Manufacturing

Data, data what is it good for?

Unlock your business' full potential with better reporting

The key to your success as a business lies in your data. It’s all there: information about which products sell best, who your most profitable clients are and which staff generate the most revenue.

In the right hands, reports can be extremely valuable tools. But the burden of creating them can often be hugely time consuming and costly. So how do you go about unlocking your business’ full potential without spending half your life with your head in the books?

In this feature we discuss the challenges faced by growing businesses and what you can change to improve the accuracy, efficiency and timeliness of your reporting. 

Get started fixing your reporting

In this feature on reporting, we hope to provide some knowledge regarding how to improve your business reporting.

Why you need better reporting

Why you need better reporting

Frequently, we talk to owners and managers who understand the need for better reporting but find that they simply can’t extract data from the corners of the business quickly enough to be able to react appropriately. In today’s fast moving commercial environment, that’s a serious barrier to success.

Hindered by siloed systems and spreadsheets, they are forced to make critical decisions without knowing how those will impact the business.

Spreadsheets: From hero to zero

Do you still use spreadsheets? You’d be hard pushed to find a business in Australia or New Zealand that doesn’t. Since 1985, Microsoft’s spreadsheet application has provided the admin backbone for many start-up businesses, including – quite possibly – yours.

But Excel’s universal appeal is also its downfall. It's so easy to start adding data to those little rectangular boxes! The more data you pile into a spreadsheet, the harder it is to extract it. Excel is entirely dependent on manual input, which makes it prone to errors and duplication making it slow to update.

That may be acceptable when you’re a fledgeling start-up. But for a growing business that needs accurate real-time reporting and a watertight audit trail, spreadsheets are simply too unreliable.

Too Many Systems, Too Many Sources of Data

Spreadsheets aren’t the sole culprit of course – far from it. The intrinsic problem faced by many mid-market businesses in Australia and New Zealand is that as they’ve grown, their business-critical data has become fragmented around the organisation in a number of different computer systems, databases and worksheets.

Sound familiar? If you’re currently using a small business accounting solution alongside a number of third-party add-ons like job costing or CRM then you’ll know exactly what we mean.

Individually, each system does its job, and in some cases does it very well. But as soon as you decide to report on a company-wide basis, the scale of the task becomes apparent. The only way to achieve a joined-up view of your organisation is to manually consolidate data.

The trouble is that a number of issues come with this approach.

Common Data Issues
  • Reporting is time-consuming and often tedious
    • You can’t respond to change as insights are hard to attain
       
  • Data is rarely 100% accurate, it's hard to see what products are selling well

  • The data is often out of date, so you can’t track sales accurately
    • Due to manual data entry, you have no real-time or up-to-date view sales
       
  • Data formatting is inconsistent
    • Data in the wrong fields
    • Not conforming to set standards
    • Bad data
    • Meaningless data – e.g. symbols
       
  • Duplicated data is driving your accountant crazy

  • Data is held in different systems
    • You can’t accurately report your performance
    • Its slows down decision making as leaders have little confidence in the data
Visibility for everyone

Visibility for everyone

Thus far, a lot has been made of the need for management to have access to the right data where and whenever they need it. The truth, of course, is that it’s not just the ‘suits’ who benefit from improved visibility. Anyone – whether they work in marketing, sales, finance, HR or another function should have access to the reports they need. Why? Because it saves time and boosts efficiency.

A lack of visibility for staff often manifests itself in the following issues:

  • Missed reporting deadlines
  • Spending more and more time combing through worksheets and less time actually doing the work
  • Staff get micro-managed due to a lack of insight into performance
  • Struggles making sense of reports

If you’re spending all your time gathering data, then it may be time to make a change. Crucially, it should allow you and your teams the tools to report on any aspect of your business, helping you:

  • make informed decisions more quickly
  • save time and money, by eliminating errors and time-consuming processes
  • operate more smartly
  • improve performance and results

The right system won’t just open the data floodgates. Instead, it should allow you to control the amount of data that’s available, turning lines of data entry into to useful intelligence. Ultimately, it’s about giving users access to the information they need to do their jobs properly. And that’s good for the whole business.

Four-steps to improving reporting

Four-steps to improving reporting

Here are is a four-step process to improving your reporting. It starts with improving your data, then focusing on your processes, planning your analytics and making sure you plan to review it. Regularly.

data-processes

A simple 4-step process to improve your reporting.

Data

When it comes to data the key is having the right information.  

  1. Decide what data you need and prioritise the must haves versus the nice-to-haves
  2. Define and implement standard data management practices
  3. Plan to store data in a central repository so the business has the ability to share data and enter data in the one place
  4. Go paperless to reduce data manual entry
  5. Don’t gather too much too soon, walk before you can run
  6. Prioritise having visibility into data, invest in mobile tools so data can be entered on the go

To implement an insightful reporting program you need streamlined reports that gather data and translate it into actionable information. It also needs to be functional for business leaders with a limited technical background.

