Every firm generates a mountain of information as part of daily business processes. In the past, most of the information was in paper form. Now, information consists of both paper and electronic records, including purchase orders, sales invoices, payroll records, sales reports, etc. Once the firm completes a transaction the information gets filed somewhere for a considerable period of time. Recently, I walked through one of my client's file storage rooms and wondered to myself, "How much valuable business intelligence is sitting unseen and unused in all these file boxes? How much more is available in electronic data archives?"

Stored information is a free resource but many businesses fail to use it! Another nice benefit from looking at your data is that you can analyze past records in-house with your existing personnel. On-going analysis of various types of records and suggestions for improvement based on those analyses should be part of each manager's job description. Simple analyses can help spot trends in important benchmarks like sales by product and area, margin on products or categories, and significant fixed expense lines. It is pretty easy to lose perspective when focused solely on daily operations.

Best-in-class companies actively mine and analyze their past transactions on a systematic basis, looking for clues for improvements. Whether you have sophisticated electronic record-keeping systems, or rely mostly on printed documents, it pays to spend some time sifting through records for clues that can help improve future operations. For example, comparison of customer credits and complaint forms can quickly highlight the primary reasons (and cost to the company) of returns and allowances. Eliminating the causes of large credits and of the most frequent types of returns will improve future customer satisfaction and increase profits.

Another free source of valuable information are sales by customer. It can be very helpful to compare the listing of top accounts from prior years to the most recent listing. I still remember how surprised our president was when he saw our year-to-year comparison of Top 50 Accounts and explanations for each change. Looking at facts, rather than relying on personal opinion, produced better understanding and some internal improvements. We answered a number of important questions with the listing. Who were our Top 50 accounts three years ago and how much did each customer buy? Who made up the list last year and how did purchases change? How do your current Top 50 compare to past lists? What happened to accounts that dropped off the list? Why did we lose the account and to whom? Can we recover some of the lost accounts by a focused effort? What steps have we taken to strengthen relationships with the key accounts? What else should be done? 

Purchase orders, accumulated by supplier can generate a series of questions. Who are your major suppliers and how do they rank in terms of dollar purchases? How many suppliers do you have for the same item? Would consolidating purchases with fewer suppliers potentially improve margins? Would preparing purchase orders to fewer suppliers for larger shipments reduce administrative time and expense? Should you change your policy for taking cash discounts with top suppliers? Can you negotiate better pricing from top suppliers based on the growth in purchases from them?

Payroll records can also tell a story. Compare payroll expenses by location or division. Look for unhealthy trends in each location's recent history. What percentage of overall sales are your people costs at each location? Do you have over staff or under staff problems? Are wage rates in line with other local businesses? What do the records say about employee turnover and length of service?

Other records may require outside study. If you spend significant dollars on freight, telecommunications, or insurance, it might pay dividends to invite specialists to review and audit your records in those categories. Most audit firms offer to review business records at no up-front cost and take a percentage of any savings they produce for you. They usually find errors, duplicate billings, overcharges or overlapping services that your normal systems sometimes miss.

Today's electronic communication systems make it much easier to gather, analyze and feedback competitive intelligence. A simple system that encourages your management and sales team to capture and send in competitive market intelligence pays off big time. A simple program I call MainStream(SM),

for "MArket INtelligence Stream," establishes an easy means for both management and salespeople to provide a central collection point with competitive information. Today, e-mail, scanners, and other devices make it quick and simple to capture and communicate market intelligence. The system provides for central clearing and analysis, and also has a feedback loop to keep everyone informed. You will operate more effectively when management and each salesperson has accurate, up-to-date information about individual competitors and industry trends in general.

Although I conduct independent surveys that can be helpful to management, my recommendation is to look first to your own business records. Begin to mine and analyze the information you already possess. You may uncover some obvious ways to improve your operations and enhance customer satisfaction. Whether you use sophisticated enterprise management software systems or you still mostly rely on paper records, careful analysis of transactions is a vital function of management within the best managed companies. I wouldn't wait for someone to develop a fancy computer program for most of the analyses. Good, factual information, gleaned from your own records, on a yellow legal pad or in a simple Excel spreadsheet can do the job nicely. In this case, timeliness trumps sophistication!