It’s sometimes difficult to give your business a critical evaluation, but when you’re aware of an actual or perceived weakness, you have an opportunity to take corrective action and turn that weakness into a strength. It’s essential, then, to perform a recurring objective self-evaluation, whether you’re in the startup phase, trying to build value or planning an exit strategy, and one of the most effective ways to do so is to use the power of data. Every business collects data that can be used to identify opportunities for improvement, whether financially, operationally or from a human capital perspective.
To perform an accurate analysis, you need to first ensure you’re collecting the appropriate data in an organized, timely and digitized manner. In a 2019 survey of 1,300 business leaders, 90% of respondents felt that every organization would need to extract value from data to be successful in the future. It’s widely recognized, though, that the overwhelming majority of data produced each day is “dark data,” information that cannot be used either due to its structure (i.e., the data is not collected, processed or stored in a way that can be accessible) or that the organization is not even aware that it’s collected.
The key is to minimize the amount of dark data your company produces. This will allow for a more robust and impactful data analytic program, the process by which your organization utilizes data to objectively evaluate the business from all aspects. When used correctly, data can help improve efficiency, productivity and profitability. It can also help build value, which is important in every stage of your company, particularly in planning for an exit strategy. This is ultimately how any buyer will view your company, and the sooner you become data ready and implement data analytics, the sooner you’ll be able to identify trends, outliers and abnormalities that you may not have identified before.
When you collect, process and store data appropriately, you can also automate reporting and analytics, so you spend less time compiling analysis and more time interpreting results and planning your action.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.
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