By Jasmine Morgan
In the last few years, Big Data has become more than a buzzword, it is an industry that will surpass $57 billion in 2017 and will continue to rise by about 10% yearly until 2020. Yet, it is still intimidating territory for small companies. This is due to technological limitations and budgetary constraints, as well as due to the misperception that it is only meant for large corporations, which have both the means and scope to sustain such a high-end tool. The reality is that if the problems to be solved are well defined, big data could be cheaper and more accessible than your bookkeeper.
There are a few well-known stories, and we are going to focus on three of them to highlight the way Big Data can make a difference for small companies.
This online lunchbox delivery business has been operating in the UK since 2008 and in the US as of 2013. They have embraced analytics so much that it became a strategy. “DARWIN” (Decision Algorithm Rating What Ingredients Next) helps them decide what options to present to customers. This algorithm is the mastermind behind the company’s development of their own recipes. Their idea to shelf time is 24-48 hours. At 15,000 reviews per hour, they have no shortage of feedback or data, but they act quickly and are even known to withdraw a full range of underperforming snacks.
Point Defiance Zoo & Aquarium
Big Data strategies can benefit more than online businesses. Brick and mortar companies can leverage it as well, including non-tech companies, like a zoo. The combined analysis of visit statistics and weather reports powered by IBM helped the management predict the attendance rates and the staffing needs very accurately as well as create promotions.
This chocolatier with locations across the UK also has a chocolate tasting club which uses the reviews of 70,000 members each month. The data they collect not only allows them to understand what customers want but helps them create accurate profiles of clients. They can use such insights to create a small catalog of high return products, knowing they will be a hit.
From SMART goals to SMART data
Most managers are accustomed to the SMART framework (specific, measurable, actionable, realistic, time-bounded) for their goals. A similar approach can be described for dealing with data. Just this time the acronym stands for strategy, measurement, analytics, results and transform.
It’s important to remember that Big Data is a set of tools and they can only be useful if used for the right purpose. The strategy design part is paramount for the success of such a project, you need to have a clear list of business questions that you hope to answer through Big Data.
If you are unsure about the quality and suitability of the data you already have and that you intend to collect, the best idea is to ask for additional instructions from specialists. Big data consulting services from InData Labs, for example, include an assessment of capacities and necessities, defining priorities and constructing infrastructure for data gathering and analysis.
Analysis & Results
Once you have validated the data sources, quality and architecture, it is time to start the analysis and correlations with business results. Small companies can get a lot of insight from natural language processing and sentiment analysis from social media. The organization needs to understand customers and follow them through the sales funnel to identify potential drop-off points.
For companies dealing with resource levels (from oil extraction to vending machines), attaching sensors and getting data through IoT can save money and be a game changer in operations management.
The last and most important step is the transformation of the company from ad-hoc to data driven. This is more a mentality change than an operational shift. Staff members and management need to see this new way of working as an expression of a natural technical advancement.
Big Data sounds like big spending. For Amazon or similar companies which have a dedicated in-house team of data scientists and data engineers, that is true but it should not be like that for small companies. Right now, there are numerous options for Big Data as a service, with pay-per-use fees that are accessible.
There are also enough free options if you are just getting started. For companies with a website, the Google Analytics suite should be the cornerstone of their online presence evaluation and a good starting point to understand clients and business challenges. It can describe the average customer, lead to new target groups or highlight a glitch in the web design that is scaring away users.
For a more detailed analysis, focusing on individual metrics set as previously described, you can use a package from a specialized company that is tailored to your needs. You get access to Amazon-style technology, for a cost proportional to your size and scope.
Small companies sometimes worry about the quality and quantity of their data, as they compare their recordings to those of established corporations and feel they come in short. However, this is not true. Even records from one year of sales, combined with data from the company’s website and CCTV cameras from brick and mortar locations can act as enough training sets for a well-defined problem. As seen from the zoo example, if these are not sufficient, they can be combined with readily available demographic data from census offices, weather reports or stock market information to name just a few.
The competitive advantage
Small organizations have a great advantage on their side. Size, if used correctly, means agility and the ability to react to changes in a matter of hours or days. Not being tethered by complex corporate processes gives small companies the chance to implement the changes dictated by Big Data trends, immediately. This may be the difference between survival and bankruptcy.
The most appropriate comparison would be between a straw hut and a stone bridge. If you know a storm is coming, the bridge can’t do much, but won’t be too affected either, while if you own the hut, you could easily relocate it to a safer area.
Jasmine Morgan is a senior BI/DW specialist with 8+ years in software consulting. Since 2013, her advanced focus is IT solutions for financial sector.