There’s no doubt data analytics is changing the business landscape. Innovative companies are embracing big data and data analytics to gain customer insights, create new revenue streams, improve operational efficiencies, and help drive more lasting customer relationships. Yet there are still many common misconceptions about data analytics.
However, for every business that’s embracing data, there are many that aren’t. It’s an unfortunate reality that many businesses have no data analytics strategy in place at all. Too many businesses are operating with endless reams of data that are calling out for attention.
So why aren’t they doing something about it?
For many businesses, data analytics can seem like an intimidating prospect and a “nice to have” rather than a “must have.” For some business owners, there’s simply a lack of understanding about what data analytics means and how it can add value. Despite this fact, it’s becoming increasingly essential in maintaining a competitive advantage. And most commonly, the field of data analytics is just completely misunderstood.
Following is our take on the most common data analytics misconceptions we hear in the market:
1. It costs far too much
The belief that you need massive clusters of cloud-based servers supporting a large team of data scientists may be true for a handful of large, multinational businesses. However, the reality is that any firm, regardless of its size or budget, can get started with data analytics on a shoestring.
Chances are you already have the data sitting in your ERP, finance system, or on your server. It’s simply a case of working out what you want to analyse, and how.
There are also several free or inexpensive tools on the market that you can use to interpret your data. What’s most important is that you think carefully about what you want to achieve in the first place.
Additionally, for most of our clients, the return on their data analytics investment is relatively immediate. With the right analytics system in place, our clients realise a whole raft of benefits, from identifying new revenue streams to encouraging more repeat sales, and determining and redressing operational inefficiencies.
2. It’s only relevant for big business
Often, we have clients tell us that they don’t believe data analytics will add value in their small or mid-size businesses as they don’t have enough data at hand. The term ‘big data’ is actually misleading as it’s not about using vast quantities of data – but about tapping into any available data to drive big insight.
Contrary to common belief, size doesn’t matter in this case. The quality of a business’ data is far more important.
Besides, for a smaller business, the benefits of data analytics can often be more immediate, and the benefits far more significant. By using data to isolate and then rectify an ineffective point on the supply chain, for instance, a small retailer can realise very rapid cost and time savings.
3. Analysis can happen in isolation
When it comes to data analytics, simply crunching the numbers and providing reports isn’t enough. To add measurable value, data analytics requires a considered, strategic approach, one that is both business-centric and goal-focused. Your data analysts and scientists need to work hand-in-hand with your business owners and key stakeholders. This ensures that any data extraction and analytics are performed with the ‘big picture’ in mind.
While you can let your data analysts do their thing, it’s also important to keep them in the business loop. Work collaboratively and ensure all decision makers are in the same room.
4. It’s all too technical for me
While it may seem intimidating to the non-technical business owner, investing in data analytics shouldn’t require you to have an IT degree. In fact, when you partner with the right data analytics organisation, the whole process should be very simple, clear, and straightforward.
Data Analytics is about examining data in the context of your business and your clients. For you, it’s about knowing what’s important for your business, rather than knowing how to code, or being skilled in creating and managing a data warehouse. Data is important, and good governance is essential. However, the chances are that you already have high quality data in place. You simply need to interrogate it.
A wise approach can be to start simple and build the extent of your analysis over time. Things like machine learning and artificial intelligence can add value. However, they are not always appropriate in the early phase of a data analytics project.
5. It’s a job for IT, not my department
Often, we see data analytics relegated to a firm’s IT department. In reality, data analytics is crucial in every area of your operations – from human resources to marketing. A whole-of-business approach is essential when it comes to embracing data and using it to drive productivity and strategic gains. Data analysis is about exploring organisational data and identifying insights that can provide an advantage to the business that wasn’t available previously.
Still unsure if data analytics is right for your business?
Contact us using the form below or give the expert team at Syntagium a call on +61 2 9238 6897 or visit www.syntagium.com.au.