Blog | May 10: Better Data = Better Decisions | Navigator Business Solutions, a SAP Gold Partner®

Navigator Business Solutions, a SAP Gold Partner®

Navigator Business Solutions

May 10: Better Data = Better Decisions

When Albert Einstein said, "Information is not knowledge," he could have been referring directly to the challenge small and medium - sized enterprises (SMEs) face in transforming data into insights that can drive improvements in strategy and operations. SMEs are better positioned than ever to gather and analyse data. The real imperative, however, is to develop visibility into how their businesses operate, enabling employees and executives to react quickly to market changes and shift strategies as new opportunities emerge.

Admittedly, any discussion of business analytics may at first seem irrelevant to SMEs, many of which operate without large databases or high-end informationtechnology (IT) resources. And certainly, data management and analysis can be daunting even for firms that deploy the most sophisticated technology and management practices. In reality, though, small and midsize enterprises are just as able as larger companies to derive the benefits of business analytics. But it will probably require them to re-evaluate their approach.or design a new one.to creating knowledge that can drive business performance.

Indeed, SMEs need that visibility and insight to achieve sustainable growth and profitability. Strategically, they must be able to break down their business and identify which areas (eg, customer segments, supply chain activities, revenue streams, partnerships) to emphasise at what stage in their evolution. Operationally, by looking at individual revenue sources, customers, products or services, delivery channels and supply chain links, they need to ascertain which activities are most profitable and which have the most potential. By combining these insights, they can also spot warning signals from daily operations that have long-term strategic implications, such as a near-term concentration of receivables that would suggest when longer-term business diversification is advisable.

Acquiring the tools to attain visibility

According to a recent survey by the Economist Intelligence Unit, SMEs recognise that unstructured data can be counter-productive. Fifty-one percent of survey respondents say they need to spend valuable time hunting for key information among unstructured sources (see chart). At the same time, however, just one-third of respondents say they have ready access to the information they need to get their jobs done.

SMEs need to formalise their approach to gathering, storing and analysing data in a systematic and relevant way, so as to gain visibility into the specific aspects of their business that are most relevant to meeting business goals and strategy (even though visibility may ultimately be the driver of a shift in that strategy).

Thankfully for SMEs, technology is becoming more and more affordable, with an increasing number of off-the-shelf and customisable business intelligence applications available to fit a variety of scales, budgets and capabilities. Preconfigured servers and software are available, with plug-and-play options that enable SMEs to set up solutions that incorporate available data from a variety of sources if necessary. SMEs that lack historical data can opt to set up their systems and populate them with data as it arrives . and that data can then be warehoused, integrated and analysed.

Visibility can drive profitability

Of course, the key is to put the analytics to use in a way that can drive business results by reaffirming or changing the way operations function on a day-to-day basis and by driving longer]term strategic decisions. The tangible benefits of visibility depend on the SME, but it is clear that the applications are considerable, whatever the type, scale, business focus or profile of the SME.

Conclusion

SMEs are less likely than larger companies to have in-house systems that automatically gather, house and analyse data. But SMEs can still "mine" their data to obtain visibility into their business. Admittedly, SMEs will need a strategic approach, and a workable IT solution, to produce the kind of business intelligence that will actually drive enhanced performance. But once established, the resulting visibility can help SMEs optimise operations on a day-to-day basis, and make longer-term strategic decisions about how to pursue their business profitably.

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