How SMBs can harness Analytics as they scale

The current era powered by cloud, AI and automation is an ideal time for small and medium businesses (SMBs) to transform their priorities and become analytics driven SMBs. Many SMBs are not completely capable to take advantage of their data, and the ones that do are better positioned to grow and succeed.

Intuition-based vs analytics-based decision making

Historically, decision making among many business leaders has been based on gut feeling. This stems from multiple reasons, ranging from lack of data literacy and in-house expertise to limited investment into new technologies and legacy management systems. But, in today’s age there are higher expectations from decision makers to be able to explain or justify their business decisions. If significant improvements in various measures of performance like revenue, cost, risk, quality, service, and speed, are to be achieved, business decisions need to be re-engineered based on analytics.

Rising demand of analytics for SMBs

Large enterprises with substantial budgets employ data scientists to develop and maintain analytics operations and interpret data to take informed decisions. Whereas SMBs rely on instinct and experience while making decisions instead of investing in business analytics strategies. Big corporations have deep pockets and hire a big team of IT professionals to deal with their data and business analytics to aid their future growth. But, SMBs have lesser volumes of data and are mostly observing metrics which guide them run their business more efficiently. The complexities are of a smaller scale and need a different approach while analyzing their data and business.

Multiple SaaS companies offer affordable solutions to manage work and operations of SMBs. India has approximately 63 million SMBs from which around 20 million are officially registered, and these enterprises are the largest employers and the primary driver of the economy.

By 2030, India’s SaaS market will be around $50-70 billion. As the SaaS ecosystem penetrates SMBs, these industries will generate immense amounts of data and will need analytics to support their future growth.

How can SMBs approach analytics?

Many SMBs are open to exploring analytics but struggle with budgeting for it. This line of thinking makes it unaffordable. A monthly, low entry, affordable template monitoring KPIs is an ideal way to bridge this gap. Once the business begins to see value in this exercise, they know how to budget for it. SMBs can take up descriptive and diagnostic analytics and based on the learning further follow it up with predictive and prescriptive analytics as they grow. As analytics start providing insights, it develops confidence among the decision makers to apply data analysis to all verticals of their enterprise since they get evidence-based clarity on the functioning of their company. Over a period, a data-driven organization becomes more competitive, becomes resilient to external threats, and is better positioned to develop and achieve its strategic objectives.

Analytics encourages competent decision making

SMBs which appreciate and understand the value of technology and analytics will have an edge over their competitors and become future leaders in their fields. The foremost benefit that is obtained by using analytics is a clear line of sight on their business. It helps in taking crisper decisions, which leads to faster delivery of their products or services to the market, eventually reaping higher profits.

In an increasingly digitalized economy, an appropriate level of data maturity can generate greater actionable insights which, when used correctly, can help businesses become nimble and responsive.

Businesses which lack this maturity will be unable to make faster and smarter decisions. An enterprise which runs on intuition and raw experience will be outdone by one that uses analytics.