You’ve undoubtedly heard terms like “big data analytics” or “data science” in recent years. Advances in computer power in recent decades coupled with an explosion in the availability of data have made these terms ubiquitous as companies have scrambled to capture some of the benefits associated with analytics.
These benefits have been considerable, as a recent study by the Business Application Research Center1 indicated that firms that have implemented analytics into their day-to-day operations realize an average 8% increase in revenue and a 10% reduction in costs. Data science has been shown to be particularly helpful at:
- Providing companies with a better understanding of the customer base
- Determining the optimal pricing and channel strategy
- Measuring marketing effectiveness and determining customer segmentation
- Identifying bottlenecks and reducing waste
- Managing inventory and staffing levels
Despite the aforementioned benefits of leveraging data, the adoption of analytical tools has been relatively slow in the middle market. The reason for this is essentially two-fold. First, any type of organizational change is difficult. Change Management is its own managerial discipline of sorts and thus becoming an organization that incorporates analytical learnings into its day-to-day operations is a considerable cultural and tactical shift for many firms. Secondly, maintaining an analytically-capable workforce has also been challenging for many companies. Many hiring managers are not very familiar with data science, so evaluating the capabilities of potential hires can be quite difficult. But even assuming talent can be easily and accurately identified, individuals with data science skills are in relatively high demand and short supply, and this has made hiring and retaining these individuals quite costly.
Setting up the operational infrastructure and data pipelines to capture a company’s data, having the statistical and analytical skills to glean insights from it, and then having the organizational wherewithal to leverage those insights into positive business changes is a rather daunting task for many companies, especially small and medium-sized businesses. Because of that, many organizations have turned to consulting firms to help provide analytical value. The problem with this is that many traditional consulting firms with data science practices specifically target large companies with considerable discretionary budgets. Similarly, many data-oriented consulting companies exclusively offer big data solutions without providing the operational and implementation support tailored to the specific needs of their clients.
Fortunately, Larx Advisors has a well-credentialed team of analytics professionals and management consultants who specialize in serving the middle market.
1Big data analysis shown to increase revenues and reduce costs – BARC – Business Application Research Center. Retrieved September 17, 2020.