5 myths about data and data analytics for SMEs

data analytics on a laptop

There’s a lot of misinformation about data – who should use it, how to access it, and how to apply it. Here are five common myths we hear all the time, debunked.

It’s all about Big Data and big companies – it can’t help SMEs

This just isn’t true. Small and medium-sized enterprises businesses can use their data to understand more about their customers and clients, help them acquire more of their ideal customers, and improve their systems and processes. They can also use the rich sources of external open data to help them with business research. You should start the data journey by identifying why you need the data.

We can’t use our data – we have it in multiple places

This is a common problem with most processes and something we have heard people say many times. However, multiple data sources doesn’t block you from using data to improve your business. Software such as Microsoft’s Power BI can take data from multiple sources. This data can then be analysed to provide you with insights and analysis to help you drive your business forward.

We have so much data we wouldn’t know where to start

You can read a plethora of articles and commentary that focuses on the science of data. Many of them will leave you believing that you can’t start the journey unless you or one of your team has a degree in data science. Frankly, this is nonsense. Start with setting your strategy, and then devising the key performance indicators (KPIs) that will show you how you are getting on.

For example, if one of your main strategic aims is to grow your customer base by 10% per annum, then think about questions such as:

  • What market segment(s) am I targeting?
  • What are the characteristics of these customers? For example, age, gender, where they live, other places they shop, etc
  • Do we already sell to this segment? If so, what did I do to get these customers in the first place? Can I expand/replicate this?
  • If it’s a new segment, where and how should I market my service or product? Who are the best people to help me? Do I need a sales team, and what skills should they have?

You get the idea. You can then use your current data to help you answer these questions, use external data for research, and make sure you have the systems and processes in place to keep improving the quantity and quality of that data.

I don’t need data – my instinct tells me what I need to know

It’s true that data on its own has no value – it needs interpretation and thought to give any benefit. Equally, instinct alone can lead you to the wrong result.

For instance, try the following test on your family or colleagues:

  • Ask some of them to guess what the total is of the sum 8x7x6x5x4x3x2x1.
  • Ask others to guess what the total is of the sum 1x2x3x4x5x6x7x8.
  • You’ll see that the majority of people in group 1 will guess a much higher total than those in group 2.

This is simply because the human mind is programmed to think a total is higher if you start with higher numbers.

The fact is that the best results are given by using data to either prove or disprove what you thought may be happening in your business. Plus, data will sometimes show you trends that you didn’t even know exist.

Thinking data is just an IT project rather than a business project

This couldn’t be further from the truth. Of course, you may need IT input, but first and foremost, better use of data should be a culture that exists throughout your business.

While your IT infrastructure will be relevant, the first thing you need to understand is business need. So, the best place to start is with a clear strategy. Good financial information and getting help and advice in this area from your accountant is often a good approach. In other words, if you need it, get help from people with business experience, not just IT experience.

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