The Bernard Marr column: How small businesses can get started with big data
Big data might seem like it’s something that only big business can make use of. When people first hear that massive volumes of information are being used to fight terrorism, cure cancer or predict the spread of Ebola, it sounds expensive, difficult and time-consuming. But that doesn’t have to be the case.
Huge datasets on everything from demographics to weather and consumer spending habits are freely available online – if you know where to look. Plus, the basic tools to make sense of the data are also free and becoming increasingly simple for anyone to use.
At its most basic, anyone who is using Google’s Adwords to track what their customers are searching for online (as most businesses surely are by now) is engaging in big data analysis, often without even knowing it.
However, too often big data analysis is being done in an infrequent, unstructured or ad-hoc way. Without an underlying strategy, you may occasionally get lucky and stumble across a valuable insight. But with proper planning and preparation, insights will pop up with far more predictable regularity.
Big data presents opportunities for small business
In many ways, big data is suited to small business in ways that it never was for big business – even the most potent insights are valueless if your business is not agile enough to act on them in a timely fashion. Small businesses generally have the advantage of agility, making it perfectly suited to act on data-derived insights with speed and efficiency.
As Duncan Ross, director of data science at analytics service provider Teradata told the BBC in an interview (external link): “Big data presents many business opportunities. But you have to be prepared to pivot and follow where the data – and the money – takes you.”
It isn’t just the high-tech arena that can benefit either – companies offering traditional trades and services have just as much to gain as Silicon Valley start-ups by harnessing data analysis.
Great customer insight
Food delivery outlets, in recent years, have been quick to jump on board the Just Eat and Hungry House bandwagons. Apps which allow customers to order food straight from their smartphones to their homes also allow businesses ready access to that pool of customers.
They also provide valuable metrics, such as how far away their average customer lives, how much they spend, and what time of day they like to eat.
Small businesses can take advantage of large, public data sets to glean change-driving insights. For example, taxi firms could use flight and weather information to plan where their resources are needed, or a dog walking service could use social to identify pockets of potential customers in their vicinity.
Social media as a science
Social media is, of course, an obvious and potent source of data for any small business.
All of the big platforms offer targeted advertising, allowing you to precisely target the age groups and geographical areas where your products and services will sell. But even without spending a penny they can be used to see who is talking about what – and determine how that is likely to affect demand for products or services.
An application called Roambi (external link) has become increasingly popular with small and medium sized companies.
Realising that many small businesses are used to storing data in a decentralised fashion (with, say, accounts, HR and marketing all compiling their own databases), Roambi and similar services provide smartphone-based platforms allowing everything to be brought together, queried and reported to staff who can put it to good use.
Utilising data as an insight for your strategy
Many bigger businesses have made helping out smaller businesses with their data issues part of their own strategy. Amazon, Google, Facebook, Microsoft, IBM etc., in recent years, have all heavily pushed their big data services, designed to let others profit from the data and infrastructure they have collected and built (for a price, of course).
Whether you’re intending to build an entire data infrastructure of your own information, or you simply take advantage of the ever-increasing number of ready-made analytics apps which tap into public or shared datasets – what really matters is that you integrate data analysis into your operations in an intelligent way.
As I’ve written before, I prefer the term 'smart data' to 'big data'. I’ve already covered what I term the SMART data principle, but to briefly recap – the steps towards implementing and profiting from a strategic approach to analysing data in business are:
o Start with a strategy
o Measure metrics and data
o Apply analytics
o Report results
o Transform your business
Data analysis can lead to big things for small business
Implementing a data strategy in an intelligent, structured way is what differentiates a big data-driven enterprise from one that is simply using data on an ad-hoc basis. And the basics are no different for a small, agile and growing company than they are for the tech industry giants who have been using big data for years.
Whether you’re planning on building a team of analysts or simply making the most of what your iPhone tells you about your Google Adwords and social reach, it’s important to know what you’re trying to achieve and why.
Do you want to increase sales? Make your customers more satisfied? Or retain staff for longer? The questions you are hoping your data will answer are just as important as the answers themselves – so make sure you are very clear about what questions you need answers to before you start.
After all, most small companies don’t want to stay small, right? Data analysis can lead to big things for small business – but it’s much more likely to happen if you go about it in a smart way.
Bernard Marr’s latest book “Big Data: Using SMART Big Data, Analytics and Metrics To Make Better Decisions and Improve Performance (external link)” discusses how any business can create a big data strategy.
For further insights, read Bernard’s previous column on why big data matters to every business.
At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.