We are living in an era of digitisation, where data is transforming every aspect of a business. Companies are now using data analytics to produce actionable insights, which are used to streamline operations, manufacture products targeting specific requirements of customers, and increase revenue. However, analysing such a huge amount of data to gain insights is no longer restricted to large businesses. Simply put, small and medium businesses (SMBs) are also using business analytics to gain better insights into their business.
Relationship Between SMBs & Data Analytics
SMBs reportedly count for approximately 90% of businesses across the globe and accounts for 50% of the employment worldwide. Some additional data also states that formal SMEs contribute up to 40% of the GDP in emerging economies. Even the policymakers and economists believe that SMBs are a potent driving force for the overall economic growth of a country. Thus the requirement to improve these small and medium businesses in this competitive era is crucial.
In response to the colossal amount of data produced and the increasing demand for customer engagement, SMBs are now using a variety of analytical tools and platforms to support the business and increase their bottom line. Data analytics techniques can effectively make use of the collected data giving them a competitive edge while increasing productivity. It also helps in reducing costs, enhancing marketing practices, and strengthening the ability to foresee trends.
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By deploying sophisticated analytics tools combined with artificial intelligence, SMBs can extract immense value from data. Beyond making day-to-day tasks simpler and improving the quality of customer interactions, analytics can also provide important strategic support for businesses. It can also help in predicting outcomes, offer a better understanding of one’s decisions, and can also be used to manage risks better.
Most large enterprises have integrated analytical framework to their traditional infrastructure to enhance their businesses however, as technologies mature, companies need to adopt updated frameworks for handling their data which becomes difficult for large companies. On the other hand, SMBs might find it easier to reap benefits from these newer frameworks with greater agility and speed.
Analytics To The Rescue
To survive in today’s competitive marketplace SMBs need analytical tools that the big boys use. However, they usually cannot compete with enterprise-level corporations in terms of finance and resources. Therefore several vendor organisations have come up with easier and cheaper analytical solutions for small and mid-sized businesses.
Google Analytics: One of the big companies providing analytical assists for SMBs is Google. Google’s free digital platform, Google Analytics provides tools for small businesses to analyse their website data. With Google Analytics, one can aggregate long term data to reveal valuable information and make data-driven decisions. Information like website traffic count, audience engagement, and social media traffic can easily be read by Google Analytics, which can then be used to create a better experience for customers.
IBM Watson Analytics: This is another platform that makes advanced business analytics accessible for SMBs. IBM Watson Analytics doesn’t require complex data mining skills, instead, it offers an automated suite for businesses to present their data and make informed decisions. This user-friendly service runs on ‘natural language’ technology, which allows companies to use all sorts of data including marketing, finance, human resources, etc. in a unified platform to identifying problems and recognising patterns. SAS is another giant in providing business analytics software which transforms data into insights for large enterprise as well as the small ones. It offers an easy-to-use automated platform that believes in accomplishing more with less.
Analysing data with the help of intelligence doesn’t have to be a burdensome job for businesses. Apart from tech giants, there are several other companies that are providing advanced data mining tools to help small or midsized corporations, such as ClearStory Data, Kissmetrics, InsightSquared, Canopy Labs, Tranzlogic and Qualtrics to name a few.
One of the most obvious ways of involving analytics in a business is using the technology to read a big amount of data and apply it for problem-solving. Big data analytics (BIA) provides clarity to organisations and help them improve their business model. Another interesting way of including an analytical module in business is to uncover new opportunities in the field of operations. BIA will discover opportunities along with analysing the risk factor involved.
Implementation of the right BIA tools is the key aspect of the technology. One needs to choose the right tool in order to streamline its business processes and in turn, bring down the cost. Analytics and BIA tools are increasing exponentially opening up huge opportunities for SMBs.
Also Read: Big Data Analytics Adoption in SMEs
Limitations For SMEs
Despite all the hype with the data revolution, SMBs often fail to successfully implement an analytical framework in their businesses due to certain barriers. These small businesses are usually not so robust to withstand the global competition, and in order to survive in this market, they must be able to monitor their businesses efficiently.
Lack of skilled workforce: The biggest challenge for small businesses to implement BI and analytical tools is the lack of a skilled workforce. Most of the tools and platforms available in the market by big tech vendors usually require full-time administrators and a proficient IT crew to implement and work with it. Regardless of integrating BI environment small businesses usually lack the right amount of skills and effort it takes to keep that running.
Analytics budget: Another reason that has always scared away SMBs is the amount of funding required to run a fully integrated analytical framework. It has always been easy for large enterprises to invest in a huge amount of money in storage space for data and analysing it with more expensive tools, however, it turns out to be an impractical approach for SMBs. Lack of financing and strict regulatory requirements often add more obstacles for SMBs.
Skilled workforce: Due to the absence of an experienced workforce, SMBs are doubtful about the ROI post implementing complex analytical tools or setting up an in-house data processing framework. Also, with the constrained IT capacities, small businesses are hesitant to use their remaining resources into high priced investments.
Lack of education: Another not so noticeable problem plaguing SMBs is the ability to interpret and make sense of the data collected. Modern technologies will help in gathering data however that’s not enough for businesses to improve their operations. Choosing the right metrics to track the progress of the data analysis and placing the right analytical tool to convert the data into actionable insights are also crucial while deploying BDA. SMBs usually lack structured guidelines for data management, bandwidth for setting up a holistic data infrastructure, and appropriate tools to automate repetitive analysis processes.
Some important factors businesses need to keep in mind while implementing analytical tools are:
- Using an integrated platform
- Using Analytics as a service
- Picking up the right technology for the right work
- Using better resources
- Having a rebuilt library
- Incorporating self-service capabilities into the process
Developing a predictive model is not enough, SMBs need to create actionable insights and therefore the business requires the power of knowledge and needs to know the right implementation of it. Apart from engaging customers, analytics has also proven useful in forecasting sales, cross-selling, designing, manufacturing, and business segmentation.
Many SMBs also feel hesitant to include a newer technology into its business or to release its customer data to a technology platform due to the fear of privacy breach. By acting on the insights produced by analysing the data, SMBs can transform their everyday operations and can also enhance their business models for better ROI.