We often hear about Big Data when talking about the big giants in the online retail world. But not every small business has the resources of an enterprise-level corporation. Nowadays, it is often argued that businesses that do not invest in Big Data technologies risk getting left behind as the marketplace becomes more and more data-driven. The question arises whether there is value for big data in small businesses. In other words: How can small businesses derive value from their data?
What about Big Data?
Big Data can be defined as huge data that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions. Almost every business that has been operating for more than a year has likely Big Data in their business records. Considering a small online business, it will involve collecting, storing, and processing valuable data (e.g. customer data, visitor data, product data) to optimize offers, customers processes and predictions that will favour the online business.
How to start?
To gather valuable customer insights, small businesses have to look at their older data resources. Not all of these archives might be available digital format, but non-digital formats are also needed. Furthermore, a business needs to decide on the benefits they would like to achieve with Big Data. For instance, do you want to gather valuable customer insights or rather save time and improve employee performance.
In order to act on data-derived insights, small businesses need to define the problem they would like to resolve. It has to be noted that small businesses are required to look at some smaller complications and focus on specific problems rather than general problems. Following their specific problems, small businesses should decide on the needed features of their Big Data self-service tools. Features may include data visualization, integration of data sources, dashboards or support for collaboration. By utilizing Big Data tools, with the features needed, small businesses can gain competitive advantage in the fast-paced modern market.
Advantages for everyone?
The advantage of small business’ agility enables them to act rapidly and efficiently on new data-derived insights, which is not always the case for the big businesses. Besides this size advantage, Big data driven tools are becoming more affordable and available than before. Being small is no longer limitation to obtain market and business intelligence. As Big Data becomes accessible to everyone, I do believe that the maturity phase of a business has to be taken into consideration. If a small online business size retailer just has hundred visitors a day, personalized offering as result of Big Data tools will not result in a considerable increase in turnover. Small businesses have to be realistic and search for specific tools that will help them to become big.
Sources:
– https://www.forbes.com/sites/forbestechcouncil/2016/07/08/how-to-invest-in-a-big-data-platform/#297bd12c7f53
– http://bigdata-madesimple.com/why-small-businesses-need-big-data-more-than-ever/
– https://www.business2community.com/business-intelligence/bi-for-small-business-getting-your-data-to-work-for-you-02115020
– https://www.businessnewsdaily.com/6358-big-data-solutions.html
Hello Nina,
first of all thank you for your interesting blog post. It was a nice read on a very relevant topic.
With regards to the quality of data available to most small businesses, I agree with you that most businesses do not have decades of relevant data at there disposal and the less quality the data has for your Big Data Analysis, the less quality the recommendations of the analysis will have. However, there is a way out for those businesses lacking big data sets. In recent years, with the emerging data democratization, there have been increasing vendors that are selling or publishing large data pools, for everyone to use. For Example http://www.kaggle.com is an exchange platform for all sorts of large data sets, that for be bases of Big Data Analysis. Obviously, you might not find a data set that is suited for the type of analysis that you want to run, but in many instances, this can give small enterprises a place to start with their projects and a foundation of data, on which they can build with their own data, that they gather thought more recent years or during a pilot phase.
With regards to the benefits, that small companies can derive from Big Data, I believe it is crucial to mention the findings of an article published in the Harvard Business Review in 2013 “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail”, where the author states that: “Technology is
just a resource, and only when people transform resources into products or services, value is
created for organisations”. Keeping this in mind, even with new Big Data solutions (e.g. from Amazon or Google) there is still the need for an analyst, to derive actionable intelligence from the data and equally important to ensure that the business is organised in a way, that allows for the efficient use of Big Data. Finding qualified personnel is often very difficult for small companies, since there is a very high demand and they are often competing with much larger and resourceful companies. Rising, Kristensen and Hansen argue in their paper “Is big data too big for SMEs?” (2014), that in most cases it is necessary for SMEs to set up a cross-functional team to derive the most value from Big Data analysis, a task that might often be too much for small companies, since the employees are needed in another capacity.
Overall, my impression is that SMEs have to be even more careful than larger companies when they think about their Big Data Strategy. Nevertheless, with publicly available data sets, a more tech-savvy generation coming into the working place and extensive free available online learning resources, I think that there is still a way, how SMEs can successfully reap the benefits from Big Data Analytics.
References:
Rising, Kristensen & Hansen (2014); “Is Big Data too Big for SMEs?”; https://web.stanford.edu/class/msande238/projects/2014/GainIT.pdf
Christensen (2013); “The Innovator’s Dilemma: When New Technologies Case Great Firms to Fail”; https://hbr.org/product/the-innovators-dilemma-when-new-technologies-cause-great-firms-to-fail/1196XE-KND-ENG