Increasing numbers of businesses across industries use data analytics to make important business decisions. Data can help businesses gather insights on various aspects of the business. This includes products or services, finance, supply chain, marketing, user behavior, and more. It can help them make informed decisions that bring in positive results. A data-driven approach gives businesses an edge over their competitors. Yet many businesses fail to use analytics to its maximum potential. They are unable to derive any value from it.
Harvard Business Review Analytic Services conducted a survey on different organizations across industries. They found out that only 18% of business leaders got an adequate return on investment in analytics. This shows that businesses are unable to generate positive results using analytics. Companies face many challenges when it comes to leveraging analytics. In this article, we will discuss the hurdles that are affecting the performance of analytics for many businesses. Also, some best practices that can help solve these issues.
Let’s take a look at all the reasons why companies fail to use analytics effectively.
The survey revealed that few companies described themselves as being “data-driven”. Only 27 % agreed on using analytics in making strategic decisions. There was only one group (18%) who said that they gained a return on investment from analytics. They reported on getting value by using analytics to help them refine their strategies and increase revenue. There were justifiable reasons why analytics worked for them, as compared to those businesses who were dissatisfied with their analytics results. These businesses used analytics pervasively and consistently in their organizations. The analytics experts worked closely with other teams in the company. Also, they used insights from analytics to make business decisions rather than relying on intuition.
Looking at the statistics above, you can determine that many businesses have tools for analytics, yet they do not use it efficiently in their business strategies. Sometimes, due to the communication gaps between teams, analytical insights might not reach key decision-makers. They might end up making decisions without knowing valuable insights.
Here are some best practices that can help businesses use analytics effectively.
Using analytics in decision-making
Many businesses fail to use analytics effectively due to lack of a standardized analytics process. If you do not incorporate analytics as part of the decision-making process, then the results may not reach the key decision-makers. Hence, your analytical insights might not influence the strategy. You can use tools or platforms to set up a standardized analytics workflow that can help the analytics team communicate results to the decision-makers. This can help teams throughout your organization to be updated and use data to their advantage. Establishing a standardized analytics process can encourage the use of analytics to make informed decision rather than relying on intuition.
Using analytics throughout the organization
Analytics should be used pervasively across all teams in your organization. This is especially important if your organization’s size is big. If different teams use different methodologies to find solutions, it will be difficult for the decision-makers to determine which solution would be appropriate to solve a problem. You can avoid this disintegrated approach, by using a standardized analytics process. All the teams must be on the same page and leverage analytics to find answers or make decisions. They must first approach data when trying to solve any problem.
Organizations should build their culture around analytics and be committed to data-driven decision making. Analytics needs to be used throughout all the core functions of the organization. Integrate it with the workflows which will encourage workers to use it daily.
Collaboration between teams
Data must be available to all the teams in the company. Each team must have access to real-time data that can provide insights they need to make informed decisions. Teams should collaborate with each other by being able to share data if another team needs it. This can help teams leverage data from different departments whenever they require it.
The survey also reported that in some organizations both the analyst team and business team were not able to determine their needs for analytics. In this situation, both the teams should help each other with their individual expertise to come up with answers.
User-friendly analytical tools
Many businesses might not have a separate analytics expert team. Small businesses have limited budgets and might require their team members, who are not analytics experts, to generate analytics reports. Sometimes, even though a company has its team of analytics experts, other teams might want to look at the data themselves. Hence, you need to make use of tools and platforms that are user friendly so that anyone can have access to them and be able to use them without difficulty. Simple interface can make data analytics less intimidating, encouraging them to use it often.
One of the problems organizations faced was a lack of adequate technical talent. In this case, companies could hire expert analysts if they have the budget for it or train their own staff. Organizations can help their workers develop strong analytical skills so that they are able to use analytics effectively.
If your business faces any of the challenges discussed above, you can use these practices to make the best out of your analytics results. To get the return on investment from analytics, you need to make sure that it is incorporated as part of your decision-making process. The companies that followed these methods were able to get positive results using analytics. Adopting these measures for your business can help you make data-driven decisions and successfully implement them for your growth.
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