Small and Medium-Sized Companies: The Highly Competitive Data Analysis Landscape is Good for Your Budget
You’re a small or medium-sized business leader reading the news each day watching the amazing gains that companies like Amazon, Google and Facebook are producing by analyzing their data. You lean back in your chair, overcome with jealousy because you know you’ll never have the budget they have or the multiple floors of PHD mathematicians that they employ for analytics. You feel defeated. You know you should be using analytics to improve your business, but how can you possibly compete in this world?
The great news for smaller businesses is that data analysis and graphical visualization tools have come such a long way in recent years with the capabilities and ease of use improving all the time. The market for these tools is highly competitive, so companies that offer solutions in this market have no choice but to race forward in an attempt to stay ahead of the competition. This situation is beneficial for companies looking to buy these tools since the high competition level has brought prices down far enough that every business can afford them.
For example, Microsoft’s Power BI has a free version and you can find every “how to” question about this product on YouTube, graciously donated by other users. Only when you wan to start sharing dashboards with other users do you need to pay $10/month for additional capabilities. At $10/month, this is amazingly affordable.
Another favourite tool of mine is Tableau. High in capabilities but also higher in price, smaller businesses can afford fewer registered users but if a few is all you need, this is a fully-featured product. You won’t see a free version of this one but you can try it out for 30 days and existing users are just as generous with their “how to” videos on YouTube as the Power Bi users. I suspect many are like me and spend their time in both tools. For a deeper comparison, see the article called, “Which is Better… Tableau or Power Bi?”
But what does a company do with these tools?
These tools have become invaluable in being able to “see into the business.” Suppose you’re a company that carries 1500 retail SKUs. Do you know the likelihood of customers buying each SKU? Do you know if you are carrying inventory of SKUs that are only purchased once a year? Extra inventory equals cash tied up that the business can’t use.
When you look at your workforce, do you know how many times men and women will apply for internal positions before they conclude they should look externally? Do you know the factors that are driving safety? Where to find the best candidates?
Analytics allows HR to focus its efforts on where it can be the most successful in its hiring, promotions and performance processes. In this way, the business does not wasting time on activities that yield not value.
In a final example, envision a screen of graphs and information which allow leaders to easily see the overall picture of how the business is performing. If your company is a little larger, imagine such a screen customized to each functional area… a screen for your financials, supply chain, operations and Human Resources.
So many examples could be listed here about using data for decision-making but the important point to understand is that a company will get the most out of data analysis by focusing their efforts on business problems that need to be solved. In the first example, it was about making better decisions on which inventory to carry. In the second example, it was about productivity gains from assessing where the company gets it “biggest bang for the buck” when it comes to hiring.
You can read a few case studies on our pages dedicated to HR Analytics, Supply Chain Analytics, Diversity Analytics and Business Analytics. For fundamental information on metrics and measures for business performance, visit our Metrics & KPIs page.
By now, you’re leaning back in your chair again wondering if this is really possible. As an industry expert in this space, I have seen companies spend several hundreds of thousands of dollars on enterprise-wide software solutions for analytics. I’ve also seen budget-savvy companies roll up their sleeves, prioritize what they need to analyze and shoestring successful analytics projects together. These companies intelligently focus on using data to solve the problems that are most urgent for them. You don’t need to analyze everything about everything.
You’re now leaning forward in your chair thinking, “Okay, let’s talk dollars.” There are solutions out there, like the ones mentioned above, where you can have dashboards of information in front of your leaders for less than $2,000… and possibly free. There are various levels of cost above that where you trade increased cost for additional features depending on how you need to share the information and with whom.
Which business question does your company need to answer first?
Tracey Smith is an internationally recognized business author, speaker and consultant. She is the author of multiple books and hundreds of articles. Tracey has worked with and advised organizations, both well-known and little-known, on how to use data analytics to impact the bottom line. If you would like to learn more, please visit www.numericalinsights.com or contact Tracey Smith through LinkedIn. You can check out her books on her Amazon Author Page.