Although virtually all SMEs gather a good amount of data, my experience has shown that few use it or use it to its full extent, to drive decisions within the business and to capture opportunities and minimise risks.
Many SME business leaders feel that driving their business with data to allow their business to grow healthy and compete in the market is just something that large companies with hefty budgets can afford. That is quite a natural feeling when most of what anyone hears about is with regards massive amounts of data (Big Data), powerful technological infrastructures, large multidisciplinary teams etc…
The most common problem I find plaguing SMEs is interpreting and making sense of the data they have in their organisation. Various databases or software programmes that SMEs use makes it possible for them to capture data to some extent. Unfortunately, merely having the data doesn’t mean they can use it to improve their business. This means that various SMEs, as they exist in the era whereby everything around them is driven by data, still struggle to:-
- Understanding what kind of business insights their data can provide to them
- Understanding the value and return on investment of implementing analytics tools in their organisation
- Choosing the right metrics to track
- Translating the results of data analysis into action items
- Having ways to check the data analysis done to make sure it is addressing the issues at hand.
I many times am faced with this same comment from various SME business leaders – “I really want to base future decisions on data analysis, but I cannot do so now as I first need to focus on sorting urgent problems before thinking about this.” I smile, because that means that more decision to sort out these “urgent problems” will be taken on God knows what basis.
Many SME business leaders may come to believe that data can create value for their business, but they either don’t have enough time to focus on taking advantage of that data or they don’t see the short-term benefits…..until they are forced to as the business starts facing financial problems.
Therefore, this inability to see the immediate value of data, normally results in indefinitely pushing back data analysis to some point in the future that will never come. For many SME business leaders, data analysis is a nice-to-have, not a must-have. They don’t see that it is exactly because they are more constrained on time and capital, that they need data even more than larger enterprises, because data-driven decision making is how they can optimise their limited resources! They fail to see that proper data analysis is how they can make each euro they invested deliver even more…..and so they operate under the false feeling they could be using their time more efficiently by focusing on something more urgent, like operations or sales.
At the end of the day, any SME business owner knows his or her business better than anyone else. So to get started, you ideally identify a situation or a problem as your use case. It is recommended that being the first, you choose a use case that can be easily measured. Otherwise, you will hit a wall because you will not know where you can get the data from.
One of the most common mistakes when starting to work with data is trying to solve everything at once. It is not about acquiring a lot of data and “seeing what can be done with it.It’s about thinking, what can I measure and what decisions will I be able to make when concluding analysis? If you try to solve several situations at the same time, you will lose focus and it will be very difficult for you to answer the business questions that you have asked yourself. Also, the greater the amount of data you work with, the greater the resources.
It is true that we we are living in the information age, where huge amounts of new data are constantly being generated all over the world. When talking about data in mass media or social networks, we usually refer to Big Data as the only existing data. However do not get yourself biased into thinking that a large amount of data is always necessary to be able to extract value from it. Big Data is just a collection of data that meets several conditions: volume, variety, velocity, veracity and value. So my message for SME business leaders is that you don’t need to have a massive amount of data to drive your business, it is also possible to do it with smaller data sets. If you are not sure where you can get the data to work with, first think about the internal data sources of your business that you can use, like your CRM, your accounts system, your products stock data etc….
Over time (and that time lag is getting always more shorter) SMEs realise (sometimes way too late) that because they just did not analyse the data they literally had under their nose they are stuck using outdated business practices and hesitant to fully adopt the insights that data analysis can provide…..TO THEIR GRAVE PERIL.
At EMCS we specialise in understanding the situation of your business and understanding what data you presently have available and analyse it attainability and veracity. Then we can analyse to answer the most important questions facing your business, many times related to performance. This would lead us to advise you of what data is needed, how it needs to be analysed, how it needs to be presented and also what data analytics systems can be used to make this whole process easier. May I remind you that there are specific funds that can be tapped into under the CHANGE TO GROW scheme from Malta Enterprise to help you finance all this. EMCS is an approved advisor under this scheme.