Guest blog post by Bala Deshpande from Simafore.com
Spreadsheet death is a serious malaise that can affect many SMEs! We are of course referring to the “death” of data and the loss of business efficiency that can result from an over reliance on spreadsheets for data management. As SMEs face stiffer competition, effective data management becomes a key differentiator for companies. Data driven decision making is what will keep SMEs competitive in the future. How does an SME inoculate itself against such problems? It turns out to be a three-step process as described below.
As a first step, data silos need to be broken down or at least interconnected. What this means is that information owned and used by various business functions must be made seamlessly available through out the business. For example, the data that inventory management relies upon could be made available for accounting and vice versa (with proper safeguards). An ERP system which integrates accounting software and inventory software, of course makes this task easy.
Leveraging data for increasing competitiveness does not stop here, but actually begins with a proper ERP implementation. The good news is that SMEs which have successfully set up ERP systems are now actually sitting on gold mines of information and can leap over competition easily.
Unfortunately, today less than 25% of SME executives (in the manufacturing sector) are fully aware of the possibilities to leverage the data treasures they own. Many are still under the impression that spreadsheets and canned reports constitute Business Intelligence (BI). BI projects can help with identifying Key Performance Indicators (KPI) that affect business and set up processes to measure them. BI dashboards and reports are thus the second step after ERP systems.
According to CIO magazine, BI is not designed to iterate on new scenarios or for immediate response to unanticipated questions. BI has evolved to automate the production and distribution of standardized reports that monitor pre-determined KPIs. BI traditionally stops at delivering the report to the business user and the business user typically takes the data in the report and dumps it into a spreadsheet in order to do their own analysis, in an ironic twist to this battle!
This is where Business Analytics comes in and is the third and final step. SMEs now can harness their ERP investments to wisely leverage the data they are already handling. In today’s hyper connected world, the challenge is being able to quickly respond to a change in the market. Companies should be able to quickly shift resources to where they are needed so that they don’t end up with an overstocked inventory of yesterday’s hot item. Other key areas where analytics can help SMEs are customer profiling, acquisition and retention. Ultimately, with analytics companies can achieve the efficiencies needed to compete in today’s market. The key is to know what data and analytics processes are best suited for a given business.
About our Guest Blogger:
SimaFore helps small and medium businesses deploy the right analytics for the right problems and convert data into information assets. Their vision is to help businesses remove the complexity involved in applying and deploying analytics. To make analytics accessible and affordable to anyone who has data.
Bala Deshpande's has 20 years of experience in using analytical techniques. He founded SimaFore after 8 years at Ford Motor Co, analyzing data from automobile crash tests and helping to build safer cars. More recently he has been instrumental in promoting information theory based analytical techniques for a range of applications from performance measurement in organizations to predicting patient stability in ICUs.