All executives know data, analytics, and reporting are critical to their operations. Having a solid strategy in place — and the best software to compile the most relevant data and have it ready to share with stakeholders — are key parts of this equation. Here’s how to shore up the way your organization uses data.
It’s easy to intuit that we’re creating more data than ever, but terms such as “kilobyte” and “terabyte” make it hard to quantify exactly how much more. When one source estimated the total sum of data in the world would reach 44 zettabytes in 2020, an article published by the World Economic Forum put that figure in stark perspective: It’s 40 times as many bytes as stars in the observable universe. Clearly, ingesting data isn’t the problem — it’s digesting it that’s tricky.
In the latter half of 2021, however, that 44 zettabyte figure is long gone. Research from Seagate and IDC predicted in 2020 that enterprise data collection would increase by 42.2% annually through 2022, but how much of that data would be leveraged was far less certain. Data analysis and reporting are complex processes even under ideal circumstances, and they’re even more difficult when you have to contend with diverse management needs.
To process more data without experiencing a drop in quality or accuracy takes the right kind of technology for the specific situation. With financial reporting, for example, a data analysis tool should offer easy access to the most common calculations in addition to custom layouts and graphical representations of a variety of reports and statements. On the other hand, in the upstream oil and gas industry (where field data used to be collected manually), artificial intelligence solutions can be used to collect and process data electronically, thus enabling real-time reporting and decision-making.
Making more informed business decisions backed by the plethora of data out there is critical for business leaders, but it’s only possible if you know what data to focus on and what to push to the side.
Reading the Right Signs Within Your Data
Paying attention to the wrong data or information won’t just distract you from what’s important — it can also actively lead you astray. Prioritize the data that applies to your specific niche and helps you achieve your current corporate objectives. Return to the data at regular intervals (such as quarterly and at the end of each year) to get a better view of the big picture, and look for trends that indicate progress or problems so you can stay or alter the course as necessary.
When you’ve tuned out all the noise and zeroed in on the most meaningful data, customizable reporting resources will allow you to quickly create personal dashboards that keep board members and other stakeholders updated. When these tools are automated, information can be updated in real time, ensuring that reports are less likely to be outdated and unintentionally misleading as you’re analyzing the information.
Remember that not all data can be trusted. Therefore, when looking at reports or analytics to make decisions, ask yourself these three questions to reach the best conclusions:
- Do I have all the information available?
Lots of different types of data could inform a single decision, and if your organization is equipped to handle it, more information about your company, customers, and industry is often better than less. Having the right technology is critical when collecting all the important information available to you and then sorting and analyzing it — especially in fast-paced and ever-changing business environments. In particular, AI can play a huge role in how quickly data is received, processed, and turned into valuable insights.
- Is there enough information?
If you can’t have all the information, do you at least have enough to make informed decisions? The right reporting tools will allow you to keep a closer eye on specific kinds of data in the absence of all possible information related to your business, and a narrower focus actually offers some advantages. Too much data might complicate the decision-making process and add a degree of reporting difficulty — especially for smaller enterprises. Plus, gathering too much data can make it take longer for you to reach decisions and cause you to miss opportunities if you dwell on the data for too long.
- Where did the data come from?
If your company is generating its own data, you have granular control over the process from start to finish. Even small businesses are collecting all kinds of important information. Despite a growing number of data collection methods available, however, no single organization can have all the information. When you have questions your own data can’t answer, you should turn to reliable industry resources, other organizations, or associations. Your reporting is only as good as the data you put in, so paying close attention to your data sources is key.
The purpose of reporting is to empower the decisions that lead to a more efficient and profitable business. In fact, 49% of senior executives believe the most valuable benefit of analytics is that it helps them make better decisions. No matter what analysis tools you rely on, you should ensure they’re armed with up-to-the-minute data so you know you’re looking at the information you need in the right context. There’s no question that data analytics is more important than ever, and it will only continue to improve the operations of the companies that embrace it.
Written by Vince Dawkins, president and CEO of Enertia Software.
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