DATA-DRIVEN DECISION-MAKING FOR SMALL AND MEDIUM SIZED COMPANIES: AN OUTSOURCING OPPORTUNITY
Digital transformation much more than using the latest technologies
Digital transformation is a burning subject. Recently, Harvard Business Review published an interesting article on “Where digital Transformation goes wrong for small and medium-sized companies”. It starts by pointing out that most leaders do not understand digital transformation. With the aim of shedding some light on the situation, April Walker, GM Industry Innovation at Microsoft, presented this definition: “Digital transformation is not just ‘doing digital.’ Digital transformation is a deliberate, strategic repositioning of one’s business in today’s digital economy”.
In today’s economic environment, large corporations can increasingly customize their services, in literally any way their customers choose, while small and medium-sized companies have a lower investment capacity that puts their survival at risk.
This article also points out that most small and medium-sized companies invest in implementing digital tools with different functionalities such as CRM, ERP, HHRR, among others, but stop short of investing in AI or predictive analytics. However, although the different departments work hard to get the most out of the data generated by these technologies, a lot of time is wasted on getting answers to performance indicators (KPIs) that are fundamental for decision-making.
Based on the above, What are most small and midsize businesses leaving behind in their digital strategies ? Conway and Codkind, authors of the HBR article, give the answer: understanding that you need specialized business analytics expertise on your leadership team and that you need to change how your organization makes decisions.
Implementing a Data-Driven Decision-Making Culture with an outsourced data-management solution
According to an Oxford Economics survey(*) of a sample of 2,000 small and medium-sized companies from 19 different countries, of the total number of respondents, less than 40% said they had all the information needed to support decision making. This highlights the shortcomings of small and medium-sized companies in terms of data collection and analysis. As a result, 67% of those surveyed responded that this lack of information is giving large companies a competitive advantage due to sophisticated data analytics.
This is a disadvantageous scenario in which decision makers only have part of the information available to make their decisions. What can companies do to solve this? They should move forward and be able to analyze all the internal information they generate and the external information relevant to their business. They can do this with a data-management solution, which helps them to develop a data-driven strategy to meet the company’s objectives. However hiring a data specialist comes with a high cost and it is difficult to retain over time in a competitive IT market. And in case you can afford it, what happens if your data specialist leaves, or takes a holiday or calls in sick? Even when you’ve got your expert, It is impossible for one person to stay up to date at the high speed of the data insights universe. Think about it: thise new employee should build your own technology stack, processes and workflow from scratch, in a secure cloud environment. Not to mention deal with updates and compliance regulations that bombard us due to the rapid evolution of technology.
In short, there are too many subjects that this expert must be trained in and maybe even more important, the entire data strategy can not be put in the hands of one single person.
By outsourcing this service, you will not need to worry about this dependency relationship; you will receive data insights for decision making while staying focused on your core business.
A full stack data management solution manages the entire process, including automated data input and ETL processes, creation of “one version of the truth”, strict security, cloud management to data compliance. It also includes a powerful visualization tool that will allow you to review the analysis and predictions generated from your data. With these insights you will be able to enforce your organization’s decision making.
Once your solution is in place and different departments can have access to the information, it will be time to foster a culture of data-driven decision making across your SMB organization. Finally after setting measurable objectives and KPIs, you will review analytics and predictions to understand trends, check out opportunities and scenarios, strategize and achieve your objectives.