By Michael Abramow
More and more small-to-medium businesses (SMBs) are implementing cloud-based big data solutions to identify new growth opportunities and make smarter business decisions. A recent report forecasts that big data deployment by SMBs will grow 42 percent by the year 2018.
Historically, these solutions have been prohibitive in terms of complexity and cost. However, current cloud vendor offerings have been significantly simplified and have much lower subscription fees for SMBs that want to start their big data journey. And the benefits are well documented: research says retailers utilizing big data can increase revenues by 24 percent and improve operating margins by more than 60 percent.
Here are a few ways big data can help SMBs:
Recommend organizational changes that will improve recruiting, utilizing, and redeploying resources. Smaller companies can minimize the work of going through multiple job applications and replying on gut feelings when they are hiring by using big data analytics. Machine learning can minimize hiring mistakes by extracting data from social media profiles, online resume databases, and records of employment and by detecting anomalies and discrepancies. Additionally, analytics can help companies identify historical peak periods and coordinate schedules accordingly, improving labor scheduling and reducing costs associated with understaffing or overstaffing.
Track trends in the supply chain to improve business sustainability and growth opportunities. Companies can do better stock forecasting by combining varied datasets such as those with data for point of sale, sales histories, social media, website purchases, weather predictions, and seasonal sales cycles. This allows retailers to hold a lower level of stock, reduce the number of sales lost because of merchandise stock-outs, and calculate the optimum discount required to sell off perishables. Big data can also help companies increase sales by helping them decide which products to carry in specific stores.
Identify potential new customers and growth opportunities. Data on their customers’ age, spending habits, income, and location allows SMBs to provide targeted marketing to people who might have an interest in their products. Consider a company that sells vinyl records and turntables, currently predominantly catering to baby boomers and seniors who grew up listening to records. Big data analysis indicates that millennials in the area have developed a taste for them, so they can target their social media advertisements to that demographic, increasing online and in-store purchases.
Create new products and services, enhance existing ones, and invent entirely new business models. Small startups that can aggregate and analyze data on customers and provide personalized service more quickly have an advantage over slower-moving enterprises. Increased data access enabled by the cloud and publicly available data can also disrupt business and operational models, as we have seen with companies such as Uber and Airbnb.
Your cloud solution should be able to combine data from multiple sources to target the right consumers, personalize their experience, and measure the effectiveness of engagements.”
Strengthen security. Big data can monitor important security metrics such as the number of privileged users and the cadence of security alerts and breaches to help SMBs understand cybersecurity risks. Cloud subscription services use proven big data analytics algorithms to identify malicious or suspicious activity that might impact your business. Small businesses might think they are not at risk, but 43 percent of cyberattacks target small business, with only 14 percent of small businesses rating their ability to mitigate cyber risks, vulnerabilities, and attacks as highly effective. The US National Cyber Security Alliance found that 60 percent of small companies go out of business within six months after a cyberattack.
To take advantage of these valuable opportunities, SMBs need to be strategic about implementing big data platforms. Here are three tips to remember as you begin your journey:
1. Aggregate your data in one data cloud. Ensure that both internal and external data sources across systems, devices, and channels are aggregated onto a single data platform. Also, define what is important to your business and recognize key data sources and metrics so the data service can filter data effectively. Bringing together various data segments will better reveal who your audience members are, what they do, where they go, and what they buy.
2. Ensure the cloud solution can enrich your first-, second-, and third-party data. First-party data is loosely defined as information a company has collected about its audience. Second-party data is somebody else’s first-party data, accessed through trusted partners who are willing to share their customer data. Third-party data is from data aggregators that sell data that can help you understand the market. Your cloud solution should be able to combine data from multiple sources to target the right consumers, personalize their experience, and measure the effectiveness of engagements. Collecting data from various sources and putting it together improves SMBs’ ability to extend their reach to other possible customers and increase sales.
3. Train your internal resources. Companies should initiate training in structuring, organizing, strategizing, and effectively utilizing data tools. They also need to emphasize how data visualization and associated scorecards can be used to raise the awareness of all stakeholders for opportunities, threats, and challenges. Communicate at all levels that having even a basic grasp of this information can help increase business performance, productivity, and profits—and prevent security breaches and fraud.
Within any SMB, many people wear multiple hats. Empower them to view the same data from multiple locations and make data-driven decisions together. This will facilitate a culture in which everybody understands the value of regular data analysis. Big data is all about helping SMBs quickly identify audiences and connect their behavior across devices and platforms so that they can cost-effectively deliver the right message to the right customer—at the right time.
Photography by Nikifor Todorov/Shutterstock.com