Importance of data analytics for small businesses
We are living in a digital period where data seems to remodel every aspect of business. Companies are using data analytics to generate workable trade acumen which can be used to completely alter the face of your organization.
Question arises, what is data analytics exactly?
Data analytics is a process to gain actionable insights with the help of raw available data.
Data analysts typically analyse raw data for insights and trends. They use various tools and techniques to help organizations make decisions and succeed. Essentially, it can give you a competitive edge in your industry, and provide you with a serious boost in business performance.
Most commonly used tools are Google Analytics, IBM Watson Analytics, and then there are multiple other companies that provide advanced data mining tools to help small or mid-sized corporations, such as ClearStory Data, Kissmetrics, InsightSquared, Canopy Labs, Tranzlogic and Qualtrics etc.
However, usage of big data is not just limited to big giants, rather it is now also being used by various SMEs to be ahead in the market. Reports show that SMEs count for nearly 90-92% of businesses globally and accounts for close to 50-60% of the employment worldwide. India has approximately 6.3 crore MSMEs. The Indian MSMEs sector contributes about 29% towards the GDP through its national and international trade.
What could be the key benefits for Small business owners:
· Friendly commerce- Usage of chatbots is very common these days. It not only saves time but increases customer engagement and reduces a lot of customer pain as it routes service requests to tracking packages and personalizing product suggestions or handling returns, and can offer solutions in many cases before customers even ask the questions.
· Competitive product offering- Using the data collected from your sales record and these chatbot platforms, companies can easily understand the purchase pattern of their consumers and also the specific requirements to best suit the needs of your customer. It can also help in determining better offers and rewards.
· Intelligent marketing- Advanced tools can combine data mining, statistics and sales modelling to better predict future outcomes. Businesses can leverage this for customer segmentation and building their digital strategies.
· Identifying new markets- Competitive analysis can help a great deal to small commerce. They can identify potential opportunities by explaining the competitor’s strategies and how to tweak it to your best use.
· Automating workflow- Most of the SMEs are run on sole proprietorship basis which means nearly 50% of the owner’s time is spent on managing day to day businesses activities hardly leaving anytime to think of new business development. Automation reduces the need for time spent on repetitive tasks and human resources saving time and money both.
Limitations for SMEs while adapting new technology
· Lack of skilled workforce- This is a big-time challenge for small businesses to implement the analytical tools as they require full time administration and proficient IT crew. Lacking right number of skills and effort makes it difficult to incorporate.
· Budget spend on technology- These companies are already on tight budget and keep a high control on every penny spent. Therefore, investing a good amount of money on an integrated analytical infrastructure is just another hurdle for SMEs.
· Hesitant about the ROI- As small companies lack the required IT skill-set, they are often doubtful about the ROI on the investment on such expensive tools.
· Ineffective implementation of data insights- There is one more hidden problem with SMEs which is inability to interpret and make sense of the data collected. 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 BDА.
It has been commonly seen that most of the MSMEs like to run their business on their own without taking necessary help. But in such testing times where major business transformation is the only way to keep running your business and winning it, taking guidance becomes must. This is where consulting companies comes into picture.
Consulting firms can help you implement these kinds of advancements at minimum cost or they can run analytics on your behalf sparing you with all complications and expenses involved at affordable prices.
Also, business consultants are not just service providers but are also your business coach who can advise you on other multiple facets of your business.