Is Data Analytics also available for small and medium-sized companies?
Some tips on how analytics can help improve performance for small and medium-sized businesses.
SMEs operate in a highly dynamic and increasingly competitive market place. There is constant pressure to improve and maintain profitability and competitive advantage. They must deal with increasing customer demand to maintain their position.
As small and medium companies increasingly face challenges in growing and innovating, a business-friendly approach, and specifically one that focuses on Data Analytics (DA), can be used to help companies take the right steps to remain relevant and competitive in an increasingly complex and disruptive world.
But what is Data Analytics and how can it help small and medium businesses?
Data or Business Analytics can be explained in a simple and summarized way: DA combines big data technologies and principles with advanced statistics, algorithms and business intelligence tools to derive business value from mountains of data and provide an objective analysis of critical business issues.
These are just some of the many benefits that Analytics can bring to an SME:
· Elimination of non-essential expenses: Many businesses spend millions of dollars on marketing, advertising, business-to-business relationships, and other costs that are often not relevant. However, analytics allows companies to monitor the most cost-effective resources that are essential to success. By only focusing on the important expenses, they can reduce their overall costs and make their products and services more attractive to the customers.
· Better service quality: When there is an increase in customer complaints, companies can use analytics to easily identify the problem. That way, they can quickly develop new procedures to avoid this and make the service more suitable.
· Diversification and globalization: Another benefit of analytics is that companies are able to focus on their core business instead of just working on small aspects of their activity. This means that when analyzing data they will be able to detect the needs of each market and adapt to them. When a small business grows and needs to focus on more and more services and customers, they can easily track their sales and profit margins, which is something that is really difficult in a large business.
· Better customer service: Customers are getting more and more demanding. They expect that businesses will understand their needs and provide high-quality service. Analytics will help companies in understanding their customer base, so they will be able to improve their business based on their feedback.
· More efficient business processes: An important benefit of analytics is its ability to help businesses become more effective. DA is widely used to improve business processes, such as production, customer service and inventory management. This is done by focusing on the processes, understanding how they work and identifying their weaknesses.
· Last but not least, is the substantial improvement in the management of business risks, this is of utmost importance in SMEs, since a large company in most cases has the financial capacity to quickly recover from its mistakes, but for smaller companies the story is very different.
One of the best ways to handle your business uncertainties is by implementing specific techniques based on Data Analytics. For example, anomaly detection plays a critical role in generating business insights and maintaining core operations. Timely detection of anomalies can empower you to prevent risks and curb their cumulative effects on business.
How can an SME benefit from these new approaches, if it does not have a staff with this knowledge?
As discussed above, analytics should be at the heart of any business, but managers are often too busy with day-to-day operational problems and do not know how or have little time to analyze the data needed to make better decisions.
One of the most effective ways to achieve data analysis in small and medium-sized companies is through the services of an experienced business consultant, who will guide you by applying a well-defined process with a business-oriented approach that will guarantee better results. A business analytics consultant will ensure consistent progress by ordering and analyzing data to improve your business with a 360-degree view.
The main limitation of SMEs to implement Analytics is the fact that they think that these new approaches are only applicable to large companies or that they do not have sufficient resources to tackle projects of this nature.
Certainly, these types of services in the past were extremely expensive, at least from the perspective of an SME, but with the advancement of new technologies (computing power, storage capacity, cloud services, etc.) these solutions are increasingly accessible, with little or no investment in hardware or software, and at very reasonable prices compared to the benefits it brings.
How does the DA process work?
DA often begins with a general description or diagnosis of the business, then a process is applied that will help to understand in detail the main limitations, the options for improvement and how to incorporate data analysis as a new way of managing that allows to generate a significant competitive advantage in your industry.
The DA process usually follows the following steps:
1. Identify and describe your business needs.
2. Assess your current data
3. Identify sources of data
4. Find potential analytical methods and models
5. Test ideas and models
6. Implement the solution
It is important to note that this process is not linear, on the contrary, it permanently returns to previous stages to make improvements.
Once this process is completed it is possible to assess where the business can improve its efficiency and use of resources. This approach not only allows SMEs to monitor, measure and track the progress of their businesses, but they can also experiment with some changes and quickly measure their effectiveness.
Data Analytics has several key advantages over the traditional approach. It allows for greater speed, scalability, adaptability, efficiency and flexibility in the management of large amounts of data across multiple heterogeneous databases, enabling more proactive information management strategies.
This approach can give SMEs a competitive advantage through helping them to identify new and profitable business opportunities, better assess risks, gain a clear insight into customers and their buying behaviours and understand the competitive landscape more effectively.
DA can help small and medium businesses to save significant amounts of money by improving efficiencies and finding new ways to be more efficient, more profitable and most importantly — more successful.
