Introduction 

Today’s businesses are data-driven and business analytics are at the core. The importance of not just data, but meaningful data is all companies crave! And, why shouldn’t they crave meaningful business analytics? It comes with a lot of benefits – such as decision-making, improved customer experience, efficiency improvements, and the list goes on.  

But, as you know good things ain’t come easy. Data analytics is beneficial, but it is complicated and comes with a lot of challenges. 

Did you know, that only 12% of the data collected is evaluated? Surprisingly, 63% of the workers are unable to draw conclusions from the data gathered within the allotted period. There are a lot of other challenges as well. But, why is this the case? Why can’t businesses make use of data? What are the most common data analytics difficulties faced by businesses?

To answer all your questions, common challenges, and how businesses can better manage it all – we have curated a comprehensive guide. So, let’s get started. 

What is Data Analytics?

Data analytics is a systematic method for transforming raw data into useful insights. This process includes a set of technologies and tools for data collecting, cleansing, transformation, and modeling.

It helps firms improve decision-making processes, strengthen risk management techniques, and improve customer experiences. Data analytics presents statistical summaries to provide a short overview of quantitative data.

Data analytics is commonly confused with data analysis. Although these concepts are related, they are not identical. In fact, data analysis is a subset of data analytics that focuses on extracting relevant data.

Data analytics is a broad phrase that encompasses everything from simple data analysis to conceptualizing data collection methods and developing frameworks for data storage.

Also Read: Two Way Data Analytics in Shaping Retail Businesses 

Top 9 Challenges of Business Analytics you Should be Aware About!

Data analytics is crucial for making informed decisions and driving business growth, but it comes with its challenges. From managing massive volumes of data and ensuring its security to handling inaccuracies and the high costs involved, businesses face several hurdles. So, understanding these challenges and finding the right solutions is key. By tackling these issues, companies can make the most of their data and stay ahead of the competition.       

Challenge 1: Collecting of Huge Chunk of Data 

Businesses collect large amounts of data and this huge chunk of structured & unstructured data can create a huge mess. 

Consider it this way. Data is everywhere across your channels, including email, social media, websites, paid search ads, and virtual stores. As time goes on, the analysis may become too much to handle and the insights may not be as thorough. However, you must still use data to gather insightful information in order to accelerate your company’s growth and stay ahead of competitors.

Furthermore, you must handle information with utmost accuracy because even little data inaccuracies might have a negative influence on the company. Thus, it’s crucial to use automated analytics solutions to gather, organize, and analyze the data in real time in order to prevent the time-consuming and significant risk of error.

Solution: AI can handle & manage massive data with ease! 

AI is a game-changer for handling massive amounts of data from various sources like emails, social media, and ads. Instead of getting bogged down with overwhelming data, AI automatically gathers, organizes, and analyzes it in a real timeline. 

This means you get clear, accurate insights quickly without the hassle of manual work. Plus, AI helps reduce mistakes by keeping your data clean and reliable. It helps you stay on top of your data, make smart decisions fast, and stay ahead of the competition. 

Also Read: Choosing the Right AI Data Platform For Your Business

Challenge 2: Difficult to Cope up with Changes 

The change is need-of-the-hour and businesses need to cope with it in real-time. The competitive environment and changing client requirements necessitate continuous adjustments to business processes, products, and services(that too in real-time). 

However, when businesses are dealing with a huge chunk of data, it becomes difficult to collect all the data in real-time, analyze it, and react accordingly. Traditional data collection and analysis methods can be too slow or cumbersome to keep pace with real-time changes. Manually gathering data from various sources, processing it, and deriving actionable insights can be overwhelming.

And, if you are left behind you’ll lose your business to your competitors. 

Solution: AI can help you with real-time insights! 

AI data analytics can really help businesses keep up with fast-moving changes. Instead of manually sorting through tons of data, AI automatically collects and combines it from different sources, giving you the latest info right away. 

It also speeds up the analysis, spotting trends and patterns quickly. With AI, you can even predict future trends and adjust your plans before they fully hit. Plus, it makes reporting a breeze with easy-to-read summaries and dashboards, so you can make smart decisions fast. In short, AI helps businesses stay on top of things and stay ahead of the competition.

