The world is rapidly moving towards fully digitized businesses. Due to this digital shift, a large amount of data is generated daily. Sooner or later, a business must realize the significance of Data Analytics for organizational growth.
Modern businesses understand the necessity of investing time and effort in Data Analytics. However, only a small amount of data is analyzed after being collected. A 2021 study concluded that almost 63% of employees fail to extract insights from the collected data in the given timeline.
To answer why organizations fail to utilize data, we must be aware of the data analytics challenges faced by businesses in modern times.
Major Data Analytics Challenges
To build a data-driven organizational culture, modern companies need to understand the major data analytics barriers and how to cope with them.
Let us now discuss the biggest data analytics challenges in the business industry.
- Gathering meaningful data: There is an infinite volume of data present in various aspects of a business. Handling voluminous sets of data from different channels is a challenge for employees as they are unable to draw critical insights. As a consequence, employees analyze data that is easily available leaving behind the data that is essential for their business.
- Selecting the right analytical tools: The next big Data Analytics challenge faced by businesses is choosing the right analytical tool to handle large chunks of data. Since there are numerous tools available in the market, it becomes difficult to select the best option. If employees are not able to determine the right analytical tools for various data handling purposes, all the time and efforts are wasted.
- Consolidating data from multiple sources: Data is present everywhere. It means data is scattered across different locations. Moreover, the data on various sources will be available in different formats. Sorting such scattered data will not be an easy task and gets complicated when handled manually. Consolidating the data and analyzing it, is a common Data Analytics challenge businesses face. Due to different original sources of data, it becomes more prone to error making the data unreliable.
- Quality of data: Incorrect data in Data Analytics is the biggest challenge organizations must deal with effectively. If the quality of input data is erroneous, the output generated will be flawed and unreliable. The primary reason for inaccurate data is the manual errors made during data entry. Another reason for poor quality data is disparity in data. If data is modified in one system and left unchanged in other systems it would create asymmetrical data.
- Data culture of an organization: A study revealed that the greatest obstacle in the way of becoming a data-driven organization is due to its culture and not technologies. It is found that the top management understands the relevance of Data Analytics but fails to extend this knowledge to the employees so that they can become data handling experts in their fields. Constant pressure on the employees and lack of support from the top level executives is one of the major Data Analytics challenges for a business.
- Data security issues: Once the significance of Big Data is realized by organizations, they must learn to store, understand, and analyze it. However often companies overlook the critical threats that are associated with privacy and security of large volumes of data sets. Securing the crucial information of an organization is a necessity for every business. If companies overlook this aspect of data, they can become easily prone to cyber attacks.
- Data visualization: The main objective of investing money, time, and efforts in Data Analytics is to make well-informed business decisions that lead to better ROI. Data visualization is beneficial and challenging at the same time.
Steps to Tackle Data Analytics Challenges in a Business
Data analytics is an essential component of many businesses today, as it helps them make informed decisions and identify trends and patterns in their operations. However, like any other business process, data analytics comes with its own set of challenges. Here are some ways to tackle data analytics challenges in a business:
- Define your goals: Start by defining your goals for data analytics. It will help you identify the key performance indicators (KPIs) that matter to your business and prioritize the data you need to collect and analyze.
- Collect relevant data: Ensure your employees collect vital data that aligns with your business goals. It will help you avoid collecting unnecessary data, which is time-consuming and expensive.
- Use the right tools: Choose the right data analytics tools that suit your business needs. It includes data visualization tools, data mining tools, or machine learning algorithms.
- Ensure data quality: Ensure the collected data is accurate, complete, and consistent. Poor data quality can lead to inaccurate results and incorrect business decisions.
- Hire skilled analysts: Hire highly-skilled data analysts who can help you interpret the data and make informed decisions. They should have a deep understanding of data analytics tools and techniques.
- Communicate results effectively: Communicate the results of your data analytics to stakeholders clearly and concisely. It will help them understand the implications of the data and make informed decisions.
- Continuously improve: Constantly improve your data analytics processes and techniques by staying up-to-date with the latest trends and technologies in the field.
By following these steps, you can overcome data analytics challenges and ensure that your business makes well-informed decisions based on accurate data.
When organizations are well aware of the upcoming challenges, they can easily be tackled in time. When companies know the Data Analytics challenges and their solutions, they must implement them in a more structured way.