Every day we are being bombarded with headlines and catch phrases such as the above and while most have a broad understanding of what these statements mean, many are struggling to see how they, or particularly their small business, can get on board and start reaping the benefits. They are being told that if they don’t get on it now, they will be left behind, and their businesses will fail.
What no one seems to tell them is how to actually do it. In recent conversations with SME’s, industry specialists, peers and colleagues, the message is generally the same, where is the data? We can all agree that without data we cannot perform data analytics. How do small businesses with limited numbers of transactions, customers and systems, get access to the data they need?
Well, I have some good news on that front. You already have the data. Where, you ask? Well, it is currently hidden in your processes and systems. Okay, I mentioned processes and systems, maybe what I should have said is a lack of processes and systems. Allow me to elaborate with a story that may ring true with many, if not all, small business owners.
We start small, just you, a laptop, USB printer, an idea and probably a copy of Office with dubious licensing credentials. We grind, make some capital, use excel for accounts, quotes and everything in between, hire a couple of staff and start getting growing. We win bigger deals, bring in more business and invest our capital in things we believe will help us grow, generally equipment and people. More than likely, we are still doing our quotes in Excel and our proposals in word, data is on laptops, desktops and external hard drives, we might have, at this point, taken on an accounting package, in my case, it was Quickbooks. We all have to pass an audit, right? Now, depending how long you have been in business, your account package has probably evolved way beyond a means of invoicing and providing you a P&L. The question is, has your business evolved with it?
Most modern versions of our traditional accounting packages have evolved into so much more with significant analytics built into them. Not only that, but most have migrated to a cloud solution and provide integration into a wealth of third-party cloud applications, such as stock management, logistics, time sheet management, CRM and more. When used, with the appropriate processes, they can provide a wealth of insight into your business, using only the data that you could be generating today!
I am fairly certain that last paragraph made your throat close up a little and yes, this is where most small business owners get stuck, a series of terms and jargon that sound complicated and expensive and while the desire is there, the will dies in one repetitive “glazed eye” cycle that is bound to repeat itself.
The time has come to break the cycle. There is no time like the present to get on board the digital transformation train and guess what, it doesn’t start with technology or at a massive cost. It starts with processes. It starts with understanding the basics of your sales cycle, your procurement cycle, your delivery cycle and using the systems, that you probably already have, to generate actionable data from them.
Did you know you can run your full operating budget from your accounting package and use its built-in analytics to assess your performance against budget, month to month?
Did you know you can track your full sales cycle, from prospect, to lead, to initial proposal, to closure? From there, using the same data, generate sales orders, invoices and purchases orders which in turn will populate your funnel, track your budget and project performance, giving you deep insight into the efficiency of your business.
Did you know you can track time sheets, accounting for every hour spent on a project? How many of us quote labor as a very rough estimate but never know how many man-hours we spend on a project? If you were to do it, you would probably find you are making a loss on labor, more often than not. What could you do with that insight in terms of your efficiency, never mind your bottom line?
Guess what, all the above is available to you today, not by implementing a fancy cloud based, digital solution, but simply by putting the appropriate processes in place and recording the data that those processes generate into your accounting system.
Imagine for a moment, you estimate that your project manager is spending 20 hours on a project, you quote your customer accordingly, but on project sign-off you reconcile the final time sheets and realise that he or she has actually spent 40 hours on that particular project. This ladies and gentlemen is actionable data. You can now make informed decisions on your future projects, either allow more hours or ensure your project manager doesn’t spend more hours than allocated.
It starts right there. In this example, the simple process of recording the amount of time your staff spend on a particular project, entering it into your accounting system as part of your project accounting process and as easily as that, you are becoming a data driven business. This is just one example, there are so many possibilities for further improving your efficiency and generating more actionable data and a good, technology driven business analyst, can assist you once you reach the limits of your time or technical ability.
The one message I would like you to take away from this piece is that your future, in this brave new digital world doesn’t start with technology, its starts with processes. The processes will generate the data. The data can then be used, in conjunction with technology, to propel your business into the future.