[This article was written by Craig Middleton.]
Technology has opened almost unlimited opportunities for businesses to boost their efficiency and productivity while also improving quality. For example, big data has given companies of every size a chance to profit from business intelligence and other analytics derived from big data sources.
Although many firms have yet to integrate analytics into their routine workflows, other companies have. As a matter of fact, some businesses have used their analytics capabilities to create a competitive advantage. Still, business owners and managers can use the following tips to squeeze more even more performance from their analytics data.
Have a Purpose
Without understanding the big deal about big data, some businesses get on the analytics bandwagon without thinking about what they want to accomplish. For this reason, they can end up with software tools and subsequent insights that don’t meet their needs. To improve the benefits they receive from analytics, a company should first assess their needs and create a written plan.
For example, manufacturers can use analytics to find out what their customers do with their products. Similarly, businesses can assess the performance of their products and services while also measuring customer satisfaction. Internally, analytics can identify bottlenecks and redundant tasks that managers can resolve to simplify procedures and reduce expenses.
Analytics can also become a revenue-generating product. Companies can offer their insights to help customers maximize the value gained from their purchases. Even brick-and-mortar businesses such as retail stores and restaurants can use analytics to optimize everything from employee scheduling to merchandising. Ultimately, analytics can help businesses accomplish many things. Specific goals in mind, they might not achieve much at all.
Get the Right Tools
No single solution exists that will precisely meet the needs of every organization. The marketplace offers a slew of analytics software products available design for particular uses that may address the needs of various industries and target markets. Even different departments within a firm may have specific needs that require their own analytics software.
For example, marketers who aim to analyze the behavior of competitors may need specialized tools such as a website scraper to collect the information they need. Meanwhile, people who work in human resources will probably need a different set of tools. Also, some analytics products may have either too many or too few capabilities.
So, business owners and managers should avoid the temptation to make an impulse purchase. In addition to viewing product demonstrations, businesses should involve their IT personnel to help assess the cost of implementation. A software package with a reasonable price tag may require a substantial investment in network and computing equipment.
Some businesses experience such euphoria over implementing an analytic strategy that they forget to assess its performance. With new systems in place, verification becomes important to avoid wasting a lot of time and money. Managers should periodically review the data collected and the reports created by their systems.
In other words, companies should not let their systems run unattended based on the assumption that their new software will accomplish its purpose. Analytics are critical for growth, but only if they provide meaningful insights. Consequently, businesses should carefully define key performance indicators that can serve as benchmarks for the performance of their analytics system.
Of course, a cost-benefit analysis should be part of any performance assessment. If the cost of acquiring and processing data in an organization exceeds the actual benefit in terms of profitability, the total cost of ownership is too high. In such a case, firms should carefully reevaluate their analytics goals.
In conclusion, companies can maker analytics better by starting with well-defined objectives, getting the right tools and measuring their results. Although these activities require time and effort, they can achieve long-term rewards.
Craig has worked in small businesses and entrepreneurship for most of his professional career. He graduated from UC Berkeley with a bachelor’s degree in Marketing. When he isn’t writing or working at his many businesses, he’s spending time with his wife and three children.