Data-driven decision making is no longer just for Big Businesses. Fortune 500 companies have invested millions in defining, organizing, integrating and disseminating their enterprise data to gain competitive advantage in their businesses. These companies have had the resources to invest in Data Analytics and have been reaping the benefits for years. Now these larger companies are moving on to the next phases of Data Analysis, Predictive Analytics, Data Science, AI and Machine Learning. However, many Midsized Enterprises (MSE) are far behind where these larger companies are when it comes to leveraging their data as a strategic asset. Most are still struggling with the basics of data integration and analytics. MSEs should not feel totally alone however, as even large organizations are challenged by these Data Analytics Initiatives. In fact, Dun & Bradstreet/Forbes conducted a study that reported while data analytics has gone mainstream, the C-suite and senior leadership need to do more to drive the cultural change integral for better utilization of analytics – 38% of those surveyed say their companies need to do more.
Why are Midmarket Organizations Dragging Their Feet?
There is an inclination towards hesitancy when it comes to data integration, reporting and analytics for many midsized businesses. This stems from many issues, but in the MSE world, the primarily culprits are:
- Lack of understanding what options are available for the business.
- Lack of appropriately skilled resources.
- Fear that sophisticated Data Platforms and Analytics will be too expensive.
Mid-tier companies are operating lean and mean. Many have very small IT departments with employees wearing multiple hats to make the business operate. They often lack the knowledge, experience and time to give data analytics its due focus. These issues have resulted in 77% of smaller businesses not having a data strategy. It’s a big mistake. The use of data analysis solutions means that a company can make informed decisions about products, services, marketing and more. It can give a business a competitive edge and seriously impact the bottom line.
What are the Options for a Midsized Company?
Today with the advent of the cloud, platforms and analytics tools, the customers’ options are very flexible. Customers can choose to outsource the entire process from data ingestion, integration, visualization and even advanced analysis of the data through data science services. MSEs can tailor the data services they require and fill in expertise they may have in-house. Today, with an Analytics as a Service (AaaS), customers enjoy the option of having sophisticated analytics solutions without tremendous cost. AaaS providers can ingest, cleanse and integrate your data and make it available in sleek, useful visualization tools, all at a reasonable monthly cost — typically, less than the yearly cost of one full-time IT resource.
What’s the Business Value?
The business value can be tremendous — providing insights into sales and marketing effectiveness, operational efficiencies and financial performance. Companies are answering questions such as: What is our most profitable customer profile? What products drive the most revenue and margin? What are my operational pitfalls … where do we need to focus? Integrated enterprise data at your fingertips can be a game changer for any business, therefore MSEs should consider putting together a roadmap for investing in analytics.
Many companies have complex, inefficient and error prone ways of cobbling information together. Each department ends up with part time or full-time employees dedicated to gathering, cleansing and integrating data into reports and dashboards. These inefficiencies ooze into the organization over time out of necessity, and the overall cost and loss in productivity is typically not measured or managed. Think of the productivity given back to your organization if 3-5 FTEs could focus full time on value added initiatives.
Case Study: An Aftermarket Auto Auction Company
This client had grown by acquisition and now had to integrate and report financials on 15 different acquired businesses. Their small business wasn’t so small any longer. Financial reporting was done by a monster Excel sheet that took 30 minutes to open. Not only that, but the manual way in which sales commissions were calculated resulted in erroneous over payment of sales reps for auto auction sales. After they outsourced analytics, all the data sources were ingested to a cloud platform, an enterprise model was formulated and built, and visualization tools were leveraged to eliminate the massive spreadsheets along with manual and error prone efforts. While a digital transformation initiative is in their future to re-platform and tightly integrate all their acquired companies, by outsourcing their analytics they now have sophisticated analytics capabilities, data integration and process improvement.
Is Outsourcing Analytics Right for your Organization?
The right level of analytics outsourcing depends on your organizations needs and current capabilities. There are hybrid options that allow an organization to leverage certain in-house skill sets effectively without asking them to stretch far outside their level of knowledge and expertise. Given the options in the market today, for most MSEs that lack the knowledge, analytics skills, and resources, the answer is an emphatic “YES” – you should consider outsourcing your analytics.
Messina Group works with organizations that are seeing significant competitive advantages as a result of their data and analytics initiatives. Their experiences, practices and results provide a roadmap for other organizations to consider on their own analytics journeys.