Anything that doesn't provide a satisfactory ROI could be seen as a poor decision. Jobs, stock prices, and your own future can be riding on your choices. Today's business leaders are relying more heavily on technology so that decisions are data-driven and risks or guesswork are minimized. Here are five ways to make wiser business decisions when it comes to data.
A decision matrix is essentially a table used to outline and assess possible alternatives relating to a particular business option. By organizing the matrix and quantifying values such as related time and expense, you can visualize more easily the relative merits of each option in meeting your goals. Also called the Pugh method, you can eliminate the subjectivity of various stakeholders and assemble a concise statement of facts. A decision matrix allows you to prioritize options weighted according to relative costs and benefits. There are a number of software products for building and analyzing the matrix.
More companies are relying on technology such as POS systems, scanners, and internet analytics to capture data in real time. Automation for loading this data into a business intelligence (BI) system allows you to perform essentially real-time reporting. The more current your reports are, the better they serve your company and your decision making.
Dashboards are a versatile and immediate reporting tool that represents measurements such as key performance indicators (KPIs) in graphical elements that are intuitively easy to understand and appreciate. Other team members can simply open a link and see where key business metrics stand. This can be done not just from BI solutions, but common office tools. Excel dashboards can be effective reporting tools for busy teams and managers.
Logistics & Inventory
Logistics requires making constant decisions to find the most efficient routes, the cheapest and most reliable vendors, and ordering and scheduling materials to meet demands. Today's companies rely on ERP (enterprise resource planning) software to track supply chains and inventory.
ERP and similar systems can be integrated with BI solutions to generate reports guiding the most effective logistics decisions. Analysis can discover optimum inventory levels so that you can automate ordering or send alerts to ensure there is always enough on hand. It can help to save on fuel, packaging materials, handling times, and much more.
Predictive analysis is one of the benefits of BI that many companies come to rely on. The more historical data that's collected, the more accurate your forecasts will be. This provides direction in many business decisions. For example, you can estimate the production capacity for your plant in Denver five months or five years from now, compare it to demographic projections for the same time frame, and change strategies accordingly.
Forecasting identifies trends or patterns before they occur. It allows you to both mitigate negative influences and maximize positive trends. By making accurate projections of where any aspect of your business is likely to stand in the short or long-term, you can make proactive rather than reactive decisions.
Performing market research to determine who your target audience is and how they behave is crucial to staying ahead of the competition. Modern internet apps can capture and analyze the number of clicks per ad, social mentions, and even categorize and aggregate customer feedback.
Staying in touch with your target market helps you to better understand them and what they want. You can live up to or even exceed consumer expectations. Building up a following through brand advocates creates more positive visibility for your company.
The right tools and techniques are only half the battle. You also need the right data for the right questions. When you do have the decision making process down to a science, you have the means to make better decisions consistently.
I hope you enjoyed this article about ways to make more intelligent data-driven decisions in your small business or startup.
Interested in more articles about digital analytics?
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Published by Michael J Schiemer
Owner of Bootstrap Business
Money - Marketing - Motivation
Digital Marketing | SEO | Social Media
Mike Schiemer Builds Better Business
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