Data Analytics: Biggest Benefits and Hurdles

Ask the average business leader how important data analytics is to his or her company, and you’re most likely to get this response: “Very important. We’re not using it as much as we’d like to, but analytics are a big part of our long-term growth strategy.”

A recent report from Dun & Bradstreet and Forbes Insights – Analytics Accelerates Into the Mainstream – sheds light on just how much businesses are implementing analytics across various functions and departments.

More than 300 executives from most major industries based in the U.S., U.K., Canada and Ireland also shared what the key obstacles are for ramping up analytics investment and development.

Decision Makers Don’t Want Anecdotes

First and foremost, analytics “helps [executives] rationalize return on investment (ROI), illustrate business benefits and discover how to optimize data investments moving forward.”

The proof: 71% of execs say half of their spending decisions “include” analytics. (We’d be interested to know how many of those decisions are “driven primarily” by analytics.)

And it’s likely that more growth is coming: Forty-five percent of execs said new big data and analytics projects are in the “design” and “select” phases at their organizations, according to a recent Gartner report.

Looking A Few Years Down The Line

Execs want analytics for the challenging decisions they need to make right now, as well as for managing the business trends of tomorrow.

The top two “new use” preferences show a forward-thinking approach:

  1. Internet of Things (IoT) Analytics – IoT, where various devices share data with each other over a network through sensors and other technology, is growing in popularity. So 57% of execs want IoT analytics within the next 12 months.
  2. Analytics-As-A-Service – With this feature, users get self-service access to advanced tools and external data for analysis via the internet.

IoT is an expensive, game-changing venture for any company. It’s no wonder execs want the means to evaluate if they’re moving in the right direction and keeping pace with competitors.

And many companies don’t have the resources to use an on-premise analytics platform. For these businesses, web-based analytics services are a must if execs want to make the data-driven decisions required to be experts in their fields.

Most Still Behind The Times?

In some cases, business pros are still leaning on the most basic data analytics tool – spreadsheets.

Asked what best describes their organizations’ approach to analytics, execs said:

  • Spreadsheet analysis (23%)
  • Basic models on past behavior and/or regression (19%)
  • Dashboard analysis (17%)
  • Predictive models using combination of internal and external data (17%)
  • Advanced analytical techniques to forecast and anticipate changes (15%)
  • Predictive models using internal data only (9%)

Conclusion: Forty percent of companies are still using basic analytical tools – spreadsheets and dashboards – despite execs’ increasing desire to grow their businesses with analytics and data.

One big problem with relying primarily on spreadsheets is it leads companies to make backward-looking decisions. A common scenario: “We were at a better spot 18 months ago than 10 months ago. How do we create conditions so our profits are closer to where we were 18 months ago?”

Companies that have the best handle on data analytics understand that it’s a way of looking forward with the most accurate info possible.

As Mark van Rijmenam, CEO and founder of BigData-Startups, said to Better Buys:Business analytics is looking in front of you to see what is going to happen. This will help you anticipate what’s coming … analytics will help you move forward and understand what might be going to happen.”

Importance of Finding & Keeping In-House Talent

The Dun & Bradstreet/Forbes report ranked the following challenges as the top four stumbling blocks to strengthening analytics programs:

  1. Budgetary issues
  2. Technology issues
  3. Security concerns
  4. Skills gaps

Twenty-seven percent blame the “skills gap” for stalling their data-mining goals. Businesses say they don’t have the in-house talent to take analytics to the next step.

This may explain why 55% of those surveyed outsource some or all of their data analytics. Of that number, 60% must rely on third-party vendors and suppliers to support data initiatives.

People capital is the underlying critical need over the next five to 10 years. Tech pros have always been adamant that the C-suite needs to do a better job of allocating resources to analytics and selling the benefits within their organizations. Even the top brass agrees: A surprising 38% say business leaders aren’t taking advantage of analytics’ benefits.

Companies may talk the talk, but clearly there’s a lot more work to do before they walk the walk with data analytics. As always, it will come down to convincing internal skeptics and investing in the necessary technology to stay ahead of the competition. Businesses that don’t keep up run the risk of falling way behind in competitive markets.

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