Driving Decision-Making with Data
How Business Intelligence can help service contractors save time and protect margins.
Data allows you to dig deeper into the inner workings of your security or janitorial business. But, just having access to the data doesn’t do much until you interpret what it actually means. Once you do that, you can put that insight into action to drive smart 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 key questions you have. For janitorial contractors, you want clarification on your budget variances. For security contractors, you want to know how you can identify your unbilled overtime. Then, look at the data to see what answers you can find.
Structure Your Data
Knowing how you want to view your data is tip no. 2 from our data experts. For some businesses, pre-built reports get you the information you need in the least amount of time. For others who need custom reports, using a tool like Business Intelligence (BI) from TEAM gives you powerful analytics right at your fingertips.
“Every company I work with has a slightly different way they want to see their own data,” said Ron Smith, Business Intelligence Analyst at TEAM Software. “Every data owner needs to have an idea of the answer they are looking for and the level at which they want to find the answers. And with BI, you can structure the data the way you want to see it, saving you a significant amount of time.”
Think about a simple financial statement. A great overview is a year’s worth of data, by fiscal period, for companywide data. Yet, if you could easily slice it down to the job or region level, you could uncover issues you might not otherwise see. Consider changing the time period to look for trends. Try year-to-date, year over year or even just quarterly data to see what pops up. Then, put that all that information automatically into one report that’s sent to you periodically. The objective is to find the way to let your data allow you to manage your business more efficiently. And, for busy janitorial and security contractors, the process needs to be repeatable, sustainable and most importantly, easy.
Have Clear Metrics
Once you’ve put your data structure in place, you can determine your goals and metrics. This helps you understand whether your answers gleaned from the data meet the goals you’ve set. For janitorial and security contractors that might revolve around a goal to maintain a certain percentage of profit margin by job. By looking at the job-level profitability data, you might discover 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 must make sure your findings are correct.
“Data by itself is not the truth,” said John Leiferman, TEAM’s 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 Whole Story
Another way to validate your data is to understand the complete story. Look at how data paints a picture of your entire business.
“You have to understand what’s 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.
Learn how one TEAM client is saving time and using data to drive decisions in our latest case study.