A New Study Shows That SMBs Lack ROI on Data Analytics
For any small business, seeing an adequate return on investment is integral to success, particularly when it comes to managing costs. Any money going out must be bringing something beneficial in, whether it leads to a small boost in profits, influx of new customers, more efficient work operations, or something similar. Anything short of a boon is just waste, and waste must be eliminated as much as possible.
That’s precisely where business intelligence, or data analytics instead, comes into play. By assessing trends and opportunities, small businesses are better suited to making the right decision, substantially boosting success through learned and predictive models. That is if the data analytics solutions are genuinely offering a return.
What if you were to learn that your business analytics are not up to par? You’re probably not getting the return you should be from your analytics investments. That could well be the case, according to a recent study from Onepath.
SMBs Are Not Getting a Return on Analytics Investments
The report shows that despite 67% of small businesses spending $10,000 or more annually on analytics software and people, along with 75% spending at least 132 hours annually on analytics-related maintenance tasks, a whopping 86% of leaders say they could be using them better.
In other words, while undoubtedly helpful, the analytics solutions are not being used to their full potential. More than 50% of those same leaders agree that the loss of analytics would result in slower production times, customer service delays and poor business decisions. So, the value is there, and it’s just a matter of pushing the tools beyond current limits.
It’s not one form of analytics or technology that poses the problem. Data analytics opportunities include machine learning and AI, management, mining and predictive analytics, which calls for building predictive models using existing datasets. SMBs can take advantage of all these forms of analytics, and more, and new tools are making the technology more accessible than ever.
So, why are SMBs missing out in terms of value? What is it that SMBs lack, which larger organizations have? The answer is resources, unsurprisingly. Onepath notes in the report that smaller operations don’t have the in-house resources needed to realize analytics solutions better, especially when compared to larger organizations.
It’s not just about the initial investment or continued monetary requirements of analytics, but also a lack of talent and experience in the people working with the technologies.
What Can SMBs Do to Improve Analytics?
It’s essential to make the distinction between a lack of staff and a lack of talent. Most SMBs have the appropriate team size available to make analytics solutions work, but that value could be driven even further through ample training.
Around 57% of SMBs did say they lack people to help manage the analytics program(s), but 62% of respondents said they could do a suitable job with the right training and support. In most cases, people are there. It’s just a matter of helping them grow their understanding and skills.
Although, the report also shows that despite a lack of training, SMBs have not slowed investments in the technology. SMEs with up to 100 employees are nearly three times more likely to adopt business intelligence solutions than larger enterprises. The desire and push to invest are there, regardless. Perhaps if the same resources were allocated to furthering the education and training of existing personnel, the returns would be more significant?
Instead of focusing on newer technologies that come down the pipeline, smaller operations should be focused on honing the skills and experience of existing teams. That means enlisting help with training, and in some cases, even bringing on partners that have a better grasp on the technology and tools. It doesn’t necessarily mean the support needs to be permanent either, but at least until the local teams become more familiar and skilled with the software.
There’s no shortage of data solutions and opportunities for small businesses, which makes specializing in a particular tool or software challenging. That might also be the reason why SMBs are losing out on value, as they’re trying to balance already thin resources between multiple opportunities.
Outside of hiring a third-party to handle the analytics side of the business — which is a valid option — proper investment in training is vital to success. It’s time for SMBs to acknowledge their shortcomings and appropriately address them. Whether that includes hiring new and more experienced talent, or training existing teams, that’s up to the business leaders in question.