In a Data-driven Economy, Guesswork Can Endanger Your Business

In the digital economy, guesswork is being replaced by data-driven decision making, as businesses harness data to make smarter and faster decisions. Modern software solutions, particularly cloud-based, integrated inventory management allow businesses to capture, manage, analyze, and leverage data from all aspects of their operations, providing real-time insights and enabling businesses to move at the speed of their customers. As customer expectations increase and the marketplace becomes more competitive, businesses need to replace traditional guesswork with robust inventory management solutions to survive and thrive in the data-driven economy.

Hey, we’ve all done it plenty of times: following your instincts, going with your gut, playing hunches. And those types of guesses—educated or otherwise—have no doubt paid off once in a while or perhaps even fairly often.

But as we enter the digital economy, and as more businesses begin to harness data to make better, smarter, and faster decisions, that time-honored tradition of guesswork needs to be put permanently on the shelf with the rotary phone, fax machine, and cassette tape.

The Limitations of Guesswork in Business Decision Making

When business customers begin demanding more-customized products and services, guesswork won’t help your company figure out the optimal way to source the necessary materials, reconfigure your supply chains, schedule the production process, and select the required workforce.

When a new prospect asks if you can fulfill a huge new order with precision shipments, unlike what you’ve had to execute in the past, guesswork won’t help you plot out the optimal logistics.

When a competitor starts to cut into your market share and seems to know more about your customers than you do, guesswork won’t equip you with insights and innovative approaches to reclaim the upper hand.

In today’s data-driven economy, hunches, guesses and gut instinct are rapidly being replaced by modern digital tools allowing your company to analyze the patterns of the past, assess and deploy current resources, and move confidently into the future with the knowledge that you’re in lockstep with your customers’ wants and needs.

That ability to move at the speed of your customers is critical today as the balance of power in the buyer-seller equation has shifted permanently to buyers. They have more information, more choices, and less brand-loyalty than ever before—and those trends are only growing stronger.

As a result, businesses must have insights into the shifting desires and demands of their customers, and real-time data has become the currency of the digital economy.

The Power of Data in the LBM Space

In the Lumber and Building Material (LBM) industry, the need for data-driven decision making is particularly crucial. With complex supply chains, fluctuating material costs, and a diverse customer base, building supply businesses stand to gain significantly from harnessing the power of real-time data.

By leveraging modern inventory management software, LBM businesses can optimize inventory based on historical sales data and current market trends, ensuring they have the right materials at the right time. Supply chains can be streamlined, with data providing insights into the most efficient sourcing and logistics strategies.

Moreover, understanding customer buying patterns and preferences can lead to improved customer service and targeted marketing efforts. In an industry where timely delivery and accurate order fulfillment are key, being able to anticipate customer needs and respond swiftly to changes in demand can provide a significant competitive edge.

In the past, companies did their best to try to locate and consolidate data—or even approximations of data— from a mishmash of sources: spreadsheets, paper-based sales orders, email messages, paper invoices, faxes, and the “best recollections” of salespeople.

Given the imprecise nature of each of those inputs, it was nearly impossible for businesses to use data to create dependable and valuable plans, optimize operations, or analyze what was working well and what needed to be adjusted.

Embracing Modern Software for Business Growth

Today’s customer-centric digital economy has ushered in a wave of modern software solutions that allow businesses to capture, manage, analyze, and leverage data from every part of their operations offering the promise of data insight.

• Instead of spending hours pulling together details about customers’ historical buying patterns and preferences, software captures them automatically and present them in clear and flexible formats.
• Instead of having to review dozens of time-consuming spreadsheets to evaluate some “what if” scenarios for how to best meet the escalating needs and demands of customers, inventory management software allow you to create, evaluate, and select from a wide range of alternative plans.
• Instead of making numerous phone calls and plowing through mountains of paper to get a snapshot of what’s in inventory, the software can capture and update that information in real-time.
• Instead of relying on gut instinct and old-fashioned guesswork to determine how much raw material to purchase as your busy season approaches, modern cloud-based software allow you to monitor and optimize your replenishment requirements in real-time throughout the year.
• Instead of constantly having to tell your best customers and your most-promising prospects that “I’ll get back to you on that,” software allows you to immediately answer their questions and even offer additional alternatives.

Today’s customers expect you to be able to move at an increased pace, handle last-minute changes, anticipate shifts in their requirements, and meet their rapidly changing expectations for deliveries, customization, and even billing.

And while good old-fashioned guesswork helped your company get to where it is today, it can’t handle the demands of the high-paced and fast-changing digital economy.

It’s time to meet the digital marketplace’s needs with robust inventory management software that can help you survive and thrive in the emerging world of data-driven business.