Accountants and bookkeepers are used to helping their clients understand their key business data. And performance measurement can make all the difference.
In the words of Juan José, former head of IBM Strategy & Analytics and who now runs a master’s degree at IE Business School, “Analytical capabilities help businesses gain competitive advantage, engage with customers, and differentiate from their competitors.”
It’s not just about compliance – here are five businesses who used data to go above and beyond what was formerly possible.
You might still believe Disney runs on artistic talent and dreams, but data plays a huge part in the continued success of the brand.
For example, its theme parks deploy real-time analytics to improve operational efficiency. Disney schedules 240,000 shifts for 80,000 employees per week. With analytics, accuracy in managing labour improved 20%. And the project paid for itself in a year, just from the labour savings.
Disney also spent $1bn on wearable tech to track visitor preferences. The system helped Disney accommodate 3,000 extra daily visitors during the 2013 Christmas holiday season by cutting congestion. In 2013, theme parks made up a third of Disney’s $45bn total revenue and 20% of its operating profit. Disney attracted 132m guests in 2013-14, showing that it’s data that keeps the magic alive.
I guess we all have to grow up someday.
After a disappointing year in 2009 cut Starbucks’ stock price in half, the coffee chain gave big data a shot. And it’s helped the company re-orient its product.
Starbucks sells 4m cups of coffee a day in the US and 25% of transactions are made by loyalty-card customers. By grinding this data, Starbucks designed a new line of products to complement customers’ buying habits. Starbucks also began beaming targeted advertising and discounts directly to consumers’ smartphones.
The strategy, and Starbucks’ wider digital transformation, put the company back in the black. Starbucks’ stock price has bounce back from $8 in 2009 to $56 today.
When Caterpillar’s machines come to a halt, it can cost 900 hours of downtime and $650,000 in repairs. Ensuring operational efficiency is essential.
So last year, Caterpillar joined forces with Uptake. They decided to use new software to trawl the deluge of data emitting from bulldozers and hydraulic shovels to anticipate when a customer’s machines would need repairs.
Not only has this made Caterpillar more efficient by reducing accidents and downtime, but it saves money. In a study, Caterpillar found the data crunching software reduced typical downtime to 24 hours and repairs to just $12,000.
“Our business runs on uptime for our customers,” CEO Doug Oberhelman told Equipment World. “If we do it at a lower cost than our competitors, we win.”
Caterpillar isn’t the only industrial champion betting on big data. General Electric got serious about performance measurement and placed 10m sensors on its gas turbines and jet engines.
By connecting them to the cloud, the conglomerate can analyze the data flows to find ways to improve reliability. While VP of global software services Bill Ruh told Computing that automation has generated huge productivity increases, it’s also an opportunity to sell add-on services that provide value for customers.
GE’s Industrial Internet program added $1bn in revenue in 2014. And the company projects revenue from software products will reach $15 billion by 2020 — three times last year’s bookings.
In 2010, the PC market, the core of Microsoft’s business, was sinking by 4% a year. Sales of its PC software had flat-lined. And its share price tanked to less than $25.
To avoid death’s door, Microsoft reimagined both its product and market. It rolled out a host of fresh data tools, such as SQL Server, Microsoft Azure, and its Hadoop-powered analytics components.
The reorient has reaped dividends. Azure has been its biggest source of growth, up by 108% in Q4 2016. Revenues from its Intelligent Cloud division grew to $6.7bn. Since 2010, Microsoft’s stock price has doubled to about $60.
Data isn’t just important for your clients – it’s an essential tool for building an efficient and profitable bookkeeping business.
We’ve picked out the key KPIs you need to be tracking to optimise your practice, comparing one firm using Bookkeeping KPIs and one that isn’t. Find out the crucial difference this makes.
Download the factsheet to find out: