Companies of all sizes, but especially smaller ones, want to use data and corresponding analysis methods, and there is a good reason for that:
According to a recent U.S. study, companies that use analytics tools and corresponding methods generate significantly more revenue than companies that do not.
"Within the last few years, small- and medium-sized businesses are increasingly adopting business analytics practices that are helping them grow and improve in a variety of ways. Business analytics and the big data sources that it consumes can help managers increase market share, increase customer profitability, increase traffic and conversion, reduce cost, increase employee productivity and increase customer satisfaction, retention and intimacy." Source: University of Georgia Small Business Development Center, no date
Data-driven or data-centric work is a term for handling the amounts of data that a company generates as part of its normal business operations. This data is classified as structured if it is highly organized and easily searchable, and unstructured if it is unorganized and/or stored in silos, making it more difficult to capture, process, and interpret.
Data-driven companies use data to improve the efficiency of their operations and promote innovation.
While the use of scientific techniques to optimize resources is not new, today there are new tools and techniques to tap into central resources such as data sources and create new perspectives for business planning and innovation.
According to a report from the US Service Corps of Retired Executives (cited in: Nathan, 2021), almost 51% of small business owners believe that data analysis is a must for their business, but only 45% of them perform any form of data analysis. Additionally, 73% of small business owners reported that acquiring new customers is their top priority, while 63% consider retaining existing customers as their biggest challenge.
Source: Aiden Nathan, Big Data for Small Business: A Complete Guide, 2021.
Here are some of the ways companies use data to gain an advantage over the competition:
Many entrepreneurs and small business owners believe they don't have the time to use data analysis and business intelligence, but today there are external service providers available to support you and take on most of the work. And if you want to permanently integrate data analysis into your business processes, there is competent help available for that too. Both models are suitable for gaining a competitive advantage by using internal data.
It is very likely that you already have more than enough information to start a data initiative without even realizing it.
Indeed, various tools that you already use offer their own analytical functions, providing overviews of the data collected and stored by that tool. Typical examples include website logs and statistics, Google Website Analytics, reporting tools of various online platforms, reports from your shop system, log files of certain standard and specialized software. Moreover, you can access such data anytime and anywhere it is convenient for you. For example, the major social media platforms allow you to directly access reports on your smartphone. The limitation is that all such offers always refer only to the respective service, the respective system.
The crucial thing is to bundle these various data streams in such a way that they complement each other and completely reflect the reality of your business. They should ideally provide a uniform and easily comprehensible overview of the entire process in a comprehensive manner, without giving up access to details. There are elegant solutions available to help you with this.
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