Every day, we use data to make decisions in our personal lives. We may use the data collected in product reviews to drive our purchasing choices. We may review new cases of coronavirus in our neighbourhood to help us decide whether to wear a mask.We may rely on our GPS to help us choose the best route to where we are going. We rely on data because it is impersonal. It has no agenda. It tells a factual story. Yet many business decisions are often made using a gut feel and that's why things go wrong.
While many employees have great instincts and the expertise to make predictions that propel their company forward, we are all only human. As humans, we make mistakes because we cannot oversee everything that is happening within our business. We rely on mental heuristics and biases to make sense of the world around us, which is helpful in many ways, but unfortunately also prone to error. This can lead to missed sales opportunities, an inaccurate estimation of profitability, or lost capital in unsold goods taking up warehouse space as dead stock.
In an ever-increasingly competitive business environment, using data to develop fact-based strategies takes the guesswork out of tasks such as marketing a new product or service, managing employees, or even navigating a merger.
Challenges in traditional decision making
Information coming from disparate sources leads to multiple versions of the truth, leaving executives with a muddled perception of their company's overall performance. And while many businesses do utilize reports from their ERP systems, this is not ideal because it requires time consuming custom queries, and produces static reports. This means that every time you want more information about something you see in your report, you need to go back to IT so that they can generate a new report. Needless to say this is not very efficient. Because of this lengthy process, reports and insights are often outdated by the time they reach the relevant manager's or executive's desk.
Data-driven decision making
When executives make decisions using up-to-date data, the facts can be used to guide their long-term view of the market and competition. Gut-based decisions won’t hold up any longer in our data-driven world. Due to the unbiased nature of data, different departments are empowered to utilize it when making decisions that benefit their specific domain.
For instance, the sales department can better identify sales opportunities. Sales reps informed with real-time product, pricing and customer details will be able to use these strategic insights to increase sales. A warehouse team may use the same data to see how to best streamline purchasing to avoid understocking or overstocking items that aren’t selling and so are at risk of becoming dead stock.
When executives have access to a single, unbiased view of the truth, they are able to effectively manage their business’ profitability and growth. According to 'The BI Survey' by BARC, as many as 84% of companies who have implemented BI report making better business decisions, and 41% report increased revenue. Phocas has consistently performed best-in-class in BARC's reviews on KPIs such as 'Business benefits', 'Recommendation' and 'Price-to-value'. This way you can trust that Phocas will enable your business to increase sales, reduce costs and make better decisions.
How to promote a data-driven business culture
Promoting a data-driven culture can be accomplished by using business intelligence (BI) tools, such as Phocas. Phocas is designed to be used by non-technical users with minimal training. Dashboards are updated automatically, represent real-time insights, and can be personalized with relevant KPIs. Phocas also gathers your data from your different sources and integrates it to give users a singular and complete view of your business. With Phocas, this information is accessible from anywhere via mobile devices such as smartphones or tablets to facilitate decision making even when out of the office.
To remain competitive in today’s data-driven economy, business decisions must be based on more credible and reliable proof than anecdotal or subjective evidence. BI enables fact-based decision-making by identifying actionable insights and effective strategies for each area of your company.
To learn more about how to transform your business and carry-out data-driven decision-making, download this free e-book here.