Also Read: Leveraging AI to Collect Customer Insights in Restaurant Industry

Challenge 3: Data Analytics is Expensive 

Data analysis is an expensive procedure. It includes getting the right necessary tools and software, which often require a considerable initial investment. These tools are quite essential for collecting, storing, and analyzing data, but they don’t come cheap.  

To collect and manage all the data, businesses often need to hire experienced data scientists or consultants who can leverage these tools and get meaningful insights. This adds another layer of expense, as skilled professionals demand high salaries. Together, these costs can add up quickly, making data analytics money-consuming for businesses. 

Solution: AI is Cost-Effective 

Data analytics is expensive. But, AI-powered analytics tools are making data analysis more accessible and cost-effective. Most of the AI tools have subscription-based models and can adjust the plan as per your custom business requirements. 

On top of it. When you have got AI platform at your rescue, they will automate the whole process of data analytics right from data collection and cleaning to transformation, reports, and whatnot. So, when you AI – you don’t even have to hire data analysts, or scientists, which saves your costs. 

With these affordable options, businesses can leverage data analytics to make smarter decisions, stay competitive, and drive growth—without the heavy financial burden that traditional data analysis typically involves.  

Also Read: Cost-Effective AI Solutions For Restaurants

Challenge 4: Inaccurate Data is Disaster for Businesses

In data analytics, nothing can be more hazardous than inaccurate data. If the data intake is incorrect and erroneous, the outcome will never be reliable. One of the most common causes of erroneous data is data input errors, often known as manual errors.

The discrepancy in data is another factor contributing to low-quality data. If your data operator makes changes in one system but forgets to make the same changes in others, the result will be asymmetrical data.

Solution: AI can fix the Data Accuracy Problem 

AI tools are great for fixing the problem of inaccurate data, which can be a big headache for businesses. Instead of relying on manual data entry, which is quite prone to mistakes, AI automates the entire process, ensuring that data is collected accurately from the start. This cuts down on human errors and makes your data more reliable.  

AI also keeps on updating the data by checking for discrepancies across different systems. If a change is made in one system, AI can automatically update the others, so everything stays consistent and up-to-date. This means less risk of messy, unreliable data and more confidence in the insights you get from it.

Also Read: Benefits Of Data-Driven Decision-Making

Challenge 5: The Tech Obstacle

According to one study, an organization’s ability to adapt and evolve is the most significant hurdle to becoming a data-driven corporation. Even when senior management realizes the importance of data analysis, they usually fail to provide adequate assistance to their employees. 

This lack of support can come in many forms, such as insufficient resources, inadequate training, or a failure to foster a data-driven culture. Among the most significant challenges to data analytics are continual pressure and a lack of support from stakeholders and upper-level managers. 

Solution: AI is easy to Incorporate 

AI can help you overcome these problems. Unlike complex traditional systems, AI tools are user-friendly and require minimal technical expertise. Also, they are quite easy to incorporate in the business process, it’s cost-effective – that helps them integrate them into their operations(easily). This makes it easier for top-level managers to adopt these tools and encourage their teams to use them, breaking down barriers to change.

All in all, by making data analytics more accessible and less intimidating, AI empowers organizations to truly embrace a data-driven culture.

Challenge 6: The Data Security 

Businesses concentrate on gathering, comprehending, and evaluating data after realizing its significance. They frequently fail to consider the dangers that could jeopardize the security and privacy of the massive data sets that are gathered.

Security of your company’s data is a must and one of the biggest challenges for companies. If the data isn’t properly protected, it becomes an easy entry point for hackers, leading to breaches that can compromise sensitive customer information, damage your company’s reputation, and result in significant financial losses. It gets tougher, every day because data often flows between multiple sources, systems, and platforms. 

Solution: AI Tools are Secure & Protected 

Every problem has a solution and so does data security. AI tools are very secure, robust, encrypted, and safe, comparatively. It encrypts data and secures data storage – ensuring that sensitive information remains protected at all times.

Also, AI can continuously monitor data traffic, detect unusual patterns, and flag potential security threats in real-time to keep businesses updated and well of course (safe). And, you know the best part – everything is automated. AI automates all these security tasks to reduce the risk of human error and makes it much harder for hackers to find vulnerabilities.  

