Convert Data Into Information
After over a decade in the software business, I fall into the trap of talking about data. If offered the choice between data and information, most of us would choose information. What is the difference, and why is it important to us as business owners?
In short, data is a collection of facts, while information puts those facts into context. A good example is our financial reports. Each item in our Profit and Loss and on our Balance Sheet is a point of data, but it only makes sense to us, it’s only helpful in the context of these reports. The report format changes data into useful information.
So, why is this important?
Most flooring businesses sit on a mountain of data; every day, more data is added to that mountain, but in most businesses, very little is available as useful information. How much better might our business be if all that data was available as information?
“Most flooring businesses sit on a mountain of data; every day, more data is added to that mountain, but in most businesses, very little is available as helpful information.”
The longer it takes to access information about our business, the less valuable it is. Worse, you could draw wrong conclusions if the information is based on incorrect or incomplete data. We need timely, accurate data converted into information to help us improve our business. Let's have a look at some examples.
You very likely know the value of sales made last week. This is good to know because you are conscious of where your sales need to be to make the difference between a good month and a bad month. However, sitting under that sales number is data that would help you manage and grow your business, but it’s likely either inaccessible or at least hard to access quickly:
· Average GP% and total GP$ for those sales
· Actionable information about the performance of your salespeople
· The number and value of projects not yet confirmed as sales
· The number and value of jobs that have been lost
· Your overall conversion rate and the conversion rate for each of your salespeople
Similarly, with product, out of all the products you have on display, you can probably identify those that sell well and those that sell very little. But if you want to get the best out of your retail space, this only scratches the surface. What about:
· Products we quote often but only rarely convert to sales
· Margins achieved for each product
· Products don’t sell
· Colours within ranges that sell well and those that don’t.
· Top sellers by volume and by profit
These are just two examples of how converting data into information can help the flooring retailer maximise their opportunities and profitability.
“As difficult as it might be, we want to find time in our week to look at information about our business and then use that information to understand and improve our business.”
These are just two examples of how converting data into information can help the flooring retailer maximise their opportunities and profitability.
RFMS is an integrated business management system for the flooring industry. RFMS is one of the few products on the market that gives owners unlimited information about their flooring business.
There is another aspect to this subject. Quickly accessing information about your business is one thing; using that ability to improve your business is another. It takes discipline to maximise the benefit of having this information at our fingertips.
Whether we use RFMS or not, we want to know the drivers in our business, and we need to know the reports that give us timely information about those drivers. And then, we need to find the time to use those reports to improve our business. This last one is maybe the hardest for some of us. As difficult as it might be, we want to find time in our week to look at information about our business and then use that information to understand and improve our business.
We have all heard about “working on the business instead of in it”. It means carving time out of our week to work on our business using timely and accurate information. Maybe this is hard because it doesn’t feel like real work; we’re not selling or organising an installation. While it might not look like work, as business owners, we must recognise that thinking about our business is one of our most important activities. So long as we have good information. Sadly, many business owners can’t spend quality time working on their business because they don’t have access to the information that would make that time worthwhile.
“Sadly, many business owners can’t spend quality time working on their business because they don’t have access to the information that would make that time worthwhile.”
The principle of accessing information to improve our business applies regardless of the business management system we use. But if you want to see how RFMS might help you, we will be happy to arrange a demo and discussion.
Chris Ogden is a consultant and Managing Director of RFMS Australasia (rfmsANZ.com), a supplier of IT solutions specific to the flooring industry. Chris has an extensive background in all aspects of the flooring industry, and he can be contacted at cogden@rfms.com.