Man, has “data” become a buzzword over the last few years.
Data analysis. Data-driven decisions. Business intelligence. Predictive analytics. Dashboards.
Everybody wants data.
But how valuable is data if you don't know what to do with it?
And who actually owns the data? Who has the rights to it? Who can use it? Who gets to decide how it is analyzed?
Sometimes data feels a little like the ring in The Lord of the Rings—everybody wants it, everybody thinks it is incredibly valuable, but not everyone knows exactly why they need it or what they're supposed to do with it once they have it.
The reality is that most pharmacies already have an incredible amount of information.
Prescription data. Purchasing data. Inventory data. Customer data. Financial data. Clinical data. Staffing data.
And there are more tools than ever that can aggregate all of that information and turn it into reports, dashboards and charts.
That's a good thing.
But it can also become overwhelming.
We've seen pharmacies receive more and more reports without necessarily having a better understanding of what they should do with the information.
The goal isn't to have more data. The goal is to make better decisions because of the data.
Here are five things we think pharmacy owners should consider when it comes to making their data useful.
Don't start with the report.
Start with the question.
What is a decision you've been struggling with where better information would give you more confidence?
Should you expand or reduce your hours?
Does delivery actually make you money, or is it costing you money?
Are flu shots worth the time and resources required to offer them?
What should you be stocking in your front end based on what your customers are actually buying?
Should you hire another employee?
Should you add a new service?
These are business decisions where data can help take some of the guesswork out of the equation.
Instead of asking, “What does my data tell me?”
Start by asking, “What do I need to know?”
Having a spreadsheet with 50 columns doesn't necessarily mean you have business intelligence.
If you're looking at numbers without understanding what question you're trying to answer, you can spend hours analyzing information and still not know what to do next.
The value comes from connecting the data to a decision.
Revenue by itself is interesting.
Revenue by service, compared to the labor and resources required to produce it, is much more useful.
Purchasing volume is interesting.
Purchasing volume combined with acquisition cost, reimbursement, contract requirements and inventory movement can actually help you make a purchasing decision.
Data becomes valuable when it has context.
Even if the owner understands the data, that doesn't mean the rest of the team will.
If you're trying to change behavior, educate your staff or motivate your team, you have to make the information digestible.
Nobody wants to sit through a 40-page report every Monday morning.
The question should be:
What does this mean, and what do we need to do about it?
Good reporting shouldn't just tell your team what happened.
It should help them understand what matters and what action needs to happen next.
Not every piece of information needs to be reviewed every day.
Some things should be monitored continuously. Some should be reviewed weekly. Others may only make sense to look at monthly, quarterly or when you're making a specific business decision.
Too much analysis can be just as counterproductive as too little.
If you're constantly pulling reports and looking at numbers without taking action, you've created another administrative task instead of a business tool.
Build data review into your normal workflow.
The right information, reviewed at the right time, is much more valuable than constant reporting.
This may be the most important one.
Data shouldn't replace experience.
Think about a football coach on fourth down.
The analytics may say one thing. The score may say another. The clock matters. Field position matters. The weather matters. The opponent matters.
And then the coach has to make a decision.
Sometimes you punt.
Sometimes you go for it.
The best coaches don't ignore the data—but they don't blindly follow it either.
Pharmacy owners are no different.
You have years of experience with your customers, your staff and your community. Data can give you information you couldn't see before, but you still have to apply your experience and judgment to determine what makes sense for your business.
Use data to inform your gut—not to replace it.
At Pharmacy Marketplace, we believe data should ultimately make the life of a pharmacy owner easier.
We're not interested in giving you another report just because we can.
We're interested in helping you understand what is happening in your business, why it is happening and what you can do about it.
That's particularly important when it comes to purchasing.
There is a tremendous amount of information behind every purchasing decision—supplier pricing, acquisition cost, reimbursement, inventory, wholesaler requirements, buying group commitments and availability.
The challenge isn't collecting all of that information.
The challenge is turning it into a decision.
That's where we believe purchasing intelligence can make a difference.
The future of community pharmacy isn't going to be won by the pharmacy with the most data.
It will be won by the pharmacies that can take the information they already have and use it to make better decisions.
So go ahead and collect the data.
Just make sure you know why you are collecting it, what question you're trying to answer and what you're going to do when you get the answer.
Because data sitting in a dashboard isn't intelligence.
Intelligence is knowing what to do with it.