Data analytics has become an indispensable tool for businesses across the globe. With its capacity to generate actionable insights, it’s no surprise that organisations leveraging data effectively have seen an average profitability increase of 8% and a cost reduction of 10%. The significant outcomes and improvements that businesses can experience will put pressure on managers to make the move, driven by the rapid digitalisation of data and the growing demand for data-driven decision making.
Numerous businesses still struggle to utilise their data to its fullest, or near full potential. This article discusses the significance of data analytics, the various types of analytics, and how they can be employed to drive agility, performance, and success for small and medium-sized businesses.
Understanding Data Analytics: Data analytics involves analysing raw data to draw meaningful conclusions, which can be applied in diverse ways such as cost reduction, productivity optimisation, product development, marketing, growth strategy formulation, and revenue generation. Data analytics typically falls into four categories:
- Descriptive analytics: Provides insights into past and current performance.
- Diagnostic analytics: Examines past performance to determine cause and effect relationships.
- Predictive analytics: Utilises statistical models to anticipate future trends and outcomes.
- Prescriptive analytics: Employs artificial intelligence and Big Data to recommend optimal actions based on predicted outcomes.
The Power of Data Analytics: In today’s business landscape, data analytics is essential for businesses to understand their current state, anticipate future outcomes, and adapt to market changes. For example, big data analytics can assist eCommerce companies in preparing for potential supply chain disruptions. Or, your small to mid sized manufacturing plant can look at employee data to predict the likelihood that a new employee will churn within 6 months.
In overcoming data analytics challenges, organisations often face three primary challenges in data analytics: data silos, knowledge gaps, and data gravity. To overcome these obstacles, businesses must unify their data, democratise access, and reduce the friction associated with handling data.
Leveraging data analytics for business growth, and opportunities with data analytics offers numerous benefits for businesses, including:
- Business intelligence: Helps companies identify trends and patterns, paving the way for innovation.
- Customer intelligence: Enhances understanding of customer behaviour and preferences, ultimately improving customer satisfaction and experience.
- Market intelligence: Enables businesses to anticipate and respond to shifting market trends and competitor strategies.
- Streamlined operations: Enhances operational efficiency by gathering and analysing process data.
- Cost management: Identifies cost-saving opportunities through improved inventory and staffing management, as well as efficient supply chain routing.
- Risk mitigation: Helps businesses predict and mitigate risks, such as loan defaults or theft.
- Unifying data: Provides a complete view of a company’s data, leading to better decision-making and reduced overhead.
The growing impact of data on business success means that data-driven companies are outperforming their competitors, with businesses efficiently utilising data being 58% more likely to beat revenue goals.
Data analytics is also transforming industries such as fintech, manufacturing, and retail. As businesses harness the power of data, they can significantly improve customer satisfaction, revenue, and operational efficiency.
At RISESI Limited, in one of our most recent manufacturing success stories, we provided a world leading marine construction company with the capabilities to measure and improve factory throughput, efficiency and quality. RISESI Limited also implemented processes (including a custom governance and project management application) to enable the effective governance and execution of critical objectives, and measure the success with which these critical objectives are being implemented, ensuring the company learns and acts on information (data) gathered.
In another instance, working with a leading Travel and Tourism company, with offices across the globe, we analysed employee data, to determine attributes and indicators which identified probabilities of employee churn or longevity, thus empowering the company to focus efforts on candidates with specific attributes.
These are just a few simple examples of how data can help companies.
In conclusion, data analytics is an invaluable tool for businesses of all sizes, driving agility, performance, and success. By overcoming data-related challenges and leveraging the full potential of data analytics, SMEs can unlock new opportunities and create a competitive edge in an increasingly data-driven world.