In the digital age, gathering electronic data and using it to improve your business has become a necessity. Metrics as diverse as employee retention rates and customer feedback can all be quantified and tracked in real time. So the first step to creating a data-driven company is implementing procedures and technology to gather all this data.
There are many options when choosing an approach to data gathering. There are several different types of data gathering strategies and a multitude of software products tailored to each one. Therefore, it is important to develop a strategy for gathering data that will work for your specific business.
Enterprise resource planning (ERP) is one type of data collection that focuses on managing business functions. The goal of an ERP is to improve the operational efficiency of business resources. They key is integrating all business functions, from product planning, to supply chain management, to financials, all into a one or two-tiered software system. For example, payroll might be automated as part of an ERP.
While an ERP can be thought of as back-office data, customer relationship planning (CRP) can be thought of as front-office operations. CRPs deal with customer interactions, both sales and service-related. The information tracked by a CRP includes clients, contacts, leads, and more. Essentially, this software collects data about customers and your interactions with them so you can better understand and serve them.
A third area ripe for data collection involves web analytics. All companies now have some form of web presence, whether that is limited to a simple website or as large as a digital platform. There is plenty of software available to monitor web metrics such as Google Analytics, Omniture, Mixpanel, and KissMetrics. The trick with these applications is to make sure you are tracking only pertinent data, lest you be inundated with useless metrics.
It can also be beneficial to introduce sensor data gathering, especially in manufacturing companies. Internet of Things (IOT) technology enables machine-to-machine data sharing which, in turn, allows you to better track the flow of goods. One example of this is radio frequency identification (RFID) tags. These can be thought of as the “intelligent” brother of UPC bar codes. They communicate with an electronic reader that is connected to a large network, making it easier to track physical products from the shelf to the customer.
Customer feedback is also an important area of data gathering that should not be overlooked. One way to track this is by checking your net promoter score (NPS). This score aggregates how likely a customer is to recommend your company to a friend or colleague on a one to ten scales. Low scores come from what is called detractors (unhappy customers) while high scores come from promoters (loyal enthusiasts). The middle scores are passive, customers who are satisfied but do not add to brand reputation. Tracking this sort of customer feedback gives important insight into whether a company can expect its reputation to improve or decline in the future.
Now that you are collecting all this data, the next step will be to analyze it. We will be discussing that in our next installment of the Thought Leadership Series: Analyzing Data.