Use data analytics to drive your business
There’s a lot of buzz surrounding data analytics. But what does it actually mean in a company’s day-to-day business? According to the information technology research and advisory company Gartner, data analytics provides a data and insight-centric approach to solving a business problem. The entire organization can use the created insights to drive business decisions. It’s not just about developing a lot of reports, building models or moving data around, but instead it’s about solving business problems to make decisions faster and more effectively.
My company runs amusement parks, water parks and family entertainment centers across the country, with millions of visitors each year. We’re only about five years old and continue to acquire new parks. Some of the considerations we’ve used data analytics to address include:
- Customers — We want to better understand how to increase our marketing return on investment (ROI) and enhance profitability. We not only want to drive customers into our parks but also improve our margins.
- Labor optimization — Labor is a large cost in the hospitality industry. The right labor cost isn’t the lowest, but the amount that’s best for customer service and profitability. Labor is related to the customer experience as well as financial performance, financial statements and improving our overall ROI.
Both of these factors are closely tied to our financial performance and our financial statements. Much of what happens in data analytics ties back to the finance area and to the company’s profit and loss statement.
Here are questions companies can ask to make the best use of data analytics:
What are we trying to achieve?
Effective data-driven companies drive data use from the business perspective. In other words, think about your business objectives first, then you can design data analytics to help you achieve them. Your analytics should be built around the five major areas of your business: finance, sales, customers, operations and people.
What questions can we use the data to answer?
Three key questions are: How are we performing? Why is that happening? What should we do to improve? The most important of the three is why, since you need to know the root cause of your performance to decide how to improve it. That involves connecting your strategies to your financial metrics and to your operational drivers. Since finance and accounting professionals have insights into what is going on throughout the organization, they are in the best position not only to design this connection but also to build and closely monitor it and to work closely with other functional areas.
Is data analytics right for my company?
Data analytics has tremendous benefits for all companies, no matter what size. In fact, it may be especially beneficial to small- and medium-sized companies since it can lead to low-cost ways to drive revenue and improve margins. It can help companies with unique issues in their industries. For example, our business is highly seasonal. We’re very busy from Memorial Day to Labor Day, but three of our parks close during the winter. We rely on our analysis to prepare and run the parks during peak season.
The data revolution
This is an exciting time. Experts believe we are just at the beginning of the data revolution, given the emergence of machine learning and other forms of artificial intelligence. Finance and accounting professionals can make an even bigger contribution to the overall company and help drive strategy and performance by using data analytics tools.
If you want to learn more, the AICPA Data Analytics/Business Intelligence site offers useful resources and information. Those who want to enhance and demonstrate their knowledge in this field can turn to the AICPA Data Analytics Certificate Programs for training and practical guidance as you establish your expertise in this dynamic field.
Rich Fox, CPA. Rich is vice president of analytics and data science for Apex Parks Group, one of the largest amusement park operators in the United States.
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