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How data can help grow your business

Posted on Tuesday October 02, 2018

Our own Erin Britnell explains how data can help your business.

By now, thanks to a little movie called Moneyball starring Brad Pitt, most people have heard how Billy Beane turned around a struggling Oakland A’s baseball team by using data analytics, the idea being that if you collect data on key indicators of success, you can make decisions on what tactics to use or, in Oakland’s case which players to draft, trade for, and play to be the most successful.

This concept is fairly commonplace, not just in baseball, but across all industries. Most large businesses have had analysts crunching numbers long before Billy Beane brought it to baseball.  At the Town, we are increasingly using key performance indicators (KPIs) to provide us with information on the state of our infrastructure or the service levels we are providing.

The good news is you don’t need to create an entire department to measure KPIs. Here are some tips for introducing KPIs into your business:

Ask three questions:

A good indicator answers three questions: so what, who cares, and what are you going to do about it. If it does not answer these questions, it is probably not worth the effort to collect it. 

 

Focus on outcomes:

While it is a lot easier to track widgets, hours or people, that does not answer “so what.” For example, which of these is more impactful: business A had 500 visitors yesterday, or business A had a 10% increase in visitors over the same time last year?  

Be consistent:

It is important to collect things the same way over time to make sure you are comparing apples to apples. Consistency will help you spot trends, which are more important than a single instance.

Start simple:

You do not need fancy software or a dedicated person to start. Simply take the data you are already collecting -- such as sales information or inventory records -- and start analyzing it. Excel is a great tool to start with as it can translate your data into charts and run basic statistical functions. Start with one or two indicators, then add more when you can.

The main benefit of using data analytics and KPIs is that they allow you to react to changes you are seeing in your business and implement fixes before the problem gets bigger, or keep doing what is working well. It can also help when applying for grants as you are often expected to report back on outcomes achieved from the funding.

If you want to learn more about key performance indicators and data analytics to grow your business, connect with our Caledon Business Innovation Zone (CBIZ) to get more information at www.caledon.ca/cbiz.