Data-driven decision-making: it’s more than just a buzzword. Businesses, both large and small, make decisions every day that can either propel them forward or set them back. In today’s economy, it’s vital to be agile, ready to anticipate potential issues, and take action at any given moment. Business owners have tools at their fingertips to make well–informed decisions based on their past, current, and forecasted data. If you’re not already using your own data to make business decisions, it’s time to understand how to implement data-driven decision-making in your business.
What is data-driven decision-making?
Data-driven decision-making is the process of utilizing your business insights—data, reports, trends, and facts—to make strategic business decisions. Business owners are gathering valuable information on a daily basis that can be used to develop strategies that allow you to reach your goals faster with fewer setbacks, and remain agile in a forever-changing market. By harnessing insights from inside the business, decision-making becomes less of a guessing game and more of a strategic move.
Data-driven decision-making is more than just analyzing data. It’s empowering you as a business owner, and your team, to use the information already within the business to make decisions about everyday work, and weekly, monthly and yearly goals. In return, data-driven decision-making can help improve cash flow, reduce unnecessary costs, and keep you ahead of the market.
The metrics and data points you use will be heavily dependent on the type of business you’re running. The key to data-driven decision-making is having your company’s information organized in one central hub, allowing you to view the overall picture of your company’s finances, budgets, history, future projections, and current financial position.
What can data-driven decision-making do for your business?
Making business decisions is one of the most important aspects of being a business owner. Without even realizing it, many business owners are making business decisions that can either propel the business forward in the right direction or set them back. Without the proper data to support business decision-making, it can feel like a shot in the dark resulting in a missed target.
Data-driven decision-making can be implemented throughout your business, regardless of size. As your business grows, data strategies can be used across departments, keeping business functions aligned as they are backed by the same data. From finance and sales to human resources, all departments can benefit from this approach that saves time and money.
When real-time data from inside the business itself is being used to make decisions, the guessing game shifts to a well-informed decision.
How to implement data-driven decision-making into your business
If you’re ready to make the shift from the guessing-game approach to a well-informed process, it all starts with getting organized and automated. For many of our clients, this happens with the adoption of cloud-based accounting apps. In some ways, shifting to a data-driven decision-making approach is a welcome side-effect of adopting cloud-accounting tools, such as Xero.
When a business migrates to the cloud, all financials are stored in one central hub. Business owners can view their business’s financial insights from a use-friendly dashboard that provides real-time insights at any given time. In most cases, the process of imputing transactions and other data can be automated, saving you and or your team valuable time, while reducing the chance of human error. There is no need to spend hours collecting financial data from various sources in order to put together a report. Instead, you have all of the data you need to make well-informed business decisions with the click of a button. As the business grows in size and complexity, Xero and its companion apps have the capability to scale.
Need to make cost-cutting decisions? View your expenses as a whole, per product or service, to see a breakdown. With the data on hand, you can pinpoint cost-saving opportunities, compare actual data to budgets, and highlight areas that may be holding you back from a greener bottom line.
Ready for data-driven results?
We have worked with hundreds of small business owners to implement tools to take their businesses to the next level. As a business owner, you will feel empowered, making data-backed business decisions that move your business forward, saving you time and money. Contact our team to schedule a consultation to discuss your current processes, goals, and areas of opportunity. We will work with you to adopt cloud-accounting tools, and teach you how to use the information on hand to make well-informed decisions.