Complex data insights are more crucial than ever in uncertain economic times, yet small firms typically lack access to the same degree of analytics that are common in enterprises.
This reality is undoubtedly reasonable given small firms’ limited financial resources, the fact that they frequently lag behind in digital transformation, and the business intelligence (BI) software niche’s predilection for bigger contracts. But small businesses require BI to support resilience and growth at least as much as these larger companies do, and given the current state of the economy, they require BI now more than ever.
After all, many had anticipated that once the COVID-19 danger subsided, the global economy would strengthen once more. However, contrary, many economies are experiencing fast inflation, and the likelihood of a global recession is strong.
The health of this sector is crucial to the economy overall since, according to the United States Tiny Business Administration, more than 99% of the nation’s firms are small, employing more than 46% of the workforce.
Why are small businesses unable to obtain data insights?
There is no singular response to this query. Small organizations frequently lack the funding necessary to establish a specialized data science (DS) team and cannot afford to hire temporary consultants, which is a problem. There are just a few team members in microbusinesses, and because they are required to make difficult decisions when it comes to priorities, nobody has the time to learn new specialized skills.
A common theme among small company professionals is the tension between working “on your business” and “working in your business.”
Although small businesses have made significant progress in their digital transformation journeys, many in the industry still believe that entirely digital business operations are a long way off. Data can be dispersed extensively, even in microbusinesses and solopreneurs.
It takes time and can quickly become difficult to gather data all in one place and structure it so that analytics tools can access it. But the truth is that one of the best justifications for pursuing digital transformation is placing small firms in a position to learn from their data.
The fact that most data management systems are designed for larger enterprises is another issue. When used by small enterprises, they are either ineffective or excessively expensive , and occasionally both. According to McKinsey, 56% of respondents said that going digital is too expensive for small organizations. Digital solutions are frequently created for large enterprises and are challenging to downscale for small businesses.
Microbusinesses are frequently left out of BI tool marketing campaigns, as are even bigger small businesses. In fact, the mindset of small businesses is so distinct from that of larger corporations that even when BI software companies attempt to target micropreneurs, the messaging simply doesn’t connect – the difficulty of “getting things done” is entirely different across these sectors, and the data measurement issues are consequently divergent.
Many small firms only made the switch to digital transformations as a survival strategy after the Covid attack. The data-driven cultures and data literacy abilities required to execute BI may not exist within these teams. In reaction to the pandemic, 33% of small businesses started providing virtual services for the first time, and even now, 27% still don’t even have a website. It takes time for businesses to fully adopt digital operations.
BI increases the resiliency of small enterprises
But both corporations and small businesses require BI. Additionally, they typically have less market influence, a smaller financial buffer, and a worse ability to weather a slowdown. They are consequently more susceptible to shifting economic conditions. On the plus side, they are typically more adaptable than huge organizations and can shift direction more quickly to take advantage of changes, but only when they have accurate visibility into their company’s performance.
Due to the high degree of unpredictability and geopolitical unrest affecting the economy today, company owners must pay more attention to the smaller data trends affecting their own companies at this time. They want simple methods for comparing monthly sales data, certain service offers that unexpectedly become popular, and the staff individuals who are providing the greatest value to customers.
Imagine that the proprietor of your neighbourhood fitness centre could quickly assess the popularity of various fitness programmes or evaluate their predicted revenue with a few clicks. Now consider how this studio owner may enhance their financial planning and concentrate more on the offerings that are bringing in the most money.
According to a recent academic study, having access to big data analytics is a crucial factor in small enterprises’ operational resilience. Better knowledge-sharing, data integration, and analysis are made possible by BI, which also speeds up learning in the corporate world and encourages innovation by boosting internal business collaboration.
The authors wrote, “BDA capability aids in sharing knowledge, particularly through data integration and data analysis, to boost the innovation response and optimise corporate processes to attain dynamic capabilities.
It also aids in identifying chances for optimization when communication between staff, clients, and small business owners is more flexible. Small business managers can find savings, compare expenditure and performance, identify areas to reduce spending while increasing ROI, and generally make better data-driven decisions by gaining visibility into the metrics that are important to the company.
Fostering the growth of small businesses
With the aid of business intelligence (BI), small firms can monitor leading indicators to make knowledgeable decisions based on new patterns in income sources, lead generation channels, and client retention rates, enabling them to recognise opportunities and exploit them. They require BI insights to constantly monitor their bottom line, find new sources of income, and focus on the appropriate purchasing drivers to increase sales.
Small business owners need BI to hunt for the areas of their company that are generating the most growth because these areas may get lost in the hustle and bustle of daily operations. Leaders can increase their investment where it will increase revenue once these growth levers have been discovered.
Additionally, with BI, they can make wise choices that better allocate resources, such as enhancing lead nurturing processes to highlight the products and services that foster customer loyalty or investing in more advanced technology to monitor sales. Many users, being able to access this information has allowed them to take a break from the daily grind and keep an overall perspective of their business.
Finally, small business owners require BI to comprehend the thoughts and needs of their clients. They require BI, for instance, so that they can identify themes in client complaints to determine what is lacking, then pinpoint crucial elements of services that will improve performance.
With BI, they are able to provide more individualized customer service, marketing, and support to increase retention.
