An important skill for the modern entrepreneur is information literacy. You need to be able to quickly collect and properly analyze data in order to benefit from it. How to do it – on your own or with the help of business analysis specialists – everyone decides for himself. In this article we will talk about the importance of business analysis for entrepreneurs.
Any kind of entrepreneurial activity needs constant analysis of information. It helps transform accumulated data into concrete conclusions upon which effective decisions can be made.
BI helps business owners or managers generate and implement actionable ideas that make more money by reducing operating costs.
BI includes not only data analysis, but also performance management, predictive modeling and more. Depending on the level of business development and its scale, different business intelligence technologies are used.
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How Business Owners Handle Information
The budding entrepreneur usually handles data collection, accumulation and analytics on his or her own simply because of the small scale of the business.
Over time, paying attention to current tasks becomes more and more difficult:
- Need to analyze every sales proposal;
- track invoices for payment;
- consider giving a discount, etc.
Entrepreneurs who aren’t afraid to delegate delegate this work to employees, and they themselves focus on global, forward-looking tasks.
The second type of business owner tries to keep everything under control because they are afraid of being cheated.
They spend all their energies on operations, so there is often no time for business development.
Both are concerned about improving the state of the business. But because they are inside the business, it is difficult for them to objectively assess the situation.
In addition, not everyone dares to seek advice because they don’t want to disclose details of the company’s operations. Information about customers, prices, shipment volumes, and other data is hidden because it is a trade secret.
Business Intelligence Tools
At each stage of business development the most convenient business intelligence tools are used. They simplify an entrepreneur’s life, save time and help find ways to optimize company operations.
When entrepreneurs start their business, they use simple data accounting tools (Excel, 1C), which work according to the “do-it-yourself” principle. But as the business grows, there is a need for more serious analysis, which requires other tools for studying and visualizing data, as well as help from specialists – business analysts.
What Is Business Analysis and Why Do It
Business analysis is the study and evaluation of a company’s processes. It is conducted to find points of business growth. The analyst examines the current situation, assesses the goals that the director or owner is striving for, and helps find opportunities to implement them.
Companies that have expert analysts on their staff conduct the analysis themselves and involve developers only for a specific project.
If a company does not have internal experts, it invites outside experts to conduct the analysis and perform the task.
The management of a logistics company wants to increase profits and expand their business. They hire business analysts to evaluate the effectiveness of existing processes and identify needed changes.
The analysts study the delivery process and recommend automating it: developing an app for drivers and creating a chatbot to handle orders.
The company implements the changes and gradually achieves the goal of increasing profits.
The main purpose of business analysis is to understand which processes require changes and to suggest mechanisms for correcting the situation. In order to properly assess the current situation and growth points, a comprehensive business analysis must be performed.
A metallurgical company starts digitalization of production, but does not conduct a full-fledged business analysis: management prefers to focus on departmental indicators and does not consider overall performance statistics. As a result, new changes and technologies fail to integrate into current processes and create a unified system.
Business analysis before digitalization avoids these mistakes and allows you to see the full picture of necessary changes.
The benefits that business analysis brings to a company:
- Helps identify ways to improve operational efficiency;
- Allows you to establish the exact cost of the project;
- Helps find ways to reduce costs;
- Helps reduce time and speed up development.
Business Analysis Results for the Company
Business analysts will point out the points of growth and help find out which features of the future product are the most important. This will help weed out unviable ideas and save money and time on development.
As a result of the business analysis the company receives:
- A complete project specification, including a description of all the functions and user features envisioned in the product;
- A visual prototype of the product, which demonstrates the device and features of the user interface.
- The specification is a ready guide for developers, while the visual prototype is a visual aid for designers. With these documents in hand, a company will be able to start development with any contractor.
Business Analysis Services
The main task of business intelligence is to optimize the business management process, develop business activities, find new opportunities and options for the company to reach a higher level. Technology offers a significant variety of competing solutions. One of them is business intelligence services.
- They perform the following functions:
- Keep records of expenses and revenues;
- carry out management accounting;
- provide marketing and sales automation;
- generate reports (including reports for in-depth analysis);
- They carry out planning, etc.
How Long Does a Business Analysis Take
The duration of a business analysis depends on the scale of the project:
- A simple service, such as a mobile food delivery app with only a user interface and administrative panel, would require about 40 hours of business analyst time.
- A marketplace or telemedicine service with two types of users-a customer and a service provider-requires 100-120 hours of analysis.
- A CRM or ERP system is designed for a large number of users with different roles and capabilities, and all of them must be studied and described. The analysis will take at least 120 hours.
- BI systems or large-scale user projects, such as a data center for the purchasing department of a large corporation, will require 160 hours or more for analysis.
When contracting with analysts, discuss the exact timeline and milestones of the project. Make sure you have the same understanding of goals and deliverables.