Analytics is playing a more important role in small businesses, and those that focus on analytics perform much better than those that don’t. Here’s the good news, though: it doesn’t require the biggest enterprise solution you can buy, either – it’s about a commitment to measurement.
That’s just one lesson from a (June 2013) study by the Aberdeen Group, “Small Company Analytics: A Warm Slice of Insight for Mom and Pop.”
Examining a group of companies with annual revenues of $10 million or less, Aberdeen found a big performance difference between the top-performers (who had year-on-year operating cash growth and decreased product process times) and other small companies.
What differentiated these “leaders” from other was their commitment to a few key data analysis practices – practices that are independent of fancy or high-priced data management solutions. Perhaps the most important was a simple commitment to rigorously measuring a few key performance indicators (KPI), and sticking to that.
“Leader” companies were also far more likely than others to use some form of a strategic “dashboard” (63 percent of “leaders” compared to 33 percent of “followers); use data management tools (59 percent compared to 35 percent); and take advantage of information they can “drill down” on.
It’s not hard to see where contract management fits in to these findings. First, by focusing on gathering essential business data, companies put themselves in a position to analyze key data better.
Is there anything more essential than tracking the performance on company contracts? The performance of key sales contracts, for instance, is key to understanding margins. Knowing this data – and being able to use it as a key performance indicator in some way – starts with a way to effectively centralize and manage all contract information.
For small companies, the ease-of-use of a solution is key. On this point it is worth noting that Contract Assistant was specifically designed so that users with consumer-level knowledge of basic office utility software can use it with ease. It is also an affordable option (for businesses sensitive to the cost of solutions).
That’s an important point in small companies where employees are often multi-role users of many types of solutions/technology. Small companies just may not have enough “specialists” to devote time to learning a complex software solution. It’s no surprise, then, that one of the recommendations in the Aberdeen Group’s report is that small companies focus on adoption of tools that are easy to use. Contract Assistant’s Standard edition certainly falls into the category of easy to use (find out more here).
In the end, small businesses can get as much of a boost from analytics by focusing on the data that matters. A key part of that is contract management, but of course, it’s the commitment to gathering data that makes the difference.