that will be made accessible. Profitability can be found right under your nose, in your organization’s database. But the decision to take advantage of it rests firmly with you.