Using a business reporting or analysis tool provides an attractive opportunity for small businesses: they allow you to gather and analyse large quantities of data without the help of a dedicated business analyst, presenting findings in a way anyone can understand. A reporting tool is a great addition to your business performance management, but before you rush to buy one for your organisation, have a read through our brief guide to the pros and cons of using one to understand what you’re in for.
What is a reporting tool?
A reporting tool is a software application that allows you to identify key findings from data sets about your business and present them in an easily digested, visual form. You can use a business reporting tool to gauge how a project you’re working on or have completed is performing or to calculate the viability of new projects, investments or expansions.
A business analysis tool allows you to make sure all stakeholders have good visibility into how your business is performing so that you can make decisions accordingly. These data visualisations include things like dashboards, charts, graphs, tables and heatmaps and the data presented can often be interacted with through filtering and sorting actions. This means you can easily understand key takeaways from data with a single glace.
Reporting tool benefits
1. The most important benefit of a reporting tool is that it makes it easy to collate data and draw conclusions from it even if you don’t have a team of highly-skilled data scientists working for you. After all, it can be a tough task for the uninitiated to effectively process data, identify the most important trends and then communicate these in a simple way.
2. With a reporting tool, more or less anyone is able to use simple formulas, slice through data and do some basic data modelling. The findings from these actions are then presented in a visual format that’s easily viewed, embedded into written reports and exported into any format.
This means that information can be easily shared with anyone within and outside your organisation who might find it helpful, building trust within your organisation and allowing everyone to be on the same page.
3. The fact that findings are easy to understand and simple to share also means you can improve your customer satisfaction by providing clients with more information about the results your company is delivering for them. A reporting tool makes it easy to generate automated quarterly and annual reports for clients.
4. Investing in a business analysis tool can also make producing informative reports significantly faster, with some suggesting an improvement in speed as high as 40%. It saves you countless hours of gathering and sifting through data, allowing you to use that time to focus on other tasks. And since you’ll be relying on your analytics tool to do much of the heavy lifting, the likelihood of misunderstanding data is also lower.
5. Finally, a reporting tool will help you gauge the general trajectory of any given project, allowing you to make timely changes to optimise its results. You can also explore various alternative routes without committing to any one of them before settling on the one with the most promising potential results.
The potential pitfall of using a reporting tool
As you see from the above, the benefits of a reporting tool are numerous. That being said, there is a potential pitfall that comes with using a business analytics tool. This pitfall is not being rigorous about the data you’re exposing to analysis. Though a reporting tool will eliminate a good deal of potential for human error from the gathering and analysis of data, the possibility of this isn’t erased by the use of an analytics tool.
The fact that you’re using a seemingly objective data analysis tool means you’re more likely to not think twice about whether the data you’re subjecting to analysis is the most appropriate for what you’re investigating. This could mean you draw conclusions from data sets that are unrepresentative of the project you’re investigating.
To combat the potential of drawing incorrect conclusions, investigate the data sets you’re using: are they comprehensive, with a large enough sample size? And if the data is not coming from within your organisation, is the source reputable and trustworthy?
You should also think about your own biases and how these might affect how you choose what data to analyse and what KPIs you’re choosing to look for. Are your KPIs the most appropriate ones and actually indicative of business success? If the answer to all of the above questions is yes, you just might be on your way to producing a highly informative, highly actionable business report using an analytics tool.
Is investing in a reporting tool worth it for my business?
At the end of the day, the pros of using a reporting tool clearly outweigh the cons. It’s a cost-effective way to level up your business analytics game and allows you to make more objective decisions without investing lots of time or money into it. Want to find out the right tool for you? Get in touch with us! And for more articles on IT strategy, check out our blog!