Businesses are inundated with data on a daily basis, everything from financial information to website statistics. There’s so much information available to businesses, but what’s important isn’t the volume of data so much as what your organization chooses to do with that data. The smallest nuance or trend could be the key to your profitability.
Data drives an increasing number of business decisions in the digital age, helping companies like Amazon and Uber transform the business landscape. It’s not just large enterprises that can benefit, though. Small and midsized businesses can reap the benefits of big data from their ERP too, if they know how to use it.
Getting Greater Profitability
Getting data into your ERP isn’t difficult at all. As your ERP gathers data, it allows leaders to see the complexity of patterns and correlations that describe the various aspects of the company. But as you probably know from working with the sheer volume of ERP data, just having the data isn’t enough. It’s what you do with it.
Focusing on these five keys can help your finance team in achieving greater profitability through data analytics:
- Asking the right questions. Looking at end results for sales, customer retention rates, or revenue is informative, but purely descriptive. ERP data allows you to get deeper into the details: What drives customers’ decisions to purchase or not purchase your products? Is it advertising, brand loyalty, or price? Who are your most cost-effective vendors? Which products have the highest rate of complaints and returns? Narrowing the questions allows the data to reveal detailed relationships that form the basis for actions.
- Using appropriate data. Most businesses won’t struggle with a lack of data, but instead struggle with an overabundance of ERP data. To discover meaningful patterns, narrow your focus to evaluate specific data elements. Identifying operational inefficiencies needs an entirely different set of data than the metrics used to understand customer wants and needs, determine how to deliver the right information at the right time, or evaluate market trends. Finding answers to some questions might require you to first manually integrate information collected by your ERP and other systems, especially if your company’s business management tools are more siloed.
- Leveraging specialized skillsets. Because big data is so voluminous, it’s important to apply the right tools to maintain data integrity and ensure an optimal analytic approach. While existing staff could probably find useful patterns, getting maximum value from data means calling in true experts. There’s always option to outsource advanced data analytics or to bring in external consultants. Midsized and larger companies may prefer to invest in a permanent in-house analytics team. Whichever route you choose, you’ll be well served by experienced analysts who can apply appropriate techniques for parsing the data.
- Pushing beyond descriptive analysis. To change outcomes, it’s important to understand what is causing the patterns the ERP data describe. A careful examination of the data will show you what is happening. The more important question, though, is why these things are occurring. What is likely to happen in the future, and what should you do about it? Using predictive and prescriptive analysis, data-savvy professionals can uncover key insights to inform business decisions that boost the company’s bottom line.
- Taking strategic action. Formulating a response to new information is the real test of leadership. How much change can or should the business embrace, and how quickly? Which risks are the most urgent? Which opportunities are the most time-sensitive? Will adapting to leverage an anticipated scenario create long-term benefits? Numerous questions like these arise from the answers data analytics provide. Resolving them wisely demands sound judgment as well as an intimate familiarity with the unique business context.
Interpret ERP Data with the Help of ASI
From identifying new markets and meeting customer expectations to managing risk and capturing time and dollar savings, data analytics holds the potential to revolutionize how CFOs and other leaders navigate the daily challenges of running a company. Finding a clear path through an overwhelming volume of information can be challenging. But the payoff for those who persist and make changes in response to their findings is a significant improvement in market positioning and profitability.
The software you choose plays a part in determining the success of your business. It’s important to identify top critical requirements, and you don’t have to do this alone. ASI has been helping customers implement the right software for their needs for more than 30 years. See how we can help your business by scheduling a free consultation today.