The topic of digital disruption and the impact that new technology has on businesses is almost as outdated as catching Pokémon on a Nintendo Game Boy (pre-Pokémon Go). Yet many business owners still aren’t using the data available from new technology to improve business decisions in this age of digital disruption.
When technology advances ways to perform a business task, the focus is often on processes and efficiencies. Increased efficiency is great, yet business owners often overlook how to strategically use the access to new data. For example, many businesses have moved their legacy desktop accounting packages to cloud-based solutions to reduce the time taken to process transactions, as cloud accounting platforms provide live bank feeds and recognise regular transactions.
Unfortunately, using this data to improve decision making is often missed, and this is where real strategic benefits can be uncovered because access to real-time data enables the ability to make faster and more effective business decisions. This can be a serious competitive advantage that enables business owners to identify new opportunities and act on them in real time.
One reservation business owners may have concerning new technology is a fear of becoming redundant. Understandably, those in well-established businesses could argue that decisions based on past experience and intuition has always served them well. They may be correct but there isn’t a competition between mind and machine, and it’s possible to embrace both.
Technology advances and data availability don’t mean that human judgement is eliminated, it just alters where that judgement is needed. James Blackburn, PwC Private Clients Partner, says: “Businesses and advisors that aren’t moving towards making the best use of their real-time data are likely to be foregoing opportunities, and could potentially become redundant themselves.”
There are many business owners that only focus on their financial statements, usually after the year end. There isn’t much value in looking back at performance though; the real value comes from monitoring the business’ current position and forecasting when new opportunities might occur. As profoundly noted by ice-hockey player Wayne Gretzky: “A good hockey player plays where the puck is, a great hockey player plays where the puck is going to be.” This same logic can be applied to businesses.
In addition to enabling clients to have more freedom to consider potential growth areas for their business, cloud solutions also allows business advisors to provide more relevant and valuable insight. The real-time access means improved advice on many activities from the best way to finance an acquisition or structure a potential investment.
PwC’s 18th Annual Global CEO Survey found that the most highly rated strategically important digital technology for Australian CEOs was data mining and analysis, reinforcing the importance for business owners to understand the best use of all their available data.
This is only one example of how using technology can provide valuable insights. What are you doing in your business to take advantage of the data available to you?
Vanessa Stillwell, Senior Consultant, PwC