Guiding a business to success is largely based around making decisions to steer the business in a certain direction. These decisions have a profound impact on whether the business takes off or withers, and there isn't a finance manager out there who makes these decisions lightly. Data can provide the foundation for making these major choices. While there are many ways data empowers a business, here are three top ways it can be used:
1. Data allows a window to see the what works in a business (and what doesn't).
By looking through the data collected on a project or aspect of the business, it can be laid out simply, in hard figures, what went into a venture, and what the result was. By doing this, effective practices in the business can be identified and further developed, and ineffective practices that waste resources can be eliminated or improved.
2. Data can be collected over time, organized, and used to identify patterns.
These patterns can be used to predict important trends, or know what to expect for the business during certain times of the year, or following certain events, such as the launch of a product.
3. Data plays a key role in planning and budgeting for a business.
Collected data can reveal hints at the future for the business, playing a key role in determining when investments and expansions should be made, and when the business should be more conservative.
The value of data is that it provides information to make educated decisions for a business that are balanced with fact. Knowing where the business has been financially is a large part of knowing where it is going and how to get there. Data provides an impartial look into the past, a summary of the present and a prediction for the future.