Data analytics serves as a powerful tool for businesses seeking to optimise their operations, understand their customers, and drive growth. In an era where data is everywhere, integrating analytics into business strategy is crucial for staying competitive and achieving long-term success. That is why this week’s Entrepreneur Weekly will break down data analytics so entrepreneurs can leverage raw data to answer questions or gain important insight.
WHAT IS DATA ANALYTICS?
Simply, “Data analytics is the process of storing, organising, and analysing raw data to answer questions or gain important insights”, according to the University of Pennsylvania.
For businesses to thrive in this data-driven world, understanding and leveraging data analytics is essential to enhance operations and maintain competitive edge. Proper data analysis can uncover patterns, trends, and insights that can inform business decisions. By analysing historical data, organisations can understand their performance and predict future outcomes.
While the field of data analytics can seem complex, Micro, Small & Medium-sized Enterprises (MSMEs) don’t need to become data scientists to benefit from its power. Businesses interact with data every day! These include:
– If you make sales, then you have Sales Data – Information about products sold, revenue generated, and customer purchases. Leverage this data to identify trends, forecast demand, and refine sales strategies, ultimately boosting revenue.
– You have customers? Customer Data – Demographic information, preferences, and behaviours of customers. By analysing customer data, you can identify preferences, segment audiences, and personalise experiences, leading to increased satisfaction and loyalty.
– Promoting products or conducting research? Marketing Data is key! Understanding how products perform in the market enables companies to make data-driven decisions on product development and enhancements.
But how can you use the data available?
Here are some key techniques that you can leverage:
- Descriptive Analytics: This involves summarising and describing data to understand what has happened. For example, MSMEs can use descriptive analytics to track sales figures, customer demographics, and website traffic.
Diagnostic Analytics: This technique delves deeper into data to understand why something happened. For instance, entrepreneurs can use diagnostic analytics to identify the root causes of customer churn or declining sales. - Predictive Analytics: This involves using data to forecast future trends and outcomes. MSMEs can use predictive analytics to predict sales, customer behaviour, and market trends.
- Prescriptive Analytics: This technique goes beyond prediction and provides recommendations for action. For example, MSMEs can use prescriptive analytics to determine the optimal pricing strategy or marketing campaign.
There are a variety of tools and resources available to help MSMEs implement data analytics. Some popular options include:
– Cloud-based data platforms: These platforms provide a scalable and affordable way to store and analyse data.
– Data visualisation tools: These tools help MSMEs visualise data in a clear and understandable way.
– Business intelligence software: This software provides a comprehensive suite of tools for data analysis, reporting, and dashboarding.
Case Study: Netflix
Netflix analyses what shows users watch, when they watch them, and how often they re-watch certain titles. This insight helps the company tailor its content library to meet viewer demands. By using predictive analytics, Netflix can forecast which genres or themes might resonate with audiences, leading to the production of hit series like “Stranger Things” and “The Crown.” Their ability to harness data has not only improved user experience but also driven significant subscriber growth.
You can do it too!
Digital Jamaica
The Jamaica Business Development Corporation (JBDC) conducted a survey mapping the MSME sector’s adoption of digital technologies. The survey conducted under the Digital Jamaica Project uncovered that the capability to use data analysis and insights for the development of new goods or services is present in only 10.33% of the surveyed businesses.
This low adoption rate suggests that a significant majority of MSMEs are not capitalising on the potential benefits of data-driven innovation. Such businesses may be missing critical opportunities to evolve their product lines and services based on actionable insights from their data, which could otherwise guide them in indemnifying new market trends, customer preferences, and potential areas for competitive differentiation.
Through the Project, 2700 MSMEs will be trained in several areas including Data Analytics.
Learn more about the Digital Jamaica Project: https://www.jbdc.net/project/digital-jamaica-digital-transition-programme-for-jamaica/.
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