Saturday, 14 July 2012
Business Analysis Tools for SMBs
Benefits of business analysis tools to SMBs
Here’s re-publishing one of my interviews published on www.techtarget.in
If business intelligence (BI) is an analogy of eyesight, then business analysis tools are binoculars that enhance the vision. However, these business analysis tools are no more a privilege of large business houses with complex BI systems alone. The analytics game is changing with many new business analysis tools surging to fit various business needs.
Significantly, the misconception that small businesses cannot undertake analytics has been cleared now. Any company with a lot of customer touch-point data will need business analysis tools. Essentially, if data is abundant and a company wants to know what to do with it, it perhaps needs analytics irrespective of its size.
Differences in approach
Generally, the main difference between SMBs and large companies is that the basic concept setting is already achieved in large organizations. Moreover, small companies usually have to get the concept of analytics into place and know what they plan to achieve from it. SMBs view business analysis tools as predictive analytics; as tools and techniques to determine the next step of a campaign. Their focus is usually on employing analytics for transactional purposes and getting insights into customer data. On the other hand, the large organizations play the field and try different methods to apply analytics to their businesses. As a thumb rule, SMBs can probably make small investments in analytics as they may not view it as crucial or operational. Also, resource spending to get people on board to work with the tool would be a factor.
Pitching business analysis tools
Picture this: if you are a CIO of a mid-market firm who wants to use business analysis tools, the first question that stumps you would be as to how to convince the management and get adequate funds for the project. In this regard, here are a few things that you adopt to clear the issue:
1. Near-term returns: Display benefits to the business in the near future. SMBs cannot make large investments and wait for 3-4 years to attain a RoI.
2. Demonstrate the concept at work: Undertaking a proof of concept to have tangible results to show the management that this is what the product can do for us.
3. Address pain points: Start by identifying crucial problems that the business analysis tool will be applied to and how this will resolve them.
4. Start with ad hoc analytics projects: These will speak for themselves. For example, customer satisfaction, which would involve gauging customer satisfaction and analytics would be applied to find out what specific reasons are leading to reduced satisfaction and then take measures to rectify this accordingly.
First, any BI initiative, including business analysis tools, starts with organizing and evaluating the data. Second, for the analytics to be successful, a dedicated data warehouse project is needed. This will, ideally, lay the foundation for information management in the company. While using this transactional data, SMBs will also have to start building best practices. They can use business analysis tools to view information in a quick and specific manner that will drive decisions and guide action plans. Once the data is managed and what the data looks like is known, then SMBs can dabble in BI and use specific BI products that suit their particular need.
Similarly, BI can help SMBs to realize what the past and present looks like while the business analysis tools will help them define the future. Most organizations, including the SMBs, will consider BI a necessity very soon. Analysis tools will evolve to address the vertical-specific needs of businesses. Also, small businesses will get to use tried-and-tested methods as tools evolve. Besides, big companies will make large investments in the field, constantly pushing the envelope.
Ideally, the first option for SMBs could be to use an open source tool. The SMBs need not undertake products from large vendors such as IBM or Microsoft. Many players have cost-effective business analysis tools offerings. However, when using open source, the SMBs may need to work closely with some implementation partner(s) if they lack strong IT teams to run large reports. Tools like Piwik, which deal with a lot of open source analytics, would be a good bet.
The analysis tools project, essentially, has to start with the way a small business looks at its data. There has to be executive buy-in. A key stake holder needs to be a senior business executive who understands how data can affect business. This will help the IT team to be constantly aware of what the business wants and work accordingly.
Perhaps, an important challenge that a small business may face here would be to find a dedicated project manager. While SMBs cannot outsource the project to the vendor and expect to have perfect data for their analytics program in place, the vendor can only guide in terms of the technicalities. The company needs to demarcate areas of responsibilities and define project ownership.
In a scenario where a company’s IT team is small, it’s usually the case that the team gets overwhelmed by the amount of data to be tackled for analytics. Moreover, large vendors create a hype about analytics that makes the SMBs weary even before the projects start. Ideally, the best approach can be to start small and have specific KRAs for the project.
In industries such as retail and BFSI, the SMBs are fairly mature to use business analysis tools. It is so because the large companies in these industries have taken to analytics as an extension of their BI systems. Consequently, modern large format retailers use business analysis tools for loyalty programs and BFSI companies to curtail frauds and defaults.
Furthermore, a must for SMBs while they embark on their analytics journey is to research case studies and success stories. Moreover, small companies can learn from the mistakes committed by the large ones; the case of business analysis tools is no different!