Small & Medium Businesses: Kick starting the analytics journey

Small & Medium Business Enterprises (SMBs) are typically characterized by having less than 500 employees. Forbes publishes an impressive list of these ‘small giants’, who showcase the best in American entrepreneurial spirit.

COVID-19 has disrupted the SMB sector and as the US begins to reopen, the US Chamber of commerce playbook recommends analyzing your sales data, customer behavior and ROI in order to understand what’s working and what you may need to adjust.

In many cases, the pre COVID-19 business model no longer works and a new value proposition needs to be evolved. Kickstarting analytics may be a competitive advantage for small enterprises -including non-profits, as the economy recovers.

In order to adopt and jump start analytics, here are a few key factors that need to be considered:

Starting Your Analytics Journey

Analytics is not about cool graphs and software. It is the ability to answer key business questions that leaders have — using data. The key questions can be from areas of specific opportunities or potential threats.

Analytics can be used in any area of business — to improve market penetration, standardize pricing, optimize employee commissions, reduce the cost of goods and services or even improve machine productivity. Metrics need to be Specific, Measurable, Attainable, Relevant, and Time-Bound, meaningful to relevant audiences and simple to communicate.

Most importantly, you need to identify business metrics that can be built and refreshed off existing business data in inexpensive repeatable ways and with speed.

Data Collection & Interpretation

It was predicted by Intuit over 5 years ago that 80% of US small businesses will adopt the cloud by 2020, on the back of apps that improve productivity and help small businesses focus on their customers. A 2019 estimate shows that 78% of small businesses will fully adopt cloud computing by the end of 2020

Most of the established SaaS vendors acquire and store different aspects of their customers data- general ledger, accounting, CRM, online and transactions data expose REST API’s to download their client data for use in analytics. This can be a valuable source of small business performance information.

SaaS solutions tend to expose reports specific to their own apps. However with data across multiple SaaS solutions for sales, marketing, project management, human resources, invoicing, revenue and the ubiquitous excel spreadsheets it is hard to put a singular view of the business together. Combining data from different sources can answer questions that touch upon multiple operational areas such as “how does each of the projects contribute to my revenue, broken down by plan?” or “What prospect turn over rate do I need to maintain to achieve an aspirational target?”

Additionally,business specific data can be supplemented with open source data from the US census bureau, US Government Open Data, local governments and the Small Business Administration.

The key challenge in all this is to be able to interpret the data, ensure consistency, and merge data in a meaningful manner to provide insights. Usually REST API’s are used to connect and download the data, but oftentimes these require considerable triaging and technical capability to be able to do this easily.

Cloud Analytics & Automation

You can do some pretty nifty analytics inside the most recent versions of excel spreadsheets, so why do we need a new dedicated analytics stack? Cloud BI and Analytics platforms help you connect to various data sources with little or no custom coding making the adoption easier.

There are a good number of cloud Bi/ analytics applications that have robust free tier plans reducing any need for large financial commitments. While automating may need some technical support for configuration, as long as connection and data properties don’t change.

Setting up an automated data refresh and publication of analytics in a Bi/ Analytics platform is a multistage process; clean, standardize, analyze and then set up for ongoing business use.

Let’s talk challenges

The critical challenges with the small business sector’s ability to adopt analytics are as follows:

Inability to see immediate value from their investment
Cost of setup and implementation
Constraints on time, money, and owner bandwidth

At the end there are several dots to joined to understand whether and how this would all make sense:

Are the chosen metrics correct?
What data can we use for the metrics?
How do we get this data? Do the metrics need modification?
Does sample data look good?
The level of effort required for the integration?
What’s the cheapest way to build it?
How quickly should we see the analytics and insights?

The easiest way to test out the possibility is to do an opportunity identification (OpId) exercise based on a business owner ‘tweet’- a single sentence on the business value they seek to be created.

We at Chisel Analytics have seasoned practitioners and access to industry professionals who can do an inexpensive OpId to quickly provide a point of arrival model for a small business analytics delivery model.

Please visit us today to learn more about how we can help you with your journey.