Businesses are in constant need to continuously improve their operations with an aim to achieve efficiencies and be better equipped for future events. To achieve this aim, it is important to not only capture operational and other functional data but to also analyze and infer meaningful business insights
from the trends they present.
The field of business analytics has thus come to be the savior for any organization’s growth, more so for startups. Limited by funds and under pressure to demonstrate growth and sustainability, startups are in greater need of using the right data and inferences to guide their goals.
The benefits of business analytics cut across several functional areas of the startup organization, including
- Strategic management
- Operational performance
- Financial performance
- Marketing and customer relationship management
- Qualitative and quantitative forecasting
- Human resources management
Amongst the many benefits of business analytics for startups are
- Ability to set more meaningful and realistic goals
- Improved productivity and efficiency
- Enhanced decision making from the availability of important real-time operational and financial parameters
- Identifying potential areas of uncertainty or conflict
- Awareness about customer demands and consumption patterns
- Customized marketing and promotions
Leveraging the Power of Data to Predict the Future
An important area of application of business analytics for startups is predictive analytics, which uses the power of past data to predict future trends. Because it is based on data and not notions, the insights delivered about the business are far more accurate and reliable.
In a business landscape already laden with uncertainty, predictive analytics helps those businesses with lean resources and limited leeway, especially startups, to position themselves better to serve the demand from customers in the following ways:
- Evaluate leads effectively
- Identify current sales trends
- Provide instant and on-demand customized service effortlessly
- Estimate the demand for products and services with greater certainty
- Improve inventory management and contain costs
- Expedite stock replenishment and avoid production delays
The benefits of business analytics can be derived from not only quantitative data but also qualitative data, as not always can numbers tell a complete story. The common business areas that can benefit from the subjective and inducive deductions of quantitative analytics include
- Product feedback and customer satisfaction
- Determining purchase decision parameters
- Idea testing
- Choosing suppliers
- Conducting targeted marketing
- Web analytics
Hurdles in Employing Analytics
Despite the benefits of business analytics, a startup might face significant hurdles and challenges in implementing a robust analytics system and derive value out of it. The core constraints facing startups in the use of data and analytics are as follows:
- Data Constraints: Startup businesses have low existing data volume, velocity and variety, which could impair their ability to derive significant inferences.
- Resource Incompetence: Startups might not have the financial ability to deploy competent teams with the advanced knowhow to implement appropriate business analytics systems.
- Financial Investments and Infrastructure: Financial investment for deploying business analytics systems is higher initially in hardware for production, manufacturing, database and storage, servers and processing, and associated cloud services and logistics. Not all startups, especially bootstrapped ones, will be able to afford the outlay.
- Time Constraints: Startups are forced to release their products quickly in uncertain and high-risk environments. Hence, they might not have the time to wait until the business analytics systems yield the first set of insights.
- Security and Privacy Issues: Storing and maintaining sensitive customer and usage data without privacy violation for the purpose of business analytics could be a challenge for many startups.
The primary goal of a successful startup is to create a sustainable vehicle for growth. Business analytics tools help them save time and make smarter choices in view of this goal. By leveraging data, which is the most powerful currency in today’s time, startups can immensely benefit from improved ability to take advantage of growth opportunities and achieve competitive differentiation with the help of business analytics systems.