Data is the lifeblood of your business

This is the third article in a series detailing the process of successfully engaging with a freelancer. The first article is here, and the second here. My previous series talked about the opportunity and the fears of small business owners when thinking about dealing with freelancers. This series builds on that one, and goes into more detail.

I might be biased, seeing as I am a data integration consultant, but I see businesses as being more about information than about money. Money is a signal of the exchange of value, but your customers choose to engage your product or service to fulfil a need (a “job-to-be-done”), and their need, their choice, and your fulfilment of that need are all important bits of information.

Of course, some information has always had to be tracked, and your business processes already include an impressive amount of bookkeeping. If you learned the lessons of the previous article, you will be working to limit the drudgery of that bookkeeping, without losing any of the information that will turn out to be vital to your business.

Consider one bit of data: the price of a product or service. Let’s say that you sell widgets. Think of the number of things that have to happen when the price of the widget changes.

  1. You make the decision to change the price of the widget based on information provided to you.
  2. You communicate the new price of the widget to the employees of the company.
  3. You change the price of the widget in your inventory systems.
  4. You change the price of the widget in your accounting systems.
  5. You change the price of the widget in your point-of-sale system.
  6. …and your e-commerce system.
  7. …and the integrations that you have with your suppliers, partners and business customers.
  8. …and in your marketing.

Now you may track the impact of the new price on your company’s performance. You may change your marketing approach (is the new price higher or lower? Do you need to reposition?) or your sales tactics.

Input:

As information flows into your company, how many times is it copied and entered into a different system? How many places is a customer address stored within your company, for example? How many times do the details of a PO get manually entered into your internal systems? The more times a piece of data is physically entered, the more likely there is to be errors.

Output:

Think of the widget price change. How did you make the decision to make the change- what were the systems that were used to provide that data? Did it take a junior executive days to assemble the powerpoint? Did someone have to open up a physical file cabinet to unearth accurate records?

After the change, how much work does it take your company to track the effect of the price change on your performance? Do you have a baseline that you can compare to (“all other things being equal”)? Again, will some recent college grad be tasked with copying, pasting, collating, charting, and summarizing all of this information, or is it available immediately to you?

I believe that your access to information is a make-or-break attribute of your business system. I think that you can analyze your business to determine what information is crucial to improving its performance. I also think that you can build tools to expose that information, in real-time, without spending obscene amounts of money. Many of those tools you can build yourself, but some will require you to engage others. If you can identify exactly where you need things built, you don’t have to spend the money to deal with a full service software consultancy. Instead, you can build your system piece-by-piece, as needed, using (relatively) inexpensive freelancers. That’s the goal of this series.

The next article in the series will look at money, which can be thought of as information, but is of course quite useful for staying in business.