How can data analysis help small to medium-sized enterprises (SMEs)? Actually, many SME owners would tell you they are too busy running their enterprises and don't have much time for data analysis, which has typically been time-consuming and costly operation.
With advances in business software development, time consuming and costly need not be the case.
What SME owners do want however, is to learn how they can grow and improve their business.
Modern day analytics can provide extremely compelling insight that can help enterprises, especially SMEs, grow. Today, there are infinite opportunities for an SME to easily use data analysis to help them turn clients into loyal advocates, to boost average revenue sales and to run focused business strategies.
Today's data-driven world means that SMEs must keep up with corporate enterprises that have access to vast resources as well as like-sized competitors looking for ways to stay ahead in the battle for customer sales and loyalty.
The great news is that today, SMEs can take advantage of analytics like never before to improve their revenue and profit and establish a competitive edge while staying on top of evolving client demands.
Many SME owners think data analysis is too complicated or difficult to understand.
Whereas this perception has been true historically for most analytics offerings, things have changed dramatically for the better.
Today's business analytics are extremely easy-to-use and can quickly provide enterprises with meaningful and immediate insights.
For example, a supplier to the construction industry, through checking the business outcomes via their onboard accounting software annual reports, determined that,
though making a modest profit, the business should have been doing so much better.
Applying a data integration and analytics program to his accounting software, resulting reports showed Year To Date visual graphics and text results for:
Quotation success' and failures by customer, product, employee and referral source.
Revenue by customer, product, employee and referral source.
Profit by customer, product, employee and referral source.
Client Profit against Client Revenue.
(A surprising revelation came with this. The, previously revered, two highest revenue customers turned out to be low profit earners and were close to breakeven through panic discounting.)
Today's solutions are built to be sophisticated yet simple enough for any SME owner to use.This being evidenced with the construction supplier's program.
A program that consisted of a simple three button user screen that automatically downloaded the accounting reports and produced all reports in minutes.
What data analysis tools are available to small enterprises with limited time and budgets?
In the past, analytics solutions were designed specifically for large organisations that could afford customised data analysis programs.
So, accessibility by SMEs was not the norm.
That has changed significantly.
Today's technology can be utilized by SMEs conveniently and affordably.
Even for large data sets, many modern-day programs are available to SMEs and are, in the main, very user friendly, cost effective, and easy to install.
Research on programs such as, Billing and Invoicing, Enterprise Resource Programming, Customer Relationship Programming, Extract Transform Load, Data Integration, Project Management, Field Service, Help Desk & Ticketing, Email Marketing, would tell you what would suit your enterprise best.
For smaller, simpler needs the power of the programming language Visual Basic for Applications (VBA) should not be under estimated.
This is the language that drives sophisticated information automation of Microsoft's Office Packaged programs.
A package that, most likely, resides in your network already.
How can SMEs use data analysis to make the business more profitable?
Whereas business owners know their company better than anyone else, there are certain factors when it comes to consumer spending and customer behaviour, that a business decision maker may not be able to identify on his or her own.
This is where data analysis comes in - by helping SME owners better understand the needs of their customers and employees, they can influence customer behaviour and employee performance to act more strategically and profitably, and ultimately grow their enterprises.
By consistently using data analysis to make those decisions, SMEs can be more effective with the expenditures on operating costs and marketing, which then results in higher profitability.
By way of example:
The previously mentioned supplier to the construction industry, by refocussing on both the sales effort and employee management:
Raised many B class clients to higher revenue A class.
Spent less and, sometimes no effort, on C class clients resulting in better revenue and profits.
Identified and eradicated panic discounting with resulting profits increase.
Identified and worked on low profit products and services.
Setting realistic and rewardable expectations of employees resulted in improved employee engagement with zero staff turnover since.
Proven benefits of SME's embracing data analytics further proves the adage:
If You Measure It, You Can Improve It.
In the next article, we will advise how best to go about choosing business software.
In the meantime, feel free to book a free 30 minute discover session with Smoothstream.