In the modern competitive business environment, data analytics is standing out as key difference maker, delivering consistent better performance over more traditional business strategic or operational practices. Key drivers of this success has been the rise of cloud services and the SaaS model that has allow for rapid and low cost adoption and management of systems to handle data at the scale needed for analysis. This has also served to lower the barrier of entry, opening the flood gates for a greater number of businesses to engage in the practice.
The high level of interest and excitement surrounding analytics is leading to a proliferation of market projections and forecasts. According to Forbes, the data analytic software market is projected to grow from $2.2 billion to $3.4 billion by 2018. That forecast also turns into an expected spending of $8 million on big data-related initiatives from an average business, just this year. With more businesses investing in data analytics, the gap in competition will increase compared to those who do not jump on the trend.
Driving this adoption is the rise of SaaS Software that provides more intuitive graphical user interfaces for data collection and visualization. This key first step will often determine whether a company can switch to a more data driven focus and allow analytics to help generate insights and strategy. A recent study showed companies that use data analytics best are five times more likely to make decisions much faster than competition and two times more likely to use data very frequently when making decisions.
Case in point: according to the Wall Street Journal, General Motors’ finance department used data analytics to look into the profitability, costs, and other crucial elements of their European brand led them to close the brand because of the lack of profitability. Collect and interpret such information with heuristics or from executive intuition use to take management teams years, but with data analytic practices standardizing, strategic decisions can take place faster and with more confidence. Nor is this level of data driven decision-making the sole privy of large corporation and enterprise level organization. In fact, smaller organizations have an edge in the adaption of new business tools as they typically have fewer legacy systems to integrate into their data and can quickly start using new tools like Salesforce, which is offering enterprise level services for a fraction of the resources to deploy and maintain.
It is easy to understand why data analytics for businesses is a growing and expanding market. It provides solutions that can help any company easily see the trends of their strategies. The more data available, more questions can be asked which can turn into profitability, creating a virtuous cycle that not only creates better businesses, but will encourage adoption by demonstrating a clear path to results. Not only do data analytics provide great insight, but they keep businesses in the know. Without staying up-to-date, a business may not be doomed for failure, but will find it much more difficult to expand to its potential – especially considering the number of companies who have moved onto a data driven path.