Mo data, mo problems

 Why Exact wants to be the data science department of SMEs. 

One thing I like about the Dutch is their sayings. Like this one: ‘Te is nooit goed (behalve in tevreden)’

‘Te’ is Dutch for ‘too’ – the saying reads that too (much of anything) is never good, except for tevreden, which means satisfied. Whenever anybody uses this saying, someone in the room is bound to add ‘or tequila!’ 

As is often with clichés, there is a lot of wisdom in this expression. We humans are still programmed as hunters-gatherers and feel the urge to collect as much things as we can: food, money, bottles of tequila, or data.

More data is not always better; despite the popularity of ‘big data’. What we see happening now in a lot of small and medium-sized businesses, is that more data means more problems. Information is scattered across systems, which makes it difficult to pull everything together to get a complete picture. We have so much data, but we need to make it actionable. We often just don’t know what to do with all this data.

A long way from data is wisdom

The main reason why that’s a problem, is that data is only helpful if it tells us something. I always like to use the DIKW pyramid that distinguishes between four levels of understanding: 

Data, at the bottom, of the pyramid is just numbers and facts. It is the foundation of the pyramid. If we add context and meaning to data, it becomes a source of information, giving more valuable insights. Knowledge is built from information when we apply experience and learning. Finally, by applying our uniquely human understanding of ethics and our sense of right and wrong we make wise decisions. As you can see, there is a huge gap between data and wisdom.

Computers cover the basics

Over the past years, computers have slowly conquered the first three layers of this pyramid. When I graduated in Computer Science in the 1980s we talked about “data systems”, later application software evolved to create “information systems”. Now, with AI and machine learning, we are quickly entering a new phase of systems that have their own knowledge. Software systems and algorithms making suggestions, recommendations and some simple decisions, based on knowledge that comes from information that we get out of data.

The first three layers of this pyramid represent a view of the past. They tell us what has been and what has happened so far. Wisdom is about applying knowledge and applying ethics and a sense of right and wrong to look forward: what are we going to do next? Machines are capable of covering the first three layers, but we as humans can sit on top of this pyramid and decide what will will do next in business or in our lives.

"Our ambition is to be the data science department of SMEs."

Larger technology organisations (like Exact) employ teams of data scientists, experts in machine learning and AI who help develop the robots on the third level of the pyramid, based on information and data in their application software. SMEs don’t have access to these kinds of resources and that is why Exact wants to help. Our ambition is to not only be the software provider of SMEs, but also the data science department. And why wouldn’t we: the financial data of over 442,000 Dutch SMEs already sits within our cloud technology. Our brilliant data science team led by Judith Redi is on a mission to help our customers to turn their data into knowledge and eventually wisdom.

We are already making it easier for entrepreneurs to learn from their data, by comparing their KPIs and business performance with those of other businesses. Our recently introduced SME monitor gives business the opportunity to see how they are doing: how does our revenue compare with other companies in the same industry? And how about our cashflow development and the time it takes our customers to pay invoices?

We are also making this data available to the public via an online dashboard. This is how we intend to help the Dutch SMEs, who – according to another Dutch expression – are the engine of the economy.

I invite you to take a look around and see it for yourself. This is just the beginning, the monitor will grow over time and cover more KPIs, thereby becoming more complete along the way. The same goes for the SME monitor in our product Exact Online; over time we will keep adding relevant benchmark information that SMEs can use to make decisions.

We offer the data, information and knowledge – the wisdom is something we gladly leave up to our end-users and their accountants.

Shifting from raw data to actual wisdom may leave you with a sour taste in your mouth at first. As they say, when life gives you lemons, slice those suckers up and find some tequila.