In today’s rapidly changing business environment, traditional business models are being challenged like never before. For example, consider the impact of social networks on purchasing decisions. Many consumers expect a direct relationship with the companies they buy from through Facebook, Twitter, and other social networks. This expectation was almost unheard of just 24 months ago, yet it is rapidly becoming a business necessity. So, what will the next two years bring to your company?
The answer to this question can be found by leveraging data stored in your company’s financial information systems. Here are three critical steps to taking advantage of your data:
1) Collect the right information. Good business people know the key drivers of their company's success. For some, it could be based on product characteristics. Others may have offices or divisions that perform better than others. Key drivers come in many forms and are unique to your company. Identify the key drivers for your organization and then make sure you are capturing them in the financial transaction stream in order to properly measure performance.
2) Analyze data in a timely manner. Relying on income statements produced one to two weeks after the end of a period will not provide useful information. Traditional financial statements are summarized along company hierarchies and do not provide performance data based on key drivers. For example, online reputation can greatly affect sales performance. Yet this is not something that is found in an income statement. Companies need to identify trouble indicators that can negatively impact their reputation before the damage is done. Typical indicators of quality are important, but so is data from customer reviews and other external information. These include the number of mentions for your company and products on social networks, the percentage of mentions that are positive vs. negative, the number of page visits and sale conversion ratios by products. Knowing whether any of these metrics indicate a problem requires tracking the results on a regular basis. Dashboards can facilitate this process.
3) Take action immediately. Collecting the right information and analyzing data in a timely manner is important. However, to achieve success requires effective and timely action. Constantly challenging the status quo is important. If a particular go-to-market strategy is losing effectiveness, it needs to be strengthened or replaced. If a supplier is failing to meet delivery and term commitments, the company should begin planning for alternatives. Effective action should be aimed at providing the best overall experience available to customers.
Tomorrow's leaders will have found their way using today's information. How well you know your data will determine your company’s future success.