Small firms need to start small with big data
Big data, and the plethora of facts and figures accumulated en-masse in everyday life, can seem impossibly daunting to most small firms. They worry it needs a hyper-expensive super-computer, like the huge machine in the film ‘Billion Dollar Brain’ whirring away day and night, crunching data with complex algorithms monitored by banks of data nerds. But it needn’t be like that at all. Big data is an ocean of potentially useful information, and you can start by dipping your toe in.
‘Big data analytics is the process of examining large data sets containing a variety of data types – i.e. big data – to uncover hidden patterns, unknown correlations, market trends, customer preferences and other useful business information’ according to an article on TechTarget. (external link)
Find out where your big data is hidden
For starters, why not take a fresh look at your own big data? So much information that could be used to improve a company’s performance is trapped within the business itself – stored in spreadsheets on people’s laptops and PCs, or worse still locked away in filing cabinets and on dusty shelves.
For example, a company’s leader can glean plenty of valuable insights on business performance, from changes in its operating costs to its average sale size, by simply comparing the firm’s profit and loss accounts in the past five years. Bringing to the surface the mass of information from within your current systems can often pay large dividends.
Every electronic gadget and gizmo used in your business can also provide a wealth of information that can help sharpen your business’s performance. Most of them are storing data whether you realise it or not. For instance, a modern telephone system is a potential goldmine of customer-service data, such as the average length of sales calls made by your team, how often your key clients are contacted, and even simple things like how long it takes to answer the telephones.
But data is often useless on its own. Like all other valuable commodities it needs to be refined to become valuable information, and that requires a strategy on how to collect and analyse it, and then to share the right type of information that it produces.
That usually starts with the boss asking: ‘What do I want my team to know? How can data help me to find that out? And where is that data accumulated?’. However, as with so many modern-day business situations, does the boss know what’s possible and realistic? ‘The goal is to turn data into information and information into insight,’ as the former HP boss Carly Fiorina said.
To be effective, every company needs a senior person who is responsible for data. As I’ve said in the past, that person needn’t be a tech expert. It just needs to be someone who understands the importance of data to a business and part of whose day-to-day job is to oversee its collection, security, analysis, and distribution to the people who need it and can act on it.
Big data for small businesses
But what relevance does big data, in terms of the masses of publicly available information on the internet, have for small businesses?
We’re living in the big data era – and we are within the sprawl of it whether we like it or not. Small firms shouldn’t think they are somehow able to opt out of big data. If your company is part of a supply chain, providing goods and services to large corporates then you can bet your bottom dollar that they are using these analytical approaches to delve into your performance and compare it to your competitors – historically and continuously in real time.
So, if it’s likely that big data is already being done to you, without your knowledge or consent, it’s in your interests to understand it and to do it for yourself, so you have some idea of what it’s saying about your business. And it’s relatively easy to start using it.
As an elementary example, a quick social media search may offer you a snapshot of how your company is viewed, and how your service and prices compares to your competitors.
And using Google Analytics can help you to understand how, where and when visitors use your website.
In theory, it should be much easier for small businesses to use big data. For a large company the challenge of crunching the data on millions of transactions to find useful insights is much greater than for a small business handling hundreds of online sales. A small company should be able to act on those insights much quicker too.
Once you start using data analytics (often known as Business Intelligence) you’ll start to understand the enormous potential it has to help every business sharpen performance. The more you crunch the data, the more you’ll want to do it. Big data offers big opportunities in today’s information age – even for small businesses.