Small businesses often face limited resources and tight budgets, which can make it challenging to invest in business intelligence tools and practices. However, making data-driven decisions is essential for the growth and success of any business, regardless of its size. I’ve talked in previous articles about the importance of aligning business strategy with data strategy, and this remains a fundamental truth, no matter the size of the business.
In my experience, the basics of business intelligence principles and strategies remain the same for small businesses as for large enterprises, and getting these core principles in place will ensure that the organisation’s data and information universe can scale as the business itself grows.
Our own business is reaching its 16th birthday, and in the early days, when it was still a small business, even for a company whose key offering was data and information solutions, we fell into the trap of not focusing enough on our own internal business intelligence because we were too busy advising our customers on how to make the best use of their data. Very much like the story about the barber with a terrible haircut who had a reputation for giving the best haircuts in town! Once we found the space to focus on our own haircut, we found we had the ability to hone in on problem areas and opportunities, realise great efficiencies, and set and manage our business on a path to growth and expansion.
In this article, I take a look at 5 tips and strategies that small businesses can use to implement BI practices and make data driven decisions, based on my own experience of growing a small business, as well as learnings from customers.
1. Collect the data
It goes without saying that the foundation of any business intelligence implementation is data. Collect any and all data that is available. Some of this is fairly self-explanatory – for example, all businesses have records of sales, so sales records are obvious candidates for data collection. The true value of business intelligence is realised however when we cross reference these obvious pieces of data with additional information that may not currently be stored and collected – for example price surveys, weather patterns, salespeople, customer feedback, website analytics, competitor performance and social media metrics to name a few. Think about the additional data (internal and external) that may be of value to your business operations, your products and services, and put steps in place to collect and store this data.
2. Identify key metrics and measures for the business
When we do data strategy engagements with larger clients, one of the most challenging elements to pin down is identifying and agreeing on how we will measure performance and achievement of business objectives. Often with larger businesses, different departments work in silos, meaning that performance metrics are not always aligned across the overall business. Smaller businesses have the advantage of having more visibility across departments, making it easier to spot the threads, and therefore a set of key KPIs that speak to each other across the entire business. Often, simply the process of identifying these KPIs leads to process adjustments and efficiencies. This type of visibility can help different departments to speak the same language, and understand the up and downstream effects of their process and data outputs.
3. Take advantage of Cloud-based solutions
Cloud-based business intelligence solutions are becoming the norm for enterprises of all sizes. This is great news for small businesses for the following reasons:
- Cost Savings: Cloud solutions eliminate the need for expensive hardware and software, meaning that small businesses can access the same level of business intelligence tools as larger organisations without the significant upfront investment.
- Scalability: Solutions can easily scale up or down, meaning that small businesses only pay for the amount of resources they need at a given point in time. They can therefore quickly adapt to changing business requirements without having to invest in additional hardware or software.
- Accessibility: Solutions can be accessed from anywhere with an internet connection, which is particularly beneficial for small businesses with remote teams who work from home. Teams therefore have the ability to collaborate and access data in real-time from anywhere, increasing productivity and efficiency.
- Data Security: Cloud business intelligence solutions offer high levels of data security, including data encryption and regular back-ups.
- Quick Implementation: Solutions are easy to implement and can be up and running quickly, with minimal IT support, meaning that small businesses can start deriving benefits straight away, without having to invest significant time and resources in deployment.
4. Build a data culture from the start
Often, in larger businesses, I find that establishing and maintaining a data culture is a lot more challenging, as it requires individuals, departments and in fact the entire organisation, to unlearn certain behaviours and learn new ones.
Building a data culture in a smaller business is a lot easier for the following reasons:
- Agility: small businesses are more agile and can easily adapt to new technologies and processes. This means that they can quickly integrate data into their decision-making processes and make changes to their business practices based on data insights.
- Fewer layers of management: Small businesses typically have fewer layers of management than large organisations, which means that there are fewer people to convince about the benefits of data-driven decision making, and a lot easier to get everyone on the same page.
- Collaborative environment: Small businesses often have a more collaborative and open work environment, which fosters communication and makes it easier to share data insights with everyone in the company. This makes it easier to create a culture where data is valued and used to make better decisions.
- Lower resistance to change: Smaller businesses have a more entrepreneurial and innovative culture, which means that there is less resistance to change. This makes it easier to implement new data tools and processes and to encourage everyone in the organisation to embrace data-driven decision making.
Small businesses are in a great position to weave data into the culture of their organisation, ensuring data-driven decisions become the norm, and are part of the integral values of the organisation, even as they grow.
Planning can help small businesses assess their available resources, including personnel, technology and budget, and ensure that their implementation goals and timelines are realistic. It also helps to develop processes to ensure data quality, such as data cleansing, validation and standardisation. This can help to ensure that the data analysed is accurate and reliable.
When we work on data strategies with large companies, putting roadmaps and plans in place are key to ensuring that milestones are met, and that everyone is on the same page in terms of where we are going and why. Planning is no less important for a smaller business, and putting a business intelligence roadmap in place will ensure that data investments are made in line with business priorities.
In conclusion, whilst small businesses may hesitate to launch business intelligence initiatives due to competing operational priorities, it is imperative that they do, to ensure that they can pick up blind spots and find opportunities that will allow them to grow to their full potential. Small businesses who embark on business intelligence initiatives in a structured manner will experience order of magnitude improvements in their business performance, making this a truly exciting space in which to operate.
“Small businesses that embrace data-driven decision-making are more likely to outsmart their competition than those that rely on guesswork and gut instincts.” – Bernard Marr