Driving Decision-Making with Data
05/23/17 | 8:00AM | Posted by TEAM Software
Data allows you to dig deeper into the inner workings of your business. But, just having access to the data doesn’t do much until you interpret what it means for your business. Once you figure out what it means, you can put that insight into action to drive decision-making across your organization. We caught up with some TEAM experts who have a few tips to help you along the way.
Know what you’re looking for
You can’t make data-informed decisions if you have no idea what questions you’re trying to answer. For Heidi Carlson, Vice President of Finance at TEAM Software, most of her questions — surprise! — revolve around financial data.
“It’s those day-to-day questions like: What things do we need to focus on to improve? In which business segments should we continue working? What’s making us money vs. what’s not?” said Carlson.
So, tip No. 1: Determine what questions you have. Then, look at the data to see what answers you can find.
Structure your data
“You will save yourself a lot of fishing if you know how you want to view your data in the end,” said Ron Smith, Business Intelligence Analyst at TEAM Software. “Think of not only what numbers you want to find, but also at what level you want to report it.”
For example, if you’re looking for an overtime report, you could look at a large number like total overtime hours for the entire company. However, to be more meaningful, you’ll need a timeframe — by day, week or month. You could even go so far as to drill down to each regional director, job, supervisor or even employee. However, if you get too granular or too broad, you might miss what you’re looking for. So, it’s important to structure your data to find the sweet spot.
Have clear metrics
Once you’ve put your data structure in place, you can determine your goals and metrics. This will help you understand whether your answers gleaned from the data meet the goals you’ve set. For example, you set a goal to maintain a certain percentage of profit margin by job. By looking at the data, you discover that you have a couple of jobs that are falling below the threshold. By drilling down further into your data, you can uncover why you aren’t hitting those numbers. Do you have unnecessary overtime? Did you bid it correctly in the first place? Having metrics in place for every question you ask makes it easier to find areas for improvement or prove success.
“Leveraging data allows you to make decisions with the best available information. When you can base your decision on repeatable and well-structured data, it allows you to be confident in your actions,” said Smith. “It helps you make better decisions and allows you to connect the dots to see patterns forming from the data across your organization.”
Validate your results
Now that you know what data you’re looking for and you have metrics in place, you have to make sure your findings are correct.
“Data by itself is not the truth,” said John Leiferman, TEAM’s President and CEO. “You have to ask, ‘How did it get there?’, and then validate it.”
One way to do this is starting with a small subset of your data and doing the math ahead of time, suggests Smith. That way you can get a glimpse of what the data should look like on a larger scale. This validation will give you peace of mind before you crunch all your numbers.
Understand the story
Another way to validate your data is to understand the complete story. Look at how data paints a picture of your business.
“You have to understand what is happening in your business to understand what’s happening in your data,” said Carlson. “When you look at the numbers, you also have to recognize what’s driving the output.”
Factors like the economy, the environment, trends in the industry, legislation and employee issues impact your data and help you validate it. So, it’s important to take the pulse of what’s going on inside your business as well as of outside factors.
“Data can drive important decisions,” said Leiferman, “but you have to look at it from different angles.”
Go a step further to understand the full story of your data. Don’t take it at face value. Instead, take a multi-directional approach, considering even things the data doesn’t show. For example, you have customer survey results that show a 95-percent customer satisfaction rate. The data proves you’re doing well, right? Maybe not. How many customers filled out the survey? Who didn’t? It could be that upset or disengaged customers didn’t fill out the survey, and you’re only hearing from a small subset of customers that are happy with your service. The rest? Well, you may not know the full picture. That’s when you follow up with those who didn’t participate to find out if there are any issues that weren’t reported.
Look for new ways to use your data. Leiferman noted that just asking for data as proof makes people think differently. This leads to thinking outside the box and asking more questions like, “How can we prove that what we’re doing is valuable to our business?”
“If you don’t have data, decisions are irrelevant,” said Leiferman.