Our advice?

Automate, automate, automate… you want to make it easy 

Automating removes a huge burden on an administration team because they no longer have to manually collate data. Making the shift might require moving away from disconnected systems and software like Excel or pure-play accounting software, but the effort will be worthwhile.

Focus efforts on creating regularly updated dashboards ... and make them visible

Dashboards are a great tool to report your organisation's progress towards goals or simply reporting performance. Making dashboards visible throughout the business ensures the entire organisation has visibility into a near real-time view of business performance. 

Investigate business intelligence applications to create insightful reports 

Business Intelligence applications streamline the automation of reports and make it easy to create insightful reports, more often than not they offer mechanisms to regularly update live data. They also offer the ability to view data in the cloud or from a mobile device.

Processes

When it comes to processes there is a myriad of ways to improve them, here are three quick suggestions to help identify and improve the data processes in your business.

Identify the most critical processes

You need to know what to improve before you can set about improving it. It’s about identifying all the processes in your business and then rating them in terms of importance.

The rating system used will vary by business and industry, but there are some key questions that would be relevant to anyone:

  • Does improving this process increase revenue or decrease costs?
  • Does the process have an impact on your customers?
  • Would it improve staff morale and potentially reduce turnover?
  • If I don’t improve this process, what happens?

Map out the processes you want to improve

Now you’ve identified the most business-critical processes you want to improve, which means you need to map out all the steps in that process and who is responsible for it.

For simpler processes, the recommendation is to map them out using Flowcharts. For more complex processes a Swim Lane Diagram allows you to map out numerous steps and touch points in a process. Once mapped out, these diagrams will show you the steps in the process visually and allow for open discussion with the staff members involved in the process.

Every phase within the process needs to be explored in detail to not only understand each step, but to also identify sub-steps that may be present. You may intend to improve one process, but if it directly impacts another, the processes need to be put into relation to each other in the diagram to ensure any changes within a main process take changes within any related sub-steps into account.

It’s strongly recommended you include all staff members. Don't limit this scope to those performing the processes, include anyone affected by the change. This way you ensure you don’t overlook anything and also garner buy-in from everyone involved.

 

Flowchart

 

Flowcharts are simpler to create and easy to understand. 

Swimlane

 

Swim lane diagrams are great for processes that involve several people or groups within the business.

Investigate how the process can be improved

Knowing what the most critical processes are to improve and knowing every step of that process puts you in the best position to start to improve it.

Firstly you can try to streamline steps. Look for steps within the Flowchart or Swim Lane Diagram that can be removed from the process without impacting the outcome.

There are some processes you may need to bypass. These processes are often there because ‘it’s always been done that way’. Once you’ve mapped out the process it becomes clear which processes are simply ‘red tape’ and which ones are core to the business operation. If you can bypass a process entirely and still get the same result, do you really need that process?

If you’re going to bypass a process however it is recommended to remove that process over short periods of time to ensure its removal doesn’t impact other processes you may have missed when reviewing your core processes. Make sure that you are able to quickly implement that process again if any issues arise after its removal.

Bypassing ‘red tape’ processes usually results in lots of small efficiency gains. Bypass enough of them and you’ll see some substantial improvements across your business.

Analytics

Data can be defined as “facts and statistics collected together for reference or analysis”. Information, on the other hand, is “communication or reception of knowledge or intelligence…”. The difference is data is only facts, information is the translation of data into insights. Data alone doesn’t help you or your business leaders make better decisions or spot trends. 

This is the value of analysis and it is one of your most important tasks in the journey to better reporting. Investing the time and resources to building insightful reports that analyse your business data will deliver reports decision makers can easily access to get quick answers to specific questions.

Review 

One of the fundamental steps businesses forget is to plan regular reviews of their new processes and procedures.

We encourage planning regular reviews and then updating or adjusting your approach based on your review making changes where appropriate.

Improvement needs to be continuous and ongoing to have the most impact. As your business grows, technology gets more sophisticated, and customer demands change, your processes must also evolve to keep pace.

Summary

If you’ve done all this hard work to improve your reporting the last thing you want is a system or software that can’t cater to this change. In our experience, a connected system that enables your team to follow processes in an organised way and one that features strong, customisable reporting tools will release the shackles from your team.

When a business has disparate systems and multiple processes without regulation, it’s all too easy for some staff members to begin to perform half the task, or worse circumvent them entirely.

A review of your entire reporting process and system is not something that you’ll do often. Use it as a growth experience for you, your team and your company. Don’t just take the old and try to do it in a shiny new way. Take the opportunity to reinvent and improve the way you do things.

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To gain more insight into improving reporting, talk to a MYOB consultant.