Fact vs. Fiction: Debunking the Three Most Common Myths of Data Analytics
We get a lot of questions and, quite frankly, pushback around how data analytics can or can not help middle market business leaders discover new ways to optimize and grow their businesses. This is our first attempt to address some of these “myths” or misperceptions. Join Geoff Marsh, our Business Intelligence Practice Leader, and Jack Johnson, our Nashville Practice Leader as they tackle such topics as: – “My ERP System isn’t good enough.” – “Data analytics isn’t going to give me any new information.” Plus the always pervasive… – “It’s too expensive.”
If you own or run a business, you’re probably familiar with the terms “big data,” “data analytics” and “business intelligence.” Well, these aren’t just buzzwords; they are, in many ways, the future of your company.
Although most leaders recognize this, many struggle to determine the first step to take in their own company. For them, data remains the great unknown. It’s something they’re either completely unaware of, or something they know they should be doing, but aren’t.
We are on a mission to change that.
From outdated metrics to inaccurate tracking and ultimately a lack of data-driven decision-making, we’ve seen it all. And many businesses do not prioritize or invest in data because they are not cognizant of the value it can add.
It doesn’t have to be that way. Data can add tremendous value to ANY business in ANY industry.
If you’re a business owner or leader whose decisions directly impact the bottom line and you’re looking for ways to gain a competitive advantage, good news: you’ve come to the right place. Data analytics, when used correctly, can simplify decision-making, create growth, improve profits, and drive lasting, transformative change within your company.
The data door is wide open. You just have to walk through it.
As it stands, here are three of the most common myths that prevent leaders from embracing data analytics and transforming their business.
MYTH NO. 1: MY ERP SYSTEM ISN’T GOOD ENOUGH
Many owners and CEOs believe that their ERP system is old, outdated, or simply not good enough to track meaningful data. That belief is, in a word, inaccurate. Whatever ERP system you’re using almost certainly has everything you need to track and store information – from inventory to transactions to everything in between. Granted, your ERP system won’t make decisions for you, but it will do the heavy lifting to make your job as effortless as possible.
Reality: Any ERP system can provide meaningful data.
MYTH NO. 2: IT’S NOT GOING TO GIVE ME NEW INFORMATION
I see this a lot: I don’t need data! It will only confirm what I already know! Besides, it takes years of experience to make the right call!
That mindset isn’t just dismissive; it’s dangerous.
Experience and expertise are required in certain jobs and fields, no question. But if you base important decisions on tribal knowledge and gut feel, your actions become stale and subjective, which inhibit success. Using data analytics – and applying knowledge associated with it – can drive immense value.
At AMEND, we do not view data analytics as a product, technology, or software package. We view data analytics as a tool that impacts how we make decisions. We view it as a mechanism – and a mindset – to drive change in an organization.
Reality: Data will empower you to make strategic decisions
MYTH NO. 3: IT’S TOO EXPENSIVE
Ask any business owner why they haven’t embraced data analytics, and finances will inevitably come up – and sooner rather than later.
Hardware costs! Software costs! Time! Manpower! We don’t have money for this!
Believe it or not, you probably do. Technology and innovation have made data analytics accessible and affordable. Whether you’re using Power BI, Tableau, Qlik, or Google Analytics, many programs offer free packages and platforms. And the best part? All of these programs are compatible with whatever ERP system you’re using.
Reality: Technology makes data analytics affordable.
So, in review, your ERP system is good enough, data analysts will provide new information, and it isn’t nearly as expensive as you may think.
Instead of focusing on data costs – or anything else that might be holding you back – let’s focus on data ROI. One of our manufacturing clients spends $20 a month to monitor, among other metrics, tooling spend on the shop floor. How many tools are we using? Who is using them? What are the costs associated with that? In other words, the client is tracking a behavior that directly affects the bottom line.
After eight weeks, the client had a tracking system in place. The result? An average savings of $60,000 per month.
That’s $720,000 per year.
That’s a lot of money.
Initially, this client was worried that implementing a tracking system would take forever and wouldn’t help them make new decisions. Well, it didn’t, and it did.
The moral of the story: As scary as embracing data analytics may seem, not embracing data analytics is even scarier.
So, what’s one area of your business that needs to improve? Where can better decision-making have the greatest overall impact?
You have the power to drive lasting change in your business – and you should.
The data door is wide open.
You just have to walk through it.