Business analytics: What’s all the buzz?
by Carroll Boysen
Carroll Boysen is marketing manager for Empowering Systems Inc. Boysen can be reached at firstname.lastname@example.org.
“What gets measured, gets improved.” A quote from famed management consultant Peter Drucker has never been more relevant than today, but it doesn’t tell us the whole story. The quote is from long before the era of big data, business analytics software and the information overload we face today.
Data analytics, typically shortened to analytics, is not a new concept. In the 19th century, the U.S. government would spend almost 10 years collecting and analyzing census data, completing just in time to begin collecting data again. Henry Ford applied measurement and time studies to perfect the assembly line. Manually collecting and analyzing data was an expensive venture and only justified in certain circumstances.
Computer technology began to make analytics more readily available, although it was still quite expensive. Computers filled rooms and took teams of people to keep running, hard drives stored a few megabytes of data and were incredibly slow. Innovations like relational databases paved the way for more widespread use of analytics.
As innovation accelerated, desktop computing put tools like spreadsheets into the hands of small businesses. Now, businesses of all sizes could perform rudimentary analytics and sort their data without programming. The birth of the internet drove further innovation in big data. Search engines could scour the internet and store the results ready to answer questions in milliseconds. Data storage became very inexpensive with computing resources becoming the driving factor in cost. Now anyone with an internet connection can pull data and use spreadsheets to analyze data. The Excel Pivot Table was born. How can it get any better than this?
Cloud computing or “The Cloud” is where the innovation is happening today. Business application software vendors are just scratching the surface of what these new analytics tools can do for small businesses. Cloud-based APIs (application program interfaces) for artificial intelligence, machine learning, data aggregation via ETL (export, transform, load) are all technologies that software companies are leveraging to provide manufacturers’ representatives with business analytics tools that were once only available to the Fortune 1000. Never have we had access to more applications that are just a click away, Business Analytics and Business Intelligence software included. The tools alone don’t make the whole story. First, you must make sure you are analyzing the right data.
Leadership in the manufacturers’ representative firm should first determine the primary metrics or key performance indicators (KPIs). The KPIs should be aligned with the firm’s business plan and be customer-focused. Companies should spend time defining their customer.
Is it the company you sell to or the company you sell for? Make sure the metrics align with your customer. Also, KPIs must be continuously evaluated as business climate changes.
Give managers the analytics tools they need to measure and manage with these metrics. Managers should not simply manage these metrics without additional consideration and should refrain from simply putting the business on autopilot. In many small businesses, the leaders and managers are the same people, so they must play both roles. This is easier said than done. Now armed with more than instinct alone to achieve the business objectives, managers have another advantageous tool.
Business analytics can help you run your business when used to manage the right KPIs. It can give you an unfair advantage when used right and be a disaster if used wrong.
A great example of this advantage is how a professional baseball team portrayed in the movie Moneyball used analytics to turn scouting and recruiting on its head. The old inputs no longer produced the appropriate outputs.
Applications like customer relationship management (CRM) and sales/commission management are invaluable tools to run your business, particularly if designed for manufacturers’ representatives. CRM can help you foster strong long-term relationships with the customers you sell to and the principals you sell for by providing prompt and effective customer service and should be one of the sources for business analytics. Sales/commission management software can help you roll up your data to the end customer and distributor across all your lines, help determine compensation and much more. It should also be a source for your business analytics. You may have other systems that can be a source for these analytics.
Your team is probably managing opportunities, tracking design wins, importing commissions and more. Are you really maximizing your return on investment for all this work? There is value hidden in the data just waiting to be found and analytics can help you find it.
Who is my highest ROI principal? What is my largest growth market? What trends can help me predict future commissions? Which salesperson has the best pipeline? What design wins dropped off last month? The list goes on and on, and while the questions are important, the visibility into the data will answer questions you did not even know to ask or were possible to answer.
- Analytics gives you data visualizations that help you make decisions based on facts, not on instincts alone.
- Analytics lets you pull out hidden data like profit-maximizing markets, drop-offs, and trends.
- Analytics allows you to slice and dice the data to extract insights that give your organization a competitive advantage.
- Analytics gives you findings to share with team members and manufacturers, keeping everyone focused on the goals and KPIs.
Sounds good, right? But who has the time? Where do you start? Can you afford it? Empowering Systems has taken the bulk of the work out of analytics. AccountReporter Analytics has preconfigured dashboards for electronic manufacturers’ representatives so you can skip over the work and dive right into growing your business right out of the box at a price any rep firm can afford.
Do manufacturers’ representatives really need analytics? The answer is 100 percent yes. They need analytics because it gives them a higher return on the data they collect, gives immediate feedback on KPIs and visibility into their business in the past, present and future.
Today, manufacturer’ representatives cannot afford to miss out on the advantages of analytics. Measure what you want to improve so you don’t have to run on instinct alone.
About Empowering Systems
Empowering Systems, an ERA Recognized Resource, has been developing business-enhancing solutions for manufacturers’ representatives for more than 20 years. It develops cloud-based sales tools that empower manufacturers’ representatives by streamlining administrative tasks and surfacing data they never knew they had. It allows them to focus on increasing sales/commissions and offering outstanding customer service to both their customers and the principals that they represent and provides a deeper understanding of technology trends.