MICHAEL AT THE PWC BIGNALL AUCKLAND IS A OFFICE PARTNER AND LEADS THE COMPANY’S EMERGING AND FAST GROWING BUSINESS TEAM. HE JOINED PWC AS A GRADUATE MORE THAN 20 YEARS AGO AND IS KNOWN FOR PROVIDING PRAGMATIC AND COMMERCIAL ADVICE ACROSS A RANGE OF ISSUES
MICHAEL BIGNELL EXPLAINS HOW SMES CAN ANALYSE THEIR DATA TO MAKE BETTER DECISIONS.
There’s no denying that data is becoming increasingly important for the way business leaders make decisions. The growth in data is fundamentally changing the way organisations can develop and implement their strategy. The recent PwC Global Data and Analytics Survey found that every industry is looking to become more data-driven and less reliant on human instinct. It’s exciting to think that business leaders are moving to a point where they can trust the data they have access to and use that information to make smarter decisions.
For many smaller businesses though, access to these advanced tools is often seen as too costly or difficult.
But what many SMEs don’t realise is that start-ups and small businesses will have access to more data than they’re used to, and certainly enough to start informing their decision-making. Here’s a breakdown of how SMEs can start to analyse the data they do have and use it to make better business decisions.
BEGIN BY FOCUSING ON YOUR DECISION-MAKING PROCESS
One of the biggest misconceptions when we talk about data and decision-making is that it’s all about server rooms and data warehouses. However, when we talk about improving the decision-making process with data, the data itself is secondary – it’s really about developing an approach based on facts rather than gut instinct.
This process has to start by determining exactly what big decisions you need to make and the data you need to support them. The process is similar to a scientific experiment – you start with a hypothesis that you need to test, and then you use the data to investigate this assumption, then use the findings to improve the decision-making process next time.
Of course, developing this process takes time. Making a decision from the gut can be done in an instant, while investing in a data-led process requires effort and resources. However, with practice and refinement, the process of making data-driven decisions can begin to rival the ease of making gut decisions.
DETERMINE EXACTLY WHERE YOUR DATA SITS
The amount of data we are generating is always increasing, but many small businesses won’t have invested in a systematic strategy to access, understand, and then use the data they already access.
Even the most basic website and social media presence can begin to provide important insights into customers, while modern business tools can bring the same depth of understanding to internal processes, workflow and product development. In many industries, suppliers and distributors will also share information, allowing smaller companies to access the data resources of their larger partners.
It’s also worth mentioning that having fewer data sources to begin with can make the process easier for businesses to get started. Having an established framework in place makes it much easier to integrate future data sources as a business expands.
FOCUS ON THE FORMAT
Once you know where your data is, look at how the data is being presented. For business owners and CEOs who don’t have a background in data science, having a dashboard or similar presentation format for the data they are working with can make it much easier to understand and visualise the trends and patterns that are informing their business.
Visualising data also feeds back into the first point on developing a strong decision-making process. When data is presented in an easily accessible format, it becomes much easier to refer to when approaching a big decision.
These steps are only the start for SMEs to begin using the data they have access to, and the specifics for each company will depend on their size, industry and extent of their current data collection. However, SMEs that can develop this strategy, integrate different data sources and convert it into a useful format will be well placed to make better decisions and find new growth avenues.