At a time when information is proliferating at an unprecedented rate, companies that effectively gather, create and use information can gain dramatic market advantages over those that don’t. SMB Group’s 2012 Routes to Market Study shows that SMBs that have deployed business intelligence and analytics solutions are 51 percent more likely than peers to expect revenues to rise. Likewise, in a survey from the MIT Sloan Management Review and SAS Institute, 67 percent of respondents report that their companies get a competitive advantage through analytics.
Most small and medium business (SMB) decision-makers understand this at a conceptual level. But let’s face it—few have in-house business analysts and big data experts. Consequently, it can be daunting just to think about moving beyond spreadsheets to a more innovative analytics-driven approach.
But it doesn’t have to be. In this three-part series, I explore the journeys that three SAS customers–without armies of IT people–have taken to get more accurate, timely, usable insights for their businesses. And note: not one is a venture-backed tech or digital media start-up from Silicon Valley! In fact, all three are from traditional industries, with a combined 146 years of history behind them:
This post chronicles why these companies decided to bring more robust analytics capabilities into their organizations. In the second, I look at the key considerations that came into play in their search for a solution and how they decided which solution to use. The third post examines how analytics are helping their companies thrive and grow.
The vast majority of SMBs use spreadsheets and intuition for analysis and decision-making, even as spreadsheet errors proliferate, time is wasted, and trends are missed. So what drives some SMBs look for alternatives to “spreadsheet management?”
This quote from Albert Einstein sums it up nicely: “We can’t solve problems by using the same kind of thinking we used when we created them.” Faced with an “aha” moment that they could no longer ignore, each of the three companies we spoke with decided it was time for a change.
In 2009, Clark Twiddy, Director of Operations and son of founder Doug Twiddy, came home to the family business after serving in the Navy. He saw that Twiddy & Co. was “swamped in transactional data. We rent 900+ properties 25 times a year, with multiple and varied service transactions every week on each unit. We struggled to keep up with delivering great service to homeowners and guests.”
Twiddy must keep track of many variables. It needs to ensure each property is clean, safe and serviced properly for each visitor; optimize occupancy and rates for property owners; and negotiate better pricing from plumbers, carpet cleaners, electricians and other service providers.
As big, nationwide rivals entered the market, Twiddy recognized that “getting our information faster, more valuable, and easier for people who needed to act on it right away” was critical to the company’s future. “Keeping track of all the variables with Excel proved problematic. People sat behind desks and researched data for hours or days trying to find trends or just answer pretty simple questions. For example, it was too easy to get blindsided because we didn’t spot a safety issue that should have been addressed. The risks of unmanaged data became something we had to act upon.”
Survival of the home delivery business triggered a fresh look at alternatives at Oberweis Dairy, According to Bruce Bedford, VP of Marketing, “In 2010, we recognized that we had to stabilize and grow our flagship home delivery business, which accounts for about a third of revenues. We had to understand why customers would discontinue the service, and then take corrective marketing action to turn that around.”
At the time, Oberweis was using “very complicated” Excel spreadsheets, Visual Basic macros and pivot tables. “Although best efforts were made to figure out what was happening, it wasn’t cutting it,” explains Bedford.
Corporate QA Manager Bobby Hull and other managers at BGF had relied on individual, PC-based versions of SAS to monitor data and processes. As Hull noted, “That worked for a while, but we were growing so much, we had so much product diversity, the customer base and their demands were changing. We had to be quicker, better, faster, leaner and deliver higher quality.”
In the mid-2000s, a customer spotted a trend in a BGF product that Hull says, “We should have spotted ourselves. We had all of the information in our systems, we measured everything we could measure, but we had no good way to extract and use it.”
After investigating the issue, Hull notes that, “In hindsight, pulling the data out after the fact and looking at it, the trend was there…we should have spotted that. It was scary… these are technical fabrics going into complex, high-end industries and you can’t afford to drop the ball because it can get expensive really fast.”
As a result, BGF decided they needed “a serious way to dig into information quickly, easily and to surface it. We’d invested so much money to collect the information, but its dead money unless we do something with it.”
Data is the new business capital. But just like financial capital, you have to invest wisely to reap value from it. As these three customer stories illuminate, making the investment to move beyond spreadsheets to an analytics-driven approach generates a very positive return on investment for the business.
Is it time for your business to make this investment? Think about what keeps you up at night. Can you put your finger on the pulse of information about operations, customers and processes–when, where and how you need it? Is your business out in front of customer trends, or playing catch up? Are you able to spot potential problems before they result in lost revenues and/or brand damage? How would you re-imagine your business if you could take the pulse of key metrics more readily and easily? Thinking through the answers to these questions will help you answer this question and chart a more effective course to using data to make better business decisions and gain market advantages.
The next step is to assess internal capabilities, desired outcomes, and what you’ll need from a solution provider to reach your goals. In the second post in this series, I’ll discuss how BGF, Oberweis and Twiddy tackled this crucial phase.
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[This post originally appeared on Laurie McCabe’s blog and is republished with permission.]