According to research conducted by McKinsey before covid-19 hit, 92% of companies thought their business models would need to change in order to remain economically viable given their industry’s rate of digitization. Now, the pandemic has underscored that need, especially for businesses lacking the capabilities that have shown to be particularly robust during the lockdown, such as access to timely data or an online sales model. Leaders are now thinking strategically about ways to better use technology and data to proactively enable data-driven decision-making across all aspects of their operations to rebound successfully.
The global pandemic has caused far-reaching impacts across the business world. As countries, suppliers and freight transporters closed down, businesses have had to make rapid decisions to preserve their supply chain. They’ve had to become agile in response to changing customer behaviour. And ultimately, they’ve had to make difficult decisions in response to issues they’ve never had to face before.
What technology best supports data-driven decision-making?
To practice data-driven decision-making, you must gather and group historical information to analyze trends and make decisions for the future based on what’s worked in the past. Rather than opinion or personal experience, this strategy can help business leaders respond to challenges in an objective, bias-free and justified way.
Where do managers start with a data-driven strategy? Mid-market companies have a limited tech budget, and many digital projects take a long time to implement. A simple path to data clarity is with data analytics software, which works as a platform or interface that collates all data sources in your business, such as your enterprise resource planning system, customer relationship management tool, or general ledger.
You'll want to select software that is compatible with your current tech stack — this way, implementation will be relatively straight-forward, and you will be better able to scale and add more data sources.
Cloud technology has facilitated the rise of vertical SaaS (software as a service) data analytics and more bespoke solutions. In contrast to horizontal SaaS solutions, which solve broad needs across industries, vertical SaaS solutions address industry-specific needs. With vertical SaaS, industries such as plumbing and HVAC, food and beverage, and building and industrial supplies can make use of custom, tailored solutions to gain access to all of their data.
Managers have to address a large number of interdependent issues simultaneously. This requires access to timely and accurate data to support effective decision-making.
In order to remain competitive and to navigate the challenges of the pandemic, companies have had to react faster to every situation. This means they need to review operations on a daily and/or weekly basis so they can make critical decisions about cash flow, retaining staff and prioritising payments to suppliers.
Without access to the relevant data, companies are forced to rely on gut feelings and personal experience when making these decisions. Considering how vulnerable COVID-19 has made some businesses, there is little margin for error. Companies that embrace data-driven decision-making instead can rest assured that their decisions are based on unbiased information.
What’s more, a strong data-driven decision-making strategy will provide different departments access to the same single source of data, ensuring that leaders execute strategies for their individual departments that also align to the broader organization’s goals. This kind of overall alignment is key to executives effectively navigating their businesses and coming out of the pandemic in a stronger position.
Providing access to the same data across the business also helps develop a data-driven decision-making culture. Data helps teams to adapt and learn together, enabling them to easily share ideas.
Be ready to capture early demand
Businesses should be ready to capture early demand, and data insights can help them with this. Experts predict that B2B customers are likely to buy less expensive products, resulting in big changes to the market. Brands will be repositioning themselves and shifting to digital channels in the battle for new and existing customers.
In business, there’s always an element of risk, but data-driven decisions make you less vulnerable.
For example, imagine you’re planning an online sales portal for your electrical business so you can offer lower-priced goods to capture the new demand. Instead of starting from scratch and hoping a new strategy works, you take a look at your other channels and the behavioural trends of customers. What sectors have been buying, what top-selling products are best for launch, what margin can you expect based on different sales volume? Rather than guess at what your customers want in your online sales portal, replicate the offerings that have worked in your other channels. Don’t implement anything that your data doesn’t support.
Your business’s data is a valuable resource. Before the pandemic, not using it to inform decision-making and strategy was merely inefficient; after the pandemic, failing to collect and analyze your business data may make it impossible to remain competitive. By taking advantage of the insights your operations have to offer, you’ll be doing all that you can to make your business rebound faster.
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