Most people outside of accounting and finance don’t get that excited about ERP data and analytics. Throughout your career, you’ve likely been subjected to eyes glazing over at a cocktail party when you’ve mentioned that your day job is in finance. But as a CFO, you know that while your ERP data might not make for very good small talk, the smallest nuances and trends in that data make for excellent keys to profitability.
Data drives an increasing number of business decisions in the digital age, helping companies like Amazon and Uber transform the business landscape. It’s not just large enterprises that can benefit, though. Small and mid-sized businesses can reap the benefits of big data from their ERP too, if they know how to use it.
More Meaningful Results
Getting data in your ERP isn’t difficult at all. As your ERP gathers data, it allows leaders to see the complexity of patterns and correlations that describe the various aspects of the company. But as you probably know from working with your ERP data, just having the data isn’t enough. You need to be able to do something with it.
To gain meaningful results, CFOs should focus on these five keys to achieving greater profitability through data analytics:
- Ask the right questions. Looking at end results for sales, customer retention rates, or revenue is informative, but these metrics are purely descriptive. Use the ERP data to get deeper into the details: What drives customers’ decisions to purchase or not purchase your products? Is it advertising, brand loyalty, or price? Who are your most cost-effective vendors? Which products have the highest rate of complaints and returns? Narrowing the questions allows the data to reveal detailed relationships that form the basis for actions.
- Use appropriate data. Most businesses struggle with an overabundance of ERP data, and rarely too little. To discover meaningful patterns, narrow your focus to evaluate specific data elements. Identifying operational inefficiencies needs an entirely different set of data than the metrics you’d use to understand customer wants and needs, determine how to deliver the right information at the right time, or evaluate market trends. Finding answers to some questions might require you to first manually integrate information collected by your ERP and other systems, especially if your company's business management tools are more siloed.
- Leverage specialized skill sets. Because big data is, well, big, it’s important to apply the right tools to maintain data integrity and ensure an optimal analytic approach. While existing staff could probably find useful patterns, getting maximum value from data means calling in true experts. You might choose to outsource advanced data analytics or to bring in external consultants. Midsized and larger companies may prefer to invest in a permanent in-house analytics team. Whichever route your company chooses, you’ll be well served by experienced analysts who can apply appropriate techniques for parsing the data.
- Push beyond descriptive analysis.To change outcomes, it’s important to understand what is causing the patterns the ERP data describe. A careful examination of the data will show you what is happening. The more important question, though, is why these things are occurring. What is likely to happen in the future, and what should you do about it? Using predictive and prescriptive analysis, data-savvy professionals can uncover key insights to inform business decisions that boost the company’s bottom line.
- Take strategic action. Formulating a response to new information is the real test of leadership. How much change can and should the business embrace, and how quickly? Which risks are the most urgent? Which opportunities are the most time-sensitive? Will adapting to leverage an anticipated scenario create long-term benefits? Numerous questions like these arise from the answers data analytics provide and resolving them wisely demands sound judgment as well as an intimate familiarity with the unique business context.
Cut a Path Through Your ERP Data With PositiveVision
From identifying new markets and meeting customer expectations to managing risk and capturing time and dollar savings, data analytics holds the potential to revolutionize how CFOs and other leaders navigate the daily challenges of running a company. Finding a clear path through an overwhelming volume of information can be challenging. But the payoff for those who persist and make changes in response to their findings is a significant improvement in market positioning and profitability.
Whether you’re looking to add an ERP, upgrade an existing one, or better leverage the one that you have to streamline processes and provide the best big data for analysis, PositiveVision can help small and mid-sized companies find the right business software. Simplify processes with an integrated ERP system, find a better accounting software to help analyze your ERP data, or get the business reporting you need out of your current ERP system. No matter what your needs, let PositiveVision help you achieve your goal. Contact us today to get started.