The ability for companies to mine their data and drill down into the details to understand what is working versus what needs improving was certainly important and valuable to most firms pre-COVID19.
But now that the entire global economy has been turned somewhat upside down, the need for effective business analytics has suddenly become more critical than ever.
Why is this?
During times of crisis or economic instability, businesses often need to shift, sometimes drastically. Lots of questions need to be asked. Do we focus solely on cutting our costs? How will that impact our ability to deliver our products or services? Do we focus on certain core silos within our business, pull back or shelter others? Which ones? Do we launch any new products or services at this time? Which ones? What might that cost? And can we even afford to invest in such new initiatives? And so on.
Back in the “Pre-Analytics” days, most of these discussions and resulting decisions would be made using nothing more than a gut feeling approach. Sometimes the end strategy was agreed on by a Management team (by consensus), and more often than not the gut feeling was that of one individual, at the head of the company. With the rare exception (visionary leadership), this would now be considered a very high-risk method for making decisions.
Introducing analytics changed all that and for many years now firms have had the ability to make sound strategic decisions based on actual data found within the organization’s infrastructure. Metrics could now be established, with historical, actual and projected values nicely lined-up for comparison. Trends become evident, opportunities discovered and sound strategies could follow suit. However, all this activity tends to move along at a relatively steady, often slow pace. Trends or tendencies might normally be established only year over year, or quarter to quarter, allowing businesses ample time to study their data, make decisions and implement their strategies in a calm and orderly manner. When business is thriving, these metrics may even be neglected for periods of time because, simply stated, “things are going well”.
But when a crisis hits, fast and furiously, like the Financial Crisis of 2008 or the Pandemic of 2020, look out!
Suddenly these annual or quarterly trends established over the years have no bearing whatsoever on what is happening today (i.e. in the current quarter or for the rest of the year at least). This seismic shift in these long-established metrics is now being felt in monthly and even weekly buckets. And an organization that wishes to be nimble, proactive, and reactive, with actual data (not by gut instinct), needs real time information and dynamic analytics – NOW!
Revenues, costs, overhead, operations, manufacturing, etc. all need to be looked at concurrently, and in great detail, which can feel like a very daunting task. With the wrong (underperforming) analytics tools, the pull towards the old “gut feel” tactic can be strong, leaving companies prone to making non-data- driven assumptions and exposing them to erroneous decision making at the very worst possible time. But with the right analytics tools, where data is current, clear and easily accessible, and accessed via a user friendly interface, companies can become very nimble, improve their efficiency, and react strategically and swiftly, even under the most volatile of conditions.
While cost cutting is certainly never a poor strategy during a crisis, the most progressive firms demand to know if, among the chaos, there are opportunities to help them not only survive the downturn but even to thrive despite it. And those valuable tidbits of opportunity are always buried within their data. If the tools to access and leverage these valuable insights are not already in place, this is one area where the smart companies prefer to make that investment, even during a pandemic. The potential for payback from understanding the levers that drive a company, in good times and bad, is immeasurable. And without it, gut instinct (aka “flying by the seat of your pants”) is all that is left which, too often, is simply not good enough.
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