Data is only useful when it tells you what you don’t know, but often while the data is there the insights gathered from it fall short. Is your startup struggling with this? Don’t worry, you’re not alone. Every organisation wants to be ‘data-driven’, but how do you get there?
The business benefits of using data intelligently are well documented – providing a better customer experience, helping to make better product decisions, contributing to effective business planning, and much more. However, an abundance of data can be intimidating and contribute to staff feeling overwhelmed when making decisions at work, as our recent survey found.
Fortunately, there are tools and strategies that startups can adopt to make data a little less intimidating and a lot more useful.
Use the right tools
Rule no.1 – stop manually sifting through thousands of rows and columns of data in Excel. The Excel spreadsheet can be useful in some cases but is limited in scalability, ease of use, and, with remote working the new norm, version control is a full-time job. These are not the features you want to sacrifice, nor can you afford to sacrifice.
There are much more advanced tools that can be used, and you should take advantage of them. Companies should consider tools for data warehousing, data visualisation, or tools that can be used by data scientists that can be used by data scientists to track resources and help companies to keep an eye on cost.
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Financial reporting is something NetSuite is commonly used for, as well accounting and business management.
Dave Rosenberg, head of marketing and business development and private equity EMEA for Oracle NetSuite, says: “Go take an online class in data science or whatever it may be, because you can very quickly see the gaps in your business where you don’t understand, whether it’s forecasting, inventory or something else.”
Integrate data analytics from the start
Utilising data from an early stage is vital. This not only will help you in the long run but also it will help you when looking for investment. Investors will often take a long-term view of a company.
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When presenting financials plans for the next few years – present your data. It’s important that investors see that companies can utilise data. This helps to demonstrate current and potential future growth based on different data-based scenarios.
Without a good financial plan of how to grow, and the right data to see how you’re growing,
investors are unable to make an educated decision on whether to invest.
USE the data
One of the biggest problems with data is that while many companies gather data, most don’t know how to utilise it.
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For some businesses, it’s a problem of scale, with large companies struggling to source and use their data because of it. For others, not enough data is being collected. Data should be collected even if there are no plans in place to analyse it immediately. Data can often become useful at a later date, however, if it’s not collected from the get-go, the opportunity is missed and there’s often no going back.
Data analysis and management has become more commonplace in business operations in general — which means it’s easier for companies of all kinds to follow suit. “What was once a trade secret has become so commonplace that everybody should do it,” says Rosenberg.
Wow your investors
Speaking of investors, it’s unlikely they will be won over without the numbers. The numbers show where your business is, but more importantly, where it is going.
Investors are often looking for a strong business model and an understanding of the different scenarios that could happen – even if some things are a little harder to predict than others. By providing different scenarios your organisation is aware of a multitude of things that could happen, leaders are more likely to spot warning signs of potential challenges and respond accordingly.
Businesses should aim to understand factors which impact them. Consider consumer behaviour and product development through the use of data. Keeping investors in the loop about what decisions are being made and how data is playing its part is an important action to take.
For some businesses, the people and tools needed to gather and use data successfully depends on the stage and position of the business. Investing in data may not always be required, but if the business requires complex decision making, then it is better to hire people and invest in tools that can source data for the business.
That doesn’t necessarily mean that you need to have an entire data team within your business. It is possible to outsource the data, with your internal management team partially managing the data sets by using the appropriate tools. Over time the business can then grow the team and tools at its disposal.
If you want to learn more about how you can use data to take your startup to the next level, watch this webinar. You’ll hear from a panel of experts including, Dave Rosenberg, head of marketing and business development and private equity EMEA for Oracle NetSuite, Melissa McCracken, an investor at cancer therapeutics focused VC Nextech Invest and Tatiana Okhotina, chief financial officer at money transfer service Azimo.