How data and analytics can boost SME performance
“Insight not hindsight” should be the guiding force for decision-making among small and medium enterprises in a post pandemic world – according to a new RSM Australia report that highlights the value of data in a competitive market.
The report challenges the common notion among small and medium enterprises (SMEs) that data analytics is a tool for big business. Data has value for optimising operations, cutting costs, expanding the customer base, better serving existing clients and consequently boosting revenues.
Core business objectives aside, each of these outcomes has become a crucial ticket to SME survival in a pandemic-stricken economy – as noted by Srdjan Dragutinovic, a Melbourne-based data analytics director at RSM.
“Uncertainty about the future and anxiety around next steps are new realities for many SMEs. The question “what will happen next” is high on the agenda for virtually every business and needs to be addressed, quickly.” Analytics can add value here, although SMEs tend to shy away from it for several reasons.
“Some businesses don’t realise just how much quality data they have to help grow their business, whilst others have so much data they’re overwhelmed by it and don’t know where to start.” Instead, businesses use hindsight to speculatively inform their next steps, rather than using their data repositories to make concrete forecasts.
Strategy and culture
An insight-driven approach is crucial – built on two fundamental principles of strategy and culture. Strategy comes into play when selecting the type of data to gather and analyse. Sifting through all enterprise data is wasteful and time-consuming. SMEs should define a clear set of problems that they hope to solve, and collect only relevant data.
At the same time, the most relevant of data – accurately analysed – comes to no avail if the business lacks a data-minded culture that “that values and seeks out data driven insight, to help identify and prioritise strategic initiatives and new opportunities,“ according to Dragutinovic.
And much like most behavioural practices, a data-driven culture is better inspired than instructed. “Culture change starts at the top. Business owners and managers should lead by example and set expectations that employees will focus on data-led insights in decision-making.” The rest can be managed through a combination of training and technology.
Combining these strategies can help SMEs lay a concrete foundation for their future. No doubt, hindsight is a key tool to have in the armory. But the experts recommend an approach of “understanding the past, and predicting the future.”
