Think Your Company Is Too Small For Big Data? Think Again!
In the strictest sense, if someone means the ability to analyze terabytes (as in 1,000 gigabytes) of transactional data for nuanced customer behavior for a small to medium size business, then the answer is ‘yes.’ Your company is too small for big data, at least that big data. That said, one of the greatest exploitable opportunities ignored by small and midsize business owners is utilizing their own transactional data, through data analytics, to gain actionable intelligence for improved efficiency and profitability. You may wonder, where is this transactional data we are referring to. Well, do you use QuickBooks, Sage, SAP Business One, Fishbowl or just about any other accounting/ERP system other than paper ledgers to run your business?
“That’s where the money is!”
Willie Sutton was the infamous bank robber that, when queried by a reporter about his motivation for robbing banks, stated the obvious. But his statement is analogous to our response to business owners that are curious enough to explore data analytics, given that we tell them to look to their accounting/ERP systems, ’because that’s where the data is!’ Most business owners do not think of their accounting/ERP systems as data repositories, but that is what these systems represent. In fact, business owners and their teams that have been dutifully recording invoices, receipts, payroll data, expense payments, inventory movements and the like, are already in possession of a gold mine of transactional data ready for prospecting.
Analytical Insight Enables Potent Action
Though the value proposition of data analytics for business owners may seem difficult to grasp or uncertain, one should assess the opportunity costs associated with using the traditional ‘by seat of one’s pants’ method. For example, what is the opportunity cost of maintaining high inventory levels because of an inability to accurately set reorder points established to meet your service levels vs. other investment opportunities? Or what if you can not determine the profitability differential between various customers when trying to allocate scarce resources across your company and make the wrong choice due to a lack of data? If you compare the cost of poor decision making vs. informed action, the value proposition becomes much clearer and compelling.
What Are The Next Steps?
If you are ready to learn more about how you can begin exploiting your transactional data, then contact Profitwyse today. Our firm focuses on implementing data warehouses and data analytics that leverage accounting/ERP system data, enabling clients to make better decisions that are aligned with strategic objections.
If you are a business owner that is looking for ways to leverage your data analytics, please contact us today.