In today’s data-driven world, over 70% of businesses are now leveraging automated analytical tools to gain a competitive edge*. From large manufacturers to small growers, these tools are becoming indispensable. There is no doubt that integrating these tools can be expensive and time-consuming, which raises the question:

Are Analytical Tools Worth The Cost Of Integration?

In short, yes. Even rudimentary analytical tools can make a huge difference in providing business owners with vital information regarding their costs, profitability, and inventory. There have been multiple instances within our own experiences of analytics exposing money that businesses could be making but are not due to a lack of analysis.

The first example comes from a US based grower who wanted to get more accurate pricing for their items. After the analysis was complete, it was found that the business was leaving almost $500,000 on the table every year simply because they were pricing certain segments of their items too low. Of course, had they known this, they would have increased prices, but the key is that they did not know, and analytics is the solution to not knowing. Even if a firm seems strong and healthy on the surface, analytics can help expose issues where the firm could be making more, as well as areas that are losing money that the firm needs to address.

What Will Missed Sales Cost Growers?

While pricing strategies are crucial, understanding customer dynamics can be equally important. Take, for instance, a southern US based grower who needed a better look at their customer situation. Fulfillment rates for the firm averaged around 96%, which seems very strong and something they could be happy about. However, when analytics was applied to the 4% of missed sales, it was found that these missed sales were causing the firm to lose almost $50,000 from just their top 10 customers in the first 6 months of the year. Over time, these missed sales, if not corrected, could add up to hundreds of thousands of dollars in lost profit. This case serves as a testament that even though a firm can appear to be performing well, analytics can provide a clear look at how the firm could be doing better and by how much.

Conclusion

From both cases, we can see that analytical tools helped firms notice problems in their pricing as well as inventory management, but they can be applied to every aspect of the business, even personnel decisions. Where analytics can be especially helpful is in costing. Automated analytics make nailing down a unit cost much easier and more scalable, allowing managers to make accurate decisions much quicker, as the automation frees up employee time to participate in activities that add value to the firm, as opposed to monotonous data exploring. And, as you can see in these examples, the potential benefit far outweighs the costs of the tools or services. Let the machines do the math, and the people make the decisions. It is worth it!

If you have ever wished for better, faster analysis and information then we can help. Contact us today for information on how we can help you improve your view of your business.

* SOURCE:  https://imaginovation.net/blog/business-automation-statistics.