‘Big data’ conjures images of huge quantities of information being crunched by only the largest conglomerates and multinational corporations.
In reality, the extraction of trends, patterns and insights from analysis of vast amounts of data is something that can benefit and boost the performance of small companies as well as large ones. However, identifying the right data to crunch and choosing the most appropriate tools are key to extracting the maximum advantage from this trend that is sweeping businesses worldwide.
Despite this obvious opportunity, SMEs appear slow in realising it. For example, a recent study from market intelligence firm SAS, Big Data Analytics: Adoption and Employment Trends, estimated that big data analytics is being used by under 0.2 percent of UK SMEs, with a fifth of all businesses admitting to having little understanding of the systems.
Yet a number of reports, such as one earlier this year from the Economist Intelligence Unit, have revealed a strong link between the effective use of big data and an improvement in the financial performance of businesses.
Probably the starting point for growth companies looking to capitalise on big data, is not to start frantically analysing all the data they receive – we are in a world that generates five exabytes of data every two days, so being focused is key.
Vital is to identify what the company is hoping to achieve, what are the goals that the company is looking to fulfil and how analysing data can support these ambitions. In this way, from the beginning the right type of data will be identified and analysed.
The approach to big data for SMEs should be business-led, helping the decision makers to understand such factors as customer needs, monitor online behaviour and manage budgets.
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For instance, one leading UK women’s wear retailer wanted to expand its stores across the UK. It used data from customer profiles and geo-demographic data from a leading global information provider to help inform its store roll-out strategy to ensure its new stores were in the most beneficial locations.
Similarly a leading seafood restaurant was keen to boost its margins, which were highest on fresh fish, so it analysed its customer payments data to identify which customers were the biggest consumers of its fresh produce and targeted them, as part of the restaurant’s marketing strategy, to advise them when the next big batch of fresh fish would be served.
Although big data tools can have a significant impact on the performance of SMEs, ‘small data’ should not be ignored. For example, smaller data sets born out of social media, online marketing programmes and CRM platforms can also shed light on consumer behaviour patterns as well as market trends.
As a first step, small businesses would be well advised to focus on smaller, critical sets of data in sectors that are of particular relevance. This way, companies can gradually expand the level of data that is being analysed, ensuring that it remains relevant and that costs on analysing the data do not spiral.
Once the right type of data has been identified then it’s important to use the right analytical tools. Smaller companies have an advantage over big businesses in this area as they typically have more flexible IT infrastructures, which enables systems and tools used to be changed, updated, adapted and adopted more easily. This is important, as tools to analyse data are constantly evolving.
Some SMEs are already running big data technology, such as MongoDB and NoSQL databases. Also SMEs can benefit from the ever broadening range of more inexpensive tools that are emerging to analyse data, in addition to Google Analytics, such as Kaggle, Swipley and Tableau, which all help SMEs to crunch data to help boost performance.
With more and more studies linking the appropriate use of big data to financial performance and the economic upturn giving rise to greater market opportunities but also stiffer competition, the timing could not be better for small businesses to invest in value-driving big data solutions to help them emerge as winners in their sectors.