The good news is that many businesses have the key to unlocking insight into what they should do next. That key is their data.

Data isn’t just a valuable asset for Silicon Valley giants; it’s essential for SMEs too, says Helen Tanner, founder and CEO of consultancy Data Cubed. “Understanding the value of data is more important than ever in the Covid world,” she says.

Today employees are working from home, selling online and delivering products directly, sometimes for the first time. Getting insight from data generated from these online activities can help business owners understand what is profitable and what isn’t, getting to the core of key issues that feed into the business strategy and how it can improve.

And if you think your business doesn’t have much data, think again. Tanner says every business, no matter what size or sector, will have many types of data to work with. These can range from financial data and customer records to call logs, website hits, email response rates and social media engagement. “All of these can be used to help businesses cut costs and improve performance,” she says.

How can a business start to make use of its data? Tanner recommends a review of identified high-level KPIs, looking at how these vary over time, location, department or product. This helps identify problem areas: metrics that are falling or rising which shouldn’t be.

This opens the door for the business to concentrate on areas and actions that will make the biggest difference to its results. It’s about getting the biggest bang for your buck, says Tanner – adapting for good commercial reasons.

“A data project should be actionable in a way that helps the business grow and adds value to it. Focus on the big areas rather than, say, trying to cut costs in an area that makes a marginal difference,” she says.

Data-driven projects can only make a difference with the buy-in of the business owner or leader. This is particularly important given that the data may come from all parts of the business, making overarching engagement vital. At a day-to-day level, Tanner normally works with someone who has ownership of the customer, sometimes operations directors or the head of sales and marketing.

She recommends starting with a short project that runs over a fixed period and has a specific, tightly scoped goal as this can help a business assess how good or valuable its data is. The scope can then be expanded to drill down into more detail or to look into different areas, depending on findings and how they stack up against expectations.

Insight from data helps to avoid decisions being made through assumptions and guesswork because the numbers will tell their own story, shining a light on problem areas or exposing parts of the business that are doing better than expected. These are the areas to double down on, says Tanner. “You could spend a lot of time trying to cut costs in an area that makes a marginal difference. Letting the data do the talking allows a business to focus on the areas that can make a really big difference.”

And that data should be an integral part of a business plan. The days of making business decisions based on guesswork or whoever shouts loudest should now be over, Tanner says. “A business plan should use data to set sales targets, predict future performance, prioritise actions, analyse customers and target resources – it should be chock full of data!”

Using data enables a business to make smarter, faster and more confident, informed decisions by removing any bias or guesswork to arrive at optimal choices.

This could come from using the data to sell more or to retain customers, using data to target the right type of sales and marketing activities.

It could help save money and cut costs in the right places or inform a decision on additional investment.

But data can also make money directly for the business, says Tanner. “Businesses often miss out on the potential of data: to directly monetise data by creating new data products and services that create brand new revenue streams.”

This is an accepted avenue for digital start-ups, but it can apply to any business. Tanner has worked with SMEs which have created new data products and services, introducing new revenue streams and sources of income for the business. Examples include creating dashboards (information management tools) for clients, a new market index, or predictive forecasting tools.

1. Collect the data in one place. This has to be the first step of any data project as most businesses have disparate and disconnected data sources.

2. Start with what you’ve got. Every business has data gaps and areas in which the data isn’t perfect. Don’t waste time on a search for perfection – use what data is available and then improve it.

3. Don’t be scared of GDPR. Be mindful of the General Data Protection Regulation and treat data carefully and with respect, anonymising it where you can and getting advice where there are concerns. If you do this, GDPR should not stop you using data to improve what you do for customers or to derive trends and insights.

4. Keep it simple. Data can be complex, and it is easy to get carried away with the latest tech and tools. Instead, start with a simple project that shows high-level patterns and trends.

5. Iterate, iterate, iterate. While a business plan is usually written periodically, data is being collected all the time. Treat data projects and dashboards as starting points that need to be regularly reviewed and updated.