Where to Start Building Data Strategy for a Small Business
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Depending on your outlook, your small business might be inspired or intimidated by data science. No matter which end of the spectrum you’re on, one thing you can’t afford to do is ignore it. Data may be the single most important thing you can use to boost profits and cut costs.
McKinsey’s 2021 study on the state of artificial intelligence in business found more than 25 percent of businesses can attribute at least 5 percent of their earnings directly to AI. AI is having an even bigger impact on cost reduction – one-third of respondents said AI adoption cut their costs by 20 percent or more.
So how can you make data work for you? You might want to jump in the deep end and start investing in the trendiest tools. But hold up a minute. I’ve helped clients in a number of industries to achieve these kinds of results, and it never starts with a data tool shopping spree. It starts by developing a solid data strategy.
You Are Here
Regardless of your company’s size, the first thing we need to do is figure out where we’re starting from. We can’t map a path to your goals if we don’t know where to start.
The strategy assessment will include such information as your workflows, existing analytics, and data tools you’re using now.
Once we know the starting point, we need to choose a destination. What are your goals? Common data goals include:
- Building dashboards to take advantage of analytics
- Building machine learning models
- Reducing costs
- Increasing profits
- Creating a data product
Early on, you might not know what your specific goal is. In that case, your data consultant will start with a general goal and narrow it down to actionable pieces.
Take a Data Inventory
First, wrap your head around the fact that data is an asset, just like your merchandise or office furniture.
To get value out of that asset, you need to understand what you have and where it came from. You might not realize how much data is being stored by tools you use every day, including Salesforce, Hubspot, Stripe, Shopify, and more. Even a business with nothing but a website and a Facebook page has access to a wealth of data.
Before we plan your data strategy, we need to know what data you have and what questions it might answer.
Choose Your Storage Option
Your data strategy will rely on your data being managed and accessible in a centralized location like a data warehouse. We call your data warehouse a “single source of truth” because it prevents data from being cherry picked or skewed out of context.
Data warehouses are not exactly plug-and-play. They do require a general understanding of data modeling, though they’re much more user friendly for a small company than they were just a few years ago.
Data warehouse and pipeline technology used to be the domain of large companies because of the startup costs. But thanks to AWS and other cloud providers, small businesses and startups can now take advantage of all the power a data warehouse has to offer. Rather than paying a team of technical staff to design, develop, and implement a data warehouse, you can pay a single data consultant a fraction of the cost to set up your data warehouse management on a virtual private cloud.
Go to Work
With your warehouse set up, your tools in place, and your goals outlined, you’re ready to develop your strategy roadmap.
A data consultant can be a valuable partner here. You can try to figure out the pieces you need yourself, and vendors will be only too happy to tell you how perfect their tool will be for your every need. In the long run, though, a data consultant is a cost savings. We work backwards from your end goal to design a streamlined data infrastructure that includes everything you need without a bunch of expensive and unnecessary bells and whistles.
Because we’re not tied to any one tool or another, we can also give you an honest assessment of which tools and combinations of tools will be the best fit for you. And we’ll make sure your infrastructure is built with enough flexibility that it will be easy to maintain and scale as your strategy matures and your business grows.
Once your infrastructure is built and your strategy is in hand, your small business will be ready to play the data analytics game like the big boys, and realize all the benefits data science has to offer.
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