One of the biggest problems the business world faces is the slow decision-making process. According to a Mckinsey Survey, on an average executives spend more than 30% of their time in decision making. The number increases with seniority. The results showed that 14% of C-suite respondents spent more than 70% of their time making decisions.
In this data-driven world, it is easy to get lost in the sea of data. There is so much data out there that executives are struggling to get instantaneous insights out of it.
Just to understand how much data is being collected and how many metrics this correspond to.
Imagine if we can put this amount of data to good use. We are sitting on a goldmine and don’t even realize it.
Businesses today use dashboards and metrics to track progress and take business decisions. After collecting, cleaning, and interpreting data sets, a data analyst spends hours creating dashboards to answer a question or solve a problem.
Did You Know? According to Anaconda’s State of Data Science Survey, Data scientists spend 39% of their time on data prep and data cleansing, which is more than the time spent on model training, model selection, and deploying models combined.
Cambridge Dictionary defines metrics as “a set of numbers that give information about a particular process or activity”.
Tech Target defines a Business metric as “a quantifiable measure businesses use to track, monitor and assess the success or failure of various business processes.” Let’s understand the importance of metrics for an organization.
Types of Business Metrics
Business metrics can be broadly classified into 2 types.
- Operational – Metrics related to the performance of the employees/organization. Such as production time, and turn-around time.
- Financial – Metrics related to financial performance, position and strength. Such as the organization’s profit, RoI, Sales etc.
Why Do We Need Metrics?
Today almost every company and strategy is dependent on metrics or numbers. You can talk to any manager and they will be able to tell you the importance of metrics. Too many metrics can lead to a lot of unwanted data.
Metrics are imperative to any business, as they play a vital role in helping businesses to make decisions. For a long time metrics have been helping businesses improve operations and provide profits, until the big data revolution.
There is a common belief that you have to capture every bit of information. Though this is important. It may not favour you all the time. It is useless to capture every bit of information when you don’t get any meaningful insights out of it. Because when you get to insights, you should see only what you need. Like asking the right questions and getting relevant answers.
We don’t need to track or measure all of them. Metrics are not a bad thing as such. Just that most don’t use it the right way.
Benefits of Tracking Business Metrics
It is a best practice to keep track of your key metrics. Tracking your business metrics will help you in understanding the status of your business.
- Performance Improvement – Business metrics will help you identify how well your business is performing. Whether you are making profits or performing poorly.
- Competitive Analysis – It can help you identify your business’s position amongst key competitors by setting benchmarks.
- Track Progress – It can help you keep track of your progress towards organizational goals
- Reporting – Reporting the stance of your business to relevant stakeholders is a critical communication tool for every organization
- Identifying Problems – Tracking Business metrics alerts you to problems ahead of time.
Is Metrics Still Important?
Let’s take an example of a car dashboard. These days cars are getting more sophisticated. They show you all the necessary information that you need to know. Such as, at what speed you are driving, at what gear you are driving and when you should shift gears.
Now imagine you driving your car without the dashboard. That’s probably scary, right? So, are dashboards a must? The point I am trying to make is you need certain information like how fast you drive, what gear you are on, how many kilometres have you driven etc. However, you don’t need information like what is the torque, which parts are working properly or the date and temperature. With too much information, you tend to distract and lose sight.
Similarly, imagine getting filtered insights from your BI tool. Only the information you need to know, no more no less. What a pleasant sight it would be.
Yes, metrics are still important. However, it should not be a headache for you. With the appropriate use of metrics, you will be able to take your business in the right direction and succeed. But you should not wait for another dashboard to be built. Instead of skimming through a bunch of dashboards or staring at a sea of metrics, how about conversing with data?
Decision-making should be part of your job and should take only fraction of your time. Conversational Insights can help speed up the decision-making process. With instantaneous insights, you don’t have to wait for your team to share the report with you. All you need to do is just talk to your data. By asking the right questions, the conversational insights platform can provide you insights within seconds which is why conversational insights is the future of business intelligence.