For all the buzz around “organic growth,” it’s often very difficult for businesses to achieve. One strategy that can help? Leveraging data analytics to predict trends and bring about greater return on investment (ROI).
Organic growth is critical to a company’s survival. According to a McKinsey review of 15 years of share-price performance for 550 U.S. and European companies, “Those with more organic growth generated higher shareholder returns than those whose growth relied more heavily on acquisitions.”
If you’re finding it difficult to achieve this objective, rest assured that your company isn’t the only one struggling to grow organically. According to Gallup, real U.S. GDP per capita growth has been hovering around 1% since 2007.
In the age of Industry 4.0, with new advanced technologies and tools being developed seemingly every day, businesses face various digital transformation challenges, including:
- Updating infrastructure
- Integrating legacy and digital systems
- Analyzing increasing volumes of data
- Deriving actionable insights from the Big Data available
How to Get Started With Advanced Data Analytics
Implementing the right tools and attracting the right talent for your advanced data analytics efforts can be hugely helpful in bringing about organic growth. Below are some tips for getting started.
Optimize Core Operations
Streamlining your organization’s internal processes is one way to support organic growth. Sales, pricing, and marketing capabilities are very data-driven (or should be by now), so they represent the top targets for optimization. Use data insights to drive better performance by:
- Identifying what is performing best, not what is easiest to achieve
- Increasing productivity and streamlining processes
- Improving staffing levels to better manage operational costs
- Finding operating unit synergies to avoid investment overlap
Improve Supplier Relationships
Advanced data analytics can help your company identify patterns, problems, and opportunities for improved service levels, allowing for better order fulfillment and improved supplier management.
For instance, by analyzing supplier profiles in conjunction with customer complaints or refund requests, your business might identify a partnership that is not performing well, allowing you to move to a supplier with greater success rates.
Predict Trends
Gallup research suggests that the “biggest, most universal opportunity lies in taking a data-driven approach to predicting and responding to future market trends.” Why? Because the greatest risk to your growth isn’t technological evolution or market competition — it’s not understanding your customers and losing them to other businesses.
With Gallup suggesting that only 3% of companies employ predictive analytics to keep abreast of industry patterns and dynamics, this is an obvious area where your business can stand out. Delving into the data can help business leaders predict and understand:
- Evolving customer preferences
- Changing end-user behaviors
- Shifting marketplace trends
- Potential competitive threats
Benchmark Goals
“Advanced analytics plays a decisive role in driving growth,” according to McKinsey research. Yet the research also identified company shortcomings in recognizing analytical potential, investing in analytics, and supporting analytical capabilities.
The goal should be to identify quality data amid the great quantity of data points available. From there, clear goals can be outlined to develop accountability and determine the ROI of analytics investments.
The Value of Data Analytics
Through advanced data analytics, your business can improve customer relationships, outpace competitors, and adapt more effectively to ever-evolving, dynamic markets — all of which are crucial for driving improved organic growth.