Businesses today have access to more data than ever before. We can determine exactly who our customers are, how they find us and how much they’re worth to us. But, while they say knowledge is power, what do you actually know?
The right question drives clarity, but actionable answers depend on structured, detailed and disaggregated data. So, how can aligning your systems with your questions unlock better decision making?
Start with the question
Every key business decision stems from a question, so what do you need answering? Some good examples would be:
- What is our customer acquisition cost by channel?
- Which products deliver the highest margin?
- How is our payroll split across departments?
Your data must provide clear, granular answers to these questions in order to allow you to make accurate decisions.
Identify the right data sources
Scaleups typically have few data sources, but there are several places to mine data, including:
- Xero, or other accounting software
- CRM systems
- Payroll software
Xero can be used to generate expenses, revenue and financial reports, while CRM systems record customer interactions, sales data and upsell potential. Your payroll software manages salary allocations and team costs. Each of these systems needs to hold sufficient detail to current questions, and be setup to collect relevant data to answer future queries.
Disaggregate your data
Recording data at a summary level can limit how useful it is in the future. Detailed, structured data allows you to slice and analyse it effectively. For example, in Xero it’s useful to split items into specific categories such as travel, software subscriptions and marketing spend. Avoid lumping all expenses into generic buckets. In your CRM systems, record transactions with product-level detail, tagging items with categories such as product type, sales type and associated teams.
Tagging is key
Tags make data versatile. Add dimensions like department, region, product category and customer segment to transactions and interactions. In your CRM, use tags to analyse sales trends by customer type or region and tag payroll data with department identifiers to allow for granular reporting.
Practical examples
Let’s go through some real-life examples of how to better use data, and the tangible benefits it offers.
- Expense management
- Sales analysis
- Payroll distribution
Question: How much are we spending on software tools?
Solution: Record software subscriptions as a distinct expense category in Xero, enabling easy reporting and trend analysis
Question: Which products drive repeat purchases?
Solution: Ensure your CRM captures detailed sales records, including product type and customer ID. This allows tracking of repeat purchases by product category.
Question: What is our payroll spend per department?
Solution: Assign department codes to each employee in payroll data. Generate reports showing cost breakdowns by team.
Futureproof your data
It’s a good idea to complete an audit of your current systems. Are you collecting enough detail? Can you tag transactions with relevant dimensions? Do you have visibility into trends and performance?
It’s also a good time to think about the questions you might face as your business grows. Ensure your data is structured now to provide insights in the future without requiring rework.
Keep it simple
Structuring your data in a useful way shouldn’t require a lot of additional expense or resource. Most systems already support tagging, categorisation and granular data entry. Train your team to use these features effectively and you’ll be well on your way. Make sure you establish standard processes for recording data – consistent inputs lead to reliable outputs.
By structuring your data thoughtfully today, you’ll be prepared to answer critical business questions tomorrow. Scaleups thrive on clarity and agility, make sure your data strategy supports both.