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The next frontier Analytics and the future of mid-market enterprise
Beyond the veil
Mid-market companies have watched the analytics revolution with great interest and some uncertainty.
Some are daunted by the perceived complexity or expense of what they’ve seen. Others are keen, but challenged by the outdated, highly manual processes they currently use to collect and analyze business data – including seeing the opportunity as exclusively one of data and technology.
It’s time to pull back the revolution’s veil and take a closer look . . .
Where’s the beef?
Many mid-market companies hesitate to adopt analytics because they don’t see a clear value proposition. Some are wary of the hype, while others remain uncertain about how to make analytics work for them.
As a result, a sizeable number of mid-market Canadian companies have practically ignored the analytics opportunity in front of them.
But this is a mistake. Why?
Because the world has changed
Analytics isn’t just another cost. It’s the single most important investment companies can make today, one that can deliver real bottom-line benefits and lead to a business environment where everything is driven by genuine insight.
That’s why we call companies that do this Insight Driven Organizations (IDOs) – they not only leverage data and technology to great effect, they do so precisely because they ingrain fact-based decision making into the organization’s culture.
And it’s only becoming easier and more affordable to do. Whatever the nature and size of your business, analytics can deliver improvements wherever you apply them.
Think about it. You know you’re looking for . . .
Because the world has changed
Better customer insights
Companies have always tried to better understand their customers’ needs and behaviours and use that understanding to drive engagement and sales.
Analytics takes much of the guesswork out of the process by developing insights from the data companies already have.
You also know you want . . .
Enhanced growth
Analytics can enable mid-market companies to zero in on their growth drivers in finer detail than ever before. For example, you can now see how customer behaviours intersect with traditional demographics and location.
This allows companies to identify the most profitable customer segments—not to mention the least profitable—and use that knowledge to realign sales and marketing resources.
Analytics also promotes . . .
Smarter forecasting and risk management
Analytics can help mid-market companies develop more accurate forecasts, and model business scenarios and outcomes more quickly than before.
Analytics can also enhance companies’ ability to manage and monitor risk, including predicting and detecting potential fraud incidents or security breaches.
But we get it. A nagging question remains . . .
Where to begin? To be sure, the first step is always the hardest.
But wherever there’s good data, there’s the potential for game-changing business insights. Mid-market companies keen to gain those insights can begin with some careful thinking.
Start with the following . . .
Focus on the ‘crunchy’ questions Crunchy questions, are the really difficult questions you need to ask of your data in order to elicit what you require to build your analytics strategy.
When practical and detailed, they allow for clear and specific answers, which in turn allow for action.
What are your immediate strategic goals? What area(s) of the business are most in need of a boost? Pricing? Return on marketing investment? Risk management?
Analytics leads to solutions. Let your questions guide you.
Next . . .
Assemble an effective team Successful analytics endeavours depend on a mix of the so-called “blue” technical skills required to ‘do the math’ and the “red” business skills required to influence and manage change.
And though it isn’t always easy to find the “purple people”* who exemplify both skillsets, it can be done.
* Eckerson, Wayne. TDWI Blog. “’Purple People’: The Key to BI Success”. April 29, 2010. https://tdwi.org/Blogs/TDWI-Blog/2010/04/Purple-People.aspx. Accessed June 23, 2016.
Either way, teams can be outsourced, or built over time. What matters most is identifying an executive champion who can focus on the crunchy questions, striking the right balance of skills, and ensuring clear and consistent communication on progress.
Similarly, you’ll need . . .
Manageable, repeatable governance Processes that help clarify how you should act on the insights you generate with analytics can be elusive. Often, this is because they leave out key components.
To build ideal capacity, you need a governance framework that:
• Aligns your analytics priorities with your corporate vision • Allows central management of tools and processes • Shares successes and best practices across the company
Next . . .
Identify relevant data Many companies already have the data they need, they often just don’t know they have it, or what to do with it. And that’s usually because they have so much of it, they’re overwhelmed.
Go back to your crunchy questions and think about the kinds of data you’ll need to answer them.
Set the rest aside for now.
However, remember to . . .
Start small To be just enough on the safe side, pilot analytics in an area where expectations are modest but the potential opportunity is high. Failure often leads to abandonment, and that’s a mistake where analytics are concerned.
We advocate a proof of concept exercise that allows you to fail without breaking anything. You try it, measure the results and return on investment, and then decide where to go next.
Speaking of where to go . . .
Know exactly where that is Develop a plan that covers both the introduction and expansion of analytics use in the company, one that is also flexible enough to adapt to shifting market dynamics.
A measured, thoughtful approach will help you reap the rewards without the risks entailed in doing too much too soon.
Continuous improvement. Isn’t that . . .
The ultimate goal? To become an Insight-Driven Organization, all you need to do is supplement your hard-won experience and knowledge with data, insight, and reasoning in every decision you make – at every level of the organization.
With careful attention to strategy, people, and process – not to mention the data itself, and the technology you use – the result will be nothing less than a revolution in the culture and capability of your working environment.
Fact is, IDOs increase revenues, reduce costs, mitigate risk, and simply out-compete more often.
Not convinced?
Deloitte, one of Canada’s leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited.
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