A Good Time for Small Businesses to Embrace Big Data
Start small and slowly. Focus on a few key items first. Build a dedicated team.
From 2005 to 2020, the digital universe will grow by a factor of 300. In fact, it is estimated that we would have generated 40,000 exabytes, or 40 trillion gigabytes (GB), of data by 2020. According to IDC’s The Digital Universe in 2020 : Big Data, Bigger Digital Shadows and the Biggest Growth in the Far East Report, which was published at the end of 2012, this is equivalent to 5,200 GB of data for every human on earth. In other words, we are seeing an explosion of the digital universe.
Get the steps required to implement a Data Quality Management process
Does it make it difficult for you to comprehend how much data is produced every day?
Do you know just how little of it is really being put to use?
It is also common for small business owners and management within SMEs to think that big data means ‘big cost’ or ‘big business.’
This creates a vast blue ocean of opportunities for enterprises, including small and medium-sized enterprises (SMEs), to tap into and elevate their current hold in their respective marketplaces.
Many SMEs currently lack staff with the right skillsets to fully leverage big data and analytics. It is also common for small business owners and management within SMEs to think that big data means ‘big cost’ or ‘big business.’ As a result, many are hesitant to explore big data initiatives simply because they believe that it requires a major investment in hardware and software.
Big Opportunities Abound with Big Data
If you think about it, you will realise that every company began as a start-up. The success of Amazon is a clear showcase of the power of big data and how data can be tapped into in order to transform a small start-up into a massive industry disrupter and market leader.
Consider the changes that resulted when bookstores moved online. Traditional bookstores used to track inventory. They looked at books that were being stocked, what was moving off the shelves and what the best sellers were. But things changed when retail moved online. Online bookstores can now see exactly what each customer is buying, how often they are buying, and even how they prefer to pay.
By leveraging data, Amazon could track what customers bought. But they could also :-
- see what they showed interest in;
- how they navigated the web page;
- how individuals reacted to promotions and similarities across different segments; and
- later on, Amazon developed algorithms to predict which books an individual customer was most likely to buy next.
With this, Amazon transformed the traditional brick-and-mortar retailer into a data-driven e-commerce giant.
Digital footprints of customers have, for some time now, been revealing purchase patterns, preferences and interests, allowing businesses to implement more insight-driven tactics when engaging them. Suddenly, we are in an era where customer profiles are much clearer and more detailed. This is a new era of customer understanding. Just like the data, the opportunities are exploding too.
You Can Start Small with Big Data
Even though the opportunity is huge, SMEs can start by taking baby steps towards leveraging big data.
i) A focused effort
They can concentrate their efforts and dive deep into a few business critical sets of data. For example, sales in a specific sector, or performance metrics during peak versus low seasons. This will definitely yield quicker and better results than trying to take on too much, too soon.
ii) Put a small team in place
SMEs may also consider creating a small interdisciplinary team to experiment with extracting business value from data instead of limiting it to skilled but isolated individuals such as those in the IT department.
In fact, to make things easier and more accessible, these days SMEs have much better access to the latest technology as competition continues to drive prices down and hardware becomes more of a commodity. Furthermore, software, services and even infrastructure can now be delivered over the cloud, making them even more attainable and scalable.
SMEs can now start small and face less of a constraint when adopting new technologies.
As the 2014 Stanford University Report, Is Big Data too Big for SMEs? MS&E-238: Leading Trends in Information Technology outlines, cloud-delivered infrastructure can help SMEs to take advantage of more sophisticated IT operations, which would not have been accessible for them due to high costs of operations and up-front investments. SMEs can now start small and face less of a constraint when adopting new technologies.
Think big (data) now
Interestingly, several forward-looking SMEs are already seeing big data as something more than just a buzz phrase. They are already harnessing the power of analytics to gain insights into business trends, make market projections, understand customer behavior and more. Big data and analytics are allowing these SMEs to run more efficiently and become more competitive.
As exemplified earlier by the Amazon story, many successful smaller companies have already shown how data and insightful analytics have created unimaginable business opportunities.
Moving forward, big data will become an integral part of almost every industry. Applications that are essential to managing data are only going to become more accessible, affordable and user-friendly. It is certainly going to be easier for smaller firms to tap into big data and achieve bigger results. Nevertheless, those that start to embrace big data and analytics now will benefit most in the future.
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Headline image courtesy Wilfred Iven of stocksnap.io
This article was originally published by the author on LinkedIn. It has been edited and reformatted here to eliminate product promotion.