The one thing is: that you need to make sure you find secure & reliable data with robust security measures. 

Challenge 7: Data Storage & Management 

For companies, data storage and its effective management is a bigger challenge than data collection and analysis. This is the truth. As enterprise companies grow, the data also grows from customer interactions, sales, marketing, supply chains what not. 

So, managing and storing all this data becomes a big challenge. Traditional storage methods, like on-premises servers, can’t keep up with the sheer volume. They’re costly to scale, need constant upkeep, and can slow down as the data piles up. Plus, when data is spread across different locations, it creates silos that make it hard to get a complete view of the business.

Solution: Data Warehouses & AI on the go

Every challenge has a solution. So, the effective solution to store and manage the data is popular data storage systems, such as data lakes and warehouses. It helps companies to gather and maintain massive amounts of unstructured, organized data in its native format.

Also, AI tools can further streamline your data storage and management. It helps businesses automatically organize and categorize data while making it easier to find critical information while storing less-used data more cost-effectively. The right tool also compresses data to save space and integrates various data sources into a single system, eliminating silos.  

So, by using AI alongside data lakes and warehouses, businesses can better manage their data, stay organized, and keep costs down as they grow.

Also Read: How AI Revolutionizes Customer Experience in The Restaurant Industry

Challenge 8: Data Visualization is Difficult 

Data analytics is meaningless for you and your stakeholders unless the numbers convey a story. Ultimately, you are investing time, money, and effort into gathering and processing the data to support your decision-making and achieve your returns on investment. And, for all that – data visualization is quite important.

However, creating these visualizations manually is often challenging and time-consuming. Manually gathering data from different sources, organizing it, and then building charts or graphs that effectively communicate the message can be overwhelming. It requires specialized skills to choose the right visual format, avoid errors, and ensure the visualizations are clear and impactful. 

Solution: AI automates the Data-Visualization 

As you know data visualization is a time-consuming and complex process, AI comes to the rescue and can automate the data visualization process. AI tools can suggest the best chart types, diagrams, and reports from your data, highlight key trends, and update visualizations ireal timeme as new data comes in. This not only saves time and reduces the risk of errors but also makes it easier for businesses to analyze the data seamlessly and make smart decisions. 

Challenge 9: Overcoming Data Silos

Another key challenge that businesses face in data analytics is data silos. There are so many sources and departments within an organization store data separately, making it difficult to share and integrate information across the business. 

This fragmentation creates a mess and leaves businesses hanging in between – unable to get comprehensive data, leading to inefficiencies, duplicate efforts, and missed opportunities for cross-functional insights. 

Solution: AI combines everything in one place

There are so many data sources in business, for sure. But, when you have everything in one place – in a structured and appealing then it will all work out eventually. And, Ai can be your perfect partner for the same. 

It breaks down data silos as it can automatically connect disparate data systems, cleanse and standardize the data, and create a centralized repository that is accessible across the organization. AI enables seamless collaboration, ensures consistency in data usage, and allows all teams to work from the same set of accurate, up-to-date information for data-driven decision-making and seamless collaboration. 

Finding the Best AI platform for Effective Data Analytics is also Difficult. 

Data analytics comes with so many challenges as we have discussed above – right from data silos and integration to data visualization, data visualization, security, and whatnot? 

However, with the right AI data analytics tool with its machine learning and automotive capabilities – businesses can manage it. But among the key challenges is finding the best AI that is made for your business. 

But, with a bit of research, you can find out your way. You need to dig down, and find a reputable vendor that has all the right features, is compliant with your industry, is cost-effective, and can help you with data-driven decision-making. 

To make your search easier – Livelytics has got you covered. It is a one-of-a-kind data platform specifically designed for restaurant, hospitality, salon, and retail businesses. To know more about us and how this platform for your business – you can book a free demo. 

To Conclude 

When we are aware of the challenges, we can deal with them more effectively. Now that you are aware of the problems that companies are facing with data analytics and how to solve them, things become easier. You know what you want to do in order to achieve your desired goals and then you can begin putting those ideas into practice in a more organized manner.

And so you know, none of the difficulties in data analytics are serious enough to prevent you from leveraging the benefits of data analytics for your business. 

Best of luck and as stated above – you can book a free demo to try out Livelytics as well.