Why all businesses must have a data analytics strategy
Uncertainty and anxiety about the future are new realities for many small and medium-sized enterprises (SMEs). Decision-making and problem-solving are two major factors keeping business owners and executives awake at night. The good news is that, regardless of the size of the organisation, virtually every problem or business decision can be addressed using data analytics, according to RSM Australia.
Capturing and making sense of organisational data is now giving business leaders an edge. It offers operational resilience and predictive accuracy, and helps drive precise action that improves business performance and profitability.
Srdjan Dragutinovic, director, data analytics, RSM Australia said all organisations, regardless of size, must have a data analytics strategy to remain competitive. It’s common for SMEs to view data analytics as something big organisations do, but they should realise that data analytics is applicable to everyone in business.
“It’s also important to understand how to make data analytics work for each business. For example, SMEs often face challenges when it comes to the types of data they collect and how they use it. Data collection can be as straightforward as compiling customer information in a simple spreadsheet, or as complex as collecting data from thousands of pieces of equipment every second, culminating in hundreds of millions of data points collected each day. To avoid confusion and unnecessary effort, businesses need to identify what kind of data will help them solve their key challenges and focus on collecting and analysing that data.”
According to the global Analytics Impact Index, only eight per cent of businesses lead with data analytics, and Chinese businesses come out on top. (1) Conversely, Australian organisations lag behind when it comes to the maturity and impact of their data and analytics capabilities. Deloitte’s Global Perspectives for Private Companies Report, released in 2018, showed that more than 40 per cent of Australian private companies planned to invest in business intelligence and data analytics; however, they were daunted by the fact that data analytics spanned such a broad range of capabilities including data integration, data management, data warehouse, machine learning, data modelling, and application design. However, companies that did become data analytics leaders achieved 60 per cent more profits. (2)
Mr Dragutinovic said it may seem overwhelming to develop and implement a data analytics strategy. Getting the foundations right are critical to achieve a data-driven, insights-led culture, no matter the size of the business or industry in which it operates. SMEs should start with a clear view of the strategic objectives and the key issues they are looking to solve.
Data analytics plays a vital role in equipping decision-makers with the ability to anticipate problems and market changes before the occur. For example, by analysing a customer’s pathway through an organisation, organisations can optimise the journey to make it as smooth as possible for customers, eliminating pain points that may lead to dissatisfaction. For example, data can be used to identify the points where conversations are repeated, knowing at which point of the process the most complaints come in, and identifying which parts of the process take too long. This helps organisations improve internal processes and efficiencies, reduce costs, and enhance the customer experience.
Data analysis can also be used to identify where technology can remove costly, manual, repetitive tasks.
RSM Australia warns that businesses will be left behind if they don’t start leveraging data analytics, particularly in the increasingly fast-paced digital economy.
Mr Dragutinovic said some businesses don’t realise just how much quality data they have to help grow their business, while others are overwhelmed by the amount of data they have and don’t know where to start. Some would say that failing to leverage data can be viewed as tantamount to negligence; it is as fundamental as that.”
A full copy of the latest thinkBIG report titled Leveraging data to unlock value in your business can be downloaded here – https://www.rsm.global/australia/thinkbig-report/data-analytics.
References:
(1) https://www.insideinfo.com.au/business-analytics/resource-download/how-build-data-driven-enterprise
(2) https://www2.deloitte.com/au/en/pages/deloitte-private/articles/global-perspectives-private-companies.html
