How to use data analysis to solve problems in any business
Business Analysis: How to analyze any startup
It is not news that running any business is not for the faint of heart. Typically it entails quite a number of moving parts. But when it comes to startups, that is is a different kettle of fish. To put this into perspective, let’s take a dive at some of the challenges that come with running a startup;
- Startups have to deal with stiff competition. As they, “there’s nothing new under the sun”. Any idea you are trying to introduce to a market already has a product or service currently serving that market and providing what could seem like a satisfactory solution. You are probably bringing a few tweaks or a different approach to solving the same problem. The competition you are coming up against has no intentions of letting your startup take away market share from it and as such will put up a good fight to ensure that does not happen. Your startup in this case will most likely assume the position of the underdog. As much as everyone loves the underdog, the underdog does not always win. In fact, only about 1% of the time will there be a success story for the average underdog.
- Unrealistic expectations. For every time your startup scores a win, more expectations are raised. Often time, these expectations keep building and force the startup to collapse under the weight of poorly set expectations. The ideal thing for startups is to aim for sustainability if they intend to play the game in the long run. Sustainability does not imply docility, rather it means that they should be able to break things down to allow for simplicity and consistency.
- Challenges with hiring. Every business faces this challenge but for startups, the reality poses critical threats to their success or failure. Startups are typically fast-paced and high-pressure work areas. This means that they require people who can make small autonomous decisions quickly for the good of the company. It also means that the drive to succeed has to be high enough to make team members go over and beyond to achieve goals and stiff timelines. There are certain mindsets that come with working with startups and if a startup can not get human resources that check out such mindsets then it will become a situation of square pegs in round holes.
- Choosing the right partners. The game here is about credibility which is difficult to come by. But then success is hardly achieved without partnerships. The problem then becomes, how to find and choose the right partner. Partnerships have a few moving parts to them which is why choosing one with the right fit will make a mar a business’s future. But if the initial hurdle of choosing a great fit can be scaled, it then comes down to creating a win-win situation that helps every partner involved get the most out of it.
- Managing Finance. Businesses are built to make a profit. For startups, the first few years are always critical, generating revenue and managing backed-up funding can be challenging. It usually feels like walking a tight rope. Hence, startups need highly specialized finance personnel that can help them wade through murky waters and gain clarity as to how their financial situations are and how to improve them. Often times while still trying to figure out the market, pressure from investors can cause fatal missteps.
- Gaining trust with Customers. Every business owner knows that it cost a lot to gain customers. It doesn’t make any difference whether you are an already established business or a start-up. And when you do get a customer, the level of satisfaction that the customer derives from using your product will define how well your product will do in the long run. So a startup will most likely encounter the uphill task of ensuring optimal customer fulfillment.
Who is a Business Analyst and what do they do?
A business analyst is personnel who is charged with the task and duty of spotting and advocating change within an organization and optimizing value for the organization. Business analysts are very involved in any area of a business and at different levels. They are involved in defining goals, and strategizing and tend to hold significant leadership roles in organizations. The business analysis goes further into modelling an organization, ensuring that profit is maximized and the cost is effectively managed, accessing an organization’s capabilities.
Processes involved in Business Analytics:
Addressing the Problems in the Business
As a rule of thumb, before any form of analysis can be done, it’s always best to specifically point out what problem you are trying to solve. Some of these problems can sometimes come in complex forms. When faced with such a situation, breaking the problem down into component parts and pieces could offer a better perspective on dealing with the bigger and more complex challenge.
Spotting Potential Interest from the Data
The entire essence of business analytics is to make sense of data derived for a business’ use. So having gathered the necessary data, you would need to look for important indicators of interest that your business needs. This is made possible by having the data on a spreadsheet and with the help of exploratory data analysis conducting computations for missing data and spotting outliers
At this stage of a business analytical process, you will need to define your analytical model using statistical analysis techniques such as correlation analysis and hypothesis testing. The business analyst then attempts to point out in the dataset what they would like to gain deeper insight or understanding about. This entails collapsing the data and comparing varying groups.
Evaluation of Data
To evaluate data or business analysis purposes, you as a business analyst will examine information derived from the last step. The outcome of your evaluations could be in the clusters, relations, trends, or rules gotten from your evaluation. Business analysts like you more often than not use certain predictive techniques to derive patterns and insights that highlight the indicators in the most persuasive variables. So with the help of high-performing analytical models based on model accuracy, data derived can become pointers for new and exciting opportunities.
Optimizing Results and Solutions
After data validation has been done, the business analyst applies what is known as the ‘what if’ situations, with the aim of optimizing for the best possible solutions to the challenge earlier pointed with the necessary considerations and constraints. The outcome here is to determine how the solution can be achieved in a way that is user friendly and delivers the needed customer satisfaction in a way the risk is minimized and the business goals, objectives all align and are achieved
As a Business analyst at this point, you would want to take action based on the insights and discoveries you have made from the data you derived in line with solving the existing business challenge you had set out to resolve. Whatever decision you make will put the business in the direction that should help it deliver an amazing product or customer experience as well as help the business stay profitable.
Improve performance system
Here, all the processes and efforts that have gone into achieving the business analysis including actions and decisions taken will be documented. This is critical as it will always serve as a reference point for improving the systems and processes which are currently available. Certain queries that could help understand the outcome better are inputted into the databases. At the end of it all, the business sees performance improvements
Business Analysis Skills
As a business analyst, you will need to equip yourself with these 5 skills to be competitive in your field
- Analytical Thinking skills. As a business analyst, you need to have the ability to collect facts and examine them, with the aim of logically identifying causes and effects. At the peak of your performance, you should be able to collect all the relevant information and data needed to address the problem, organizes, classifies, and synthesizes the data into fundamental issues, from the information, identify the most probable causes of the problem, reduces the information down into manageable components, identifies the logical outcomes from the analyses of the data collected, identifies the options and solutions for addressing the problems analyzed.
- Communication and Interpersonal skills. This is an essential skill that you would require. Being a business analyst implies that you will need to articulate your thoughts, ideas, and findings up and down the change of command. Ineffective communication can be very expensive due to the back and forth and error in delivery it could cost a business. And considering that you occupy a leadership position within an organization, your ability to manage relationships and people will help you get the most out of people while ensuring productivity is achieved.
- Negotiating and cost Benefit analysis. Business analysts are very crucial to negotiating most aspects of the project phase. Negotiating can be used to determine the vision of the project, functional designs, technical requirements, and so on. Understanding the application of cost-benefit allows business analysts to determine early on if a particular project was worth the business’s resources before the project’s inception.
- Decision-Making Skills. When you consider the leadership demands that come with the role of a business manager, you should see how being able to direct the course of action or take actions can impact the success or failure of a business. Being a business analyst entails thinking through problems, making sense of data, and channeling the needed resources in the necessary direction. This skill like every other can be developed but an integral part of this is taking ownership and having a significantly high sense of responsibility.
- Reporting. Bringing all the previously mentioned skills together will not be complete if the ability to translate and communicate insights, success, or failure of a project is lacking. Reporting back activities keeps every team member and partner in the know of the situations as they arise. The insights shared by business analysts create a synergy of efforts and activities towards common business goals.