ERP systems produce a lot of numbers, preferably clearly performed in dashboards and reports. Handy! But also a danger: do you actually know where that data comes from and how the figure you are looking at came about?

Data without context has little value. A 9 on a test is a fine grade. But an inflation grade of 9 is not exactly positive. You need interpretation to understand that.

Bare figures indicate

The same also applies to the figures contained in ERP systems. Especially in management dashboards, figures are sometimes presented sometimes very "bare" ... The risk then is, that you start making decisions based on these figures, without looking at where they come from. What can you do to give this data more context?

1. See how the figure is constructed.
   Many figures you see are a sum, an average or even the result of a more complicated formula. That formula may be made up of multiple grades that are in some relationship to each other. Thus, in this formula, one digit may have more influence on the overall figure than another.

   When you better understand which wheels can be turned to change the overall grade, you can make much better decisions as a leader.

2. Zoom out: compare with a previous period
   Monthly figures often only mean something if you compare the figures with the previous month, or indeed with the same month 1 year ago.

   Are the numbers falling? Before you draw negative conclusions, you'd better check that this is not a normal fluctuation. It could also be seasonal: March, for example, is always worse than February. That information will help you better understand the numbers.

3. Zoom out: compare to the benchmark
   When you compare to the benchmark, you use public data to compare your numbers to those of competitors in your industry. Is only your company doing well? Or do competitors do as well? And what does that mean for your competitive position?
4. Zoom in: filter by subfigures and details.
   A figure in a dasboard is often the average of many more small figures. Do you have a figure that is strikingly different from what you might expect? If so, it may be worth zooming in on the smaller numbers underlying it. Was there an unexpected spike at some point? And can you figure out what took place that day or moment?
5. Find out what (external) factors influenced
   Figures are almost always influenced by external factors. For example, your sales figures are influenced by market demand. But the weather, the political climate, positive or negative investor sentiment can also be influential.

   So always find out what external events or factors took place during the period to which the figure applies and ask yourself whether they may have influenced it.

6. Ask explanation from stakeholders
   Behind every figure you see is an employee. The risk is that you will interpret a figure without asking for input from that employee. If you ask for a moment, that employee can often add valuable context by explaining how the figure was arrived at.
7. Find out what value these numbers bring
   Are you getting numbers from a third party? Then beware of the "death by numbers" phenomenon.

   Precisely because so much data is available, someone may consciously or unconsciously try to cover up negative numbers by showing lots of positive numbers. These numbers are all correct, but they take away your view of the numbers that really matter.

So with every figure you face, ask yourself: in what way does this figure contribute to my organization's profits or growth?

All data available

The good news is that in our ERP systems all data is available, including the small numbers. So adding context to data is often relatively easy and starts with clicking through on your dashboard....

Want to learn more about how up-to-date numbers can help you make better decisions? Then contact our consultants. They will be happy to show you what the added value of our ERP systems can be for your company or organization.

Schedule a consultation