You’re starting to see your data pilling up everywhere and you’re feeling guilty for not harvesting the precious insights you know you should. Moreover, data science, predictive analytics, machine learning and AI all seem like common phrases nowadays. But how do you actually get started?
The truth is, getting started is not that difficult. In fact, it is easy. Too easy. There are a ton of software available and getting insights seem to be just a click away. But you know better than that. Your gut is telling you that this seems too good to be true. And you’re asking yourself, “will I ever get my ROI from these potentially expensive analytics investments?”.
I’m here to share some of my experience to help you avoid sinking important resources into something that may not benefit your business. Here are 3 things you need to know before you invest into advanced analytics:
One: Truly define the goal or question you would like to get answered from analytics.
It is too easy to hop on the super-hot data science bandwagon. Without knowing what you want out of your analytics effort, purchasing an encumbered solution can really set your business back. Imagine all the better ways you can make use of the funds that is spent on a solution that is just not right for you.
Instead, I suggest taking some time to think, and discuss with colleagues or a consultant, how your specific business can benefit from analytics. Yes, your specific business at its current state.
Discuss questions such as 1) Do I understand what factors are driving my profits? Or keeping my cost too high? 2) Who are my customers? Do I know them better than them knowing themselves? 3) What aspects of my business may need a forecast or prediction to gain an edge over the competition? These are great questions to get started on really honing in what your business can gain from the results of any analytics effort, NOW.
Two: Understand what data you have or can collect
When evaluating analytics tools and software, and when speaking to a consultant, it is best when you know your data. What type of data do you have? What are the sources?
For example, do you use Google Analytics in conjunction with Salesforce? Maybe you’ve been keeping data in good old Microsoft Excel. Whatever the case, knowing what you have (and what you can collect) will save you time and money. Remember the 1/100 rule? Every 1 second spent in preparation is 100 seconds saved in execution. This is particularly true in analytics.
By the way, a good consultant will be asking you A LOT of questions about your data. Nobody wants meaningless results. So, it is in your benefit to know as much as you can about your data.
Three: Start small and grow.
Get ROI as soon as possible! As a small or midsize business, you should not invest into projects that will only bear fruits after 6 months unless you’re very sure of the project’s value. The truth is, things change and lengthy projects may become out of date before you can rip the benefits from it.
Instead, start small. Ask very targeted questions and learn more about your business from the data in small chunks. You can always build on what you know and invest in a larger analytics project when the time is right.
Unless you’re experienced and know exactly what you need, don’t be pressured to commit into an analytics mega-plan that proposes to yield insights in the long run. It is often more beneficial to quickly learn and take actions that will increase your ROI as soon as possible. Finally, always ask specific relevant questions of your data, and if you’re working with a consultant, do not be afraid of their questions. The more questions asked by your consultant, the more deeply they are actually thinking about your problem.