Innovative companies are embracing data analytics to gain customer insights, create new revenue streams, improve operational efficiencies and help drive more lasting customer relationships.
So why aren’t all firms adopting data analytics?
There are 5 common reasons why:
- The costs are too high
- It’s only relevant for big business
- Analysis can happen in isolation
- It’s too technical for us
- It’s a job for I.T., not my department
For every business that’s embracing data, there are so many that aren’t. And I mean, SO many!
It’s an unfortunate reality that many businesses have no data analytics strategy in place at all. Too many businesses are operating with endless reams of data that are calling out for attention.
So why aren’t they doing something about it? Data analytics can seem like an intimidating prospect, and a ‘nice to have’ rather than a ‘must have’.
For some business owners, there’s simply a lack of understanding about what analytics means and how it can add value despite the fact it’s becoming increasingly essential in maintaining a competitive advantage.
Most commonly, the field of data analytics is just completely misunderstood.
All of these are misconceptions at best; excuses at worst.
1. The cost of data analytics are too high
The belief that you need massive clusters of cloud-based servers supporting a vast team of data scientists may be true for a handful of large, multinational businesses. However, the reality is that any firm, regardless of their size or budget, can get started with data analytics on a shoestring.
Chances are you already have the data sitting in your ERP, finance system or on your server. It’s simply a case of working out what you want to analyse, and how.
There are also several free, or inexpensive tools on the market which you can use to interpret your data. What’s most important is that you think carefully about what you want to achieve in the first place.
Additionally, for most of our clients, the return on their analytics investment is almost immediate. With the right analytics system in place, our clients realise a whole raft of benefits, from identifying new revenue streams to encouraging more repeat sales and determining and redressing operational inefficiencies.
2. It’s only relevant for big business
Often, we have clients tell us that they don’t believe data analytics will add value in their small or mid-size business as they don’t have enough data at hand. The term “big data” is actually misleading as it’s not about using vast quantities of data but about tapping into any available data to drive big insight.
Contrary to common belief, size doesn’t matter in this case. The quality of a business data is far more important.
In addition, for a smaller business, the benefits of analytics can often be more immediate, and the benefits far more significant. By using data to isolate and then rectify an ineffective point on the supply chain, for instance, a small retailer can realise very rapid cost and time savings.
3. Analysis can happen in isolation
When it comes to data analytics, simply crunching the numbers and providing reports isn’t enough. To add measurable value, data analytics requires a considered, strategic approach; one that is both business-centric and goal-focused. Your data analysts and scientists need to work hand-in-hand with your business owners and key stakeholders, to ensure that any data extraction and analytics is performed with the ‘big picture’ in mind.
While you can let your data analysts do their thing, it’s also important to keep them in the business loop. Work collaboratively and ensure all decision makers are in the same room.
4. It’s all too technical for us
It is intimidating at first to the non-technical business owner. Yet, investing in data analytics shouldn’t require you to have an IT degree. In fact, when you partner with the right data analytics organisation, the whole process is very simple, clear and straightforward.
Data Analytics is about examining data in the context of your business and your clients. For you, it’s about knowing what’s important for your business, rather than knowing how to code, or being skilled in creating and managing a data warehouse. Data is important, and good governance is essential. However, chances are that you already have high quality data in place. You simply need to interrogate it.
A wise approach can be to start simple and build the extent of your analysis over time. Things like machine learning and artificial intelligence can add value, but they’re not always appropriate in the early phase of a data analytics project.
5. It’s a job for I.T., not my department
Often, we see data analytics relegated to a firm’s IT department.
In reality, data analytics is crucial in every area of your operations from human resources to marketing. A whole-of-business approach is essential when it comes to embracing data and using it to drive productivity and strategic gains.
Data analysis is about exploring organisational data and identifying insights that can provide an advantage to the business that wasn’t available previously.
Still unsure if data analytics is right for your business?