Data analysis: Benefits and challenges for small and medium businesses

In this time and age of information overload it’s important for businesses to remain abreast of market dynamics, understand consumer behavior, and take decisions accordingly. More information is available about user behavior than ever before, and businesses haven’t had an equally great opportunity to take informed decisions based on hard-core data. This is why the enormous amount of data available makes data analysis an indispensable tool for growing businesses.

Gone are the days when businesses were driven by entrepreneur intuition. Now, data drives the simplest to the most complex decisions. Data analysis not only helps companies understand upcoming consumer trends but also reduce risks through gaining verified business intelligence. Analysis of historical data sets helps businesses in budgeting and forecasting trends, making recruitment decisions, and optimizing resource utilization.

How important data analytics is for businesses today can be understood from former Microsoft COO Bob Herbold’s statement while he donated $2.6 million to launch a data science program at his alma mater, Case Western Reserve University in Cleveland. He mentioned that “The ability to evaluate and apply data has always been an integral part of an organization’s success. But the potential that exists today to enhance operations and outcomes is nearly limitless. Those who understand how data works and what it can yield will carry enormous advantage in the new economy.”

Furthermore, McKinsey estimates that the U.S. could save $300 billion on healthcare alone with more effective use of data. Similarly, there are limitless possibilities in every sector, and the savings could be enormous. However, in making the announcement, Case Western Reserve University also pointed out that the rapid increase of available data in the U.S. is leading to a shortage of up to 190,000 deep analytics workers and 1.5 million managers with data expertise.

The talent shortage faced in this sector might ultimately undermine the benefits that companies can potentially avail from analyzing their data. The problem is further aggravated for many small and medium businesses because of their inability to hire permanent data analytics experts.

However, there is some ray of hope. The new economy has redefined business principles. Outsourcing is out, and on-demand is in. On demand access to the best experts in business can help companies scale up or down quickly, thus providing flexibility when responding to changing customer demands. This is where platforms providing access to subject matter experts and data analysts can become a game changer.

I would like to invite comments from small and medium business owners elaborating how data analytics has helped them take informed decisions and develop business intelligence. Data analytics experts are also welcome to provide examples of scenarios where they’ve deployed data analytics to help counter intuition with data-linked decisions.