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BUSINESS INTELLIGENCE 5

Startups’ failure to use business intelligence.

Name: Yakub Pasha Shaik

Professor’s name: Dr. Patricia Pedraza-Nafziger

Topic: Startups’ failure to use business intelligence.

Background / Problem Statement

Startups rarely apply business intelligence applications, and most of them cling for several reasons. 56% of small businesses rarely monitor their data, while 3% of such businesses have never considered business intelligence as an important aspect of their operations (Herve, n.d.)

Description and analysis of the issue

With the current globalization of markets, increasing competition, ever-changing market conditions, and customer needs, there is a need for companies to adjust and adapt to those conditions. It has become difficult to fast and comprehensively assemble the growing company’s data manually. That is why most companies are using business intelligence. Business intelligence has tools that help in the collection, integration, editing, storage, and analysis of data (Anonymous, 2017). They then generate reports from those data, which are important in decision making in the company. The small and startup companies, however, have drifted away from using BI because they assume that it is for the large companies which have resources to pay for the IT experts (Azeroual & Theel, 2018). Out of 10 startup companies, only 8 of them succeed in the first year of operation. Most of the reasons for the failure of startup companies is behavioral and not financial. These problems could be solved, and the corporation’s durability ensured by incorporating business intelligence. Despite the clear need for business intelligence, most startups still fail to employ IT analytics to0 help them discover their markets before they run out of cash (Azeroual & Theel, 2018).

One of the reasons why startups fail to use business intelligence is that they claim it is expensive (Herve, n.d.). This is a fair reason because any high capitalization for either hardware or software could discourage any optimistic entrepreneur. However, startups must be ready to take risks for the growth of the business. Survey has shown that most of the startups neglect their data and concentrate on other things. Startups should appreciate the value of data because it gives them their competitive advantage. Data analysts are, therefore, important in analyzing the market, customer needs, and marketing strategies. Since startups they obviously will not need a large number of analytics like the large corporations, what they need is a basic data course that meets their needs and provides opportunities to scale them up as the business continues growing.

Another reason making startups not use data analysis tools is that they claim their data is small and it is therefore not worth it (Acito & Khatri, 2014). This is very wrong because data analysis is not all about the amount of data but the variety of data that’s collected. Most of the companies are now embracing fast and smart data. They are moving away from the big volume data. In any case, smaller and startups have an advantage over the extensive co-operations because when they are faced with problems, they can address them in a more focused way (Anonymous, 2017). However, good research is required before employing any data analysis tool. Companies must identify their needs before stumbling into any business intelligence applications. This approach prevents investment in meaningless forms that end up raising the costs of operation and add limited value to the company.

Over the years, business technologies have evolved and registered a great deal of advancement. In particular, business intelligence now has features that are suitable for startups. Apart from those big players meant for the substantial co-operations, contemporary business intelligence applications now have open sources which solve the problems of startups. Companies that are at the startup level prefer open sources because they are negotiable; they have support benefits and are locally available. Some of the open sources recently introduced into the market are; Jaspersoft, Pentaho, jedox and spangoBI. (Acito & Khatri, 2014) These new vendors perform all the five tasks of business intelligence. They also have free and commercial versions that are affordable to startups. The retail versions have advanced special features, and they provide professional support, which makes them easy to use even by employees who lack training in information systems.

Apart from introduction of new features suitable for startups, the cost of feature-rich business intelligence software has drastically decreased to a price that can be afforded by even resource restricted- startup companies (Acito & Khatri, 2014). This is because startups do not need to have a large number of data analysts like the large co-operations. They can now use basic data courses that can meet their needs and may increase them later on as the business continues growing. With the new generation of business intelligence features and the reduced costs, it has made it easier for companies of different sizes, including startups, to adopt the business technology. Startups can now manage their data and make them their assets, and they can use this as their competitive advantage.

In conclusion, startups need to adopt business intelligence tools that help them to acquire relevant data and to create a competitive advantage. By using appropriate technologies, the small companies will be able to; collect data, store, integrate, and analyze existing data. In this way, business processes can be aligned to the needs of the market to prevent wastages and to promote growth. The availability of less expensive business intelligence tools provides startups with a variety of options that can be used to improve the status quo.

References

Acito, F., & Khatri, V. (2014). Business analytics: Why now and what next?. Business Horizons, 57(5), 565-570.

Anonymous. (2017). Study of adaptive business intelligence techniques for optimization of organizational decision making (In select automobile manufacturing companies in Maharashtra). International Journal Of Recent Trends In Engineering And Research, 3(7), 146-162.

Azeroual, O., & Theel, H. (2018). The Effects of Using Business Intelligence Systems on an Excellence Management and Decision-Making Process by Start-Up Companies: A Case Study. International Journal Of Management Science And Business Administration, 4(3), 30-40.

Herve, A. (n.d). Why Startups Need Business Analytics. Channels.theinnovationenterprise.com. Retrieved from https://channels.theinnovationenterprise.com/articles/why-startups-need-business-analytics