Small and midsize businesses live in the world of Excel.
And why not? Spreadsheets are easy to use, inexpensive, and easily available – making them the preferred analytical tool for many. But spreadsheets come with their own challenges. Designed for individual users for simple calculations and projections, they can pose a real risk to the organization when used for complex, collaborative planning and analyses.
The problem is that many companies don’t recognize those transitional moments when they become too big for spreadsheets and other simplistic analytical tools. Result: they get mired in complexity, inconsistency and just overall poor and delayed decision-making.
To avoid getting caught, watch for following signs that indicate you are ready for analytics:
When you have too much data. Everyone is talking about “big data.” And rightly so. More data is being generated today than ever before in the history of mankind. But it is not about petabytes or exabytes. You have a problem when you can’t derive insights from all the data you are collecting fast enough to support timely decision making. Customer data can be your window into your customers’ likes, dislikes, behaviors and attitudes. If you can’t use it to build customer intimacy, to improve return from your marketing spend, or to leapfrog competition, why even collect the data?
When you feel no longer in tune with your customers. Customers today expect you to deliver personally relevant product and service information via their preferred channels, when they are ready to buy. Failure to meet their demands can frustrate them or turn them away. Conversely, if you can personalize promotions like Gilt Groupe, an online fashion retailer did, you can convert uncounted browsing members to paying customers. Luke warm response to promotions or less than expected campaign response rate may be a sign of not connecting with your customers. Assess if you know your customers well. Ask if your products, services, message are aligned with your customers’ preferences, needs, wants and interests? If not, it is time to consider investing in more robust analytics.
When regulatory compliance becomes a resource drain. The legislative environment is becoming increasingly complex, irrespective of the industry or market you play in. Federal and state governments keep issuing new regulations and standards, and compliance reporting requirements are becoming all-consuming. Ask Nancy Huntoon, Bank Secrecy Act (BSA) Compliance Officer at Northwest Federal Credit Union. When she saw her limited IT resources spending week after week manually scanning hundreds of thousands of rows of data for fraudulent activity, she knew it was time to invest in an alternative solution. Analytically robust solutions can help ensure data integrity and maintain complete audit trails so you can sleep at night.
The size of your company should not be a reason to not invest in real analytics, so don’t lull yourself into a false sense of complacence. Winning companies like TrueCar and aren’t letting their size impede them. They are focusing on ensuring that their information needs are being met.