Data analysis isn't just for corporations. Small businesses can benefit from big-data technology, too.
Big-data technology is quickly transforming nearly every industry by providing actionable business information. Because of its effectiveness, even business leaders who are generally slow to adopt new technology are curious about how they can use big-data technology.
Businesses of all sizes – even small ones – want in on big-data analytics, and there's a good reason for it: Companies that leverage big-data analytics tools enjoy 15% more sales than companies that do not, according to the Georgia Small Business Development Center.
Even though the U.S. economy is expanding at a rate of less than 3% each year, businesses of all sizes are capturing vital market share by leveraging big-data analysis.
What is big data?
"Big data" is the term used to describe large volumes of data that a business creates as a part of its normal operating procedures. This data is categorized as structured if it is highly organized and easily searchable, and unstructured if it is raw, unorganized and more difficult to collect, process and interpret.
Importance of big data for businesses
Here are some of the ways businesses can use big data to gain an edge over their competitors:
- Reduce costs
- Increase efficiency
- Identify weaknesses and failures
- Design new products and services
- Conduct 360-degree customer reviews
- Identify and prevent fraud
- Increase operational efficiency
- Optimize pricing strategies
- Make smarter business decisions
How can small businesses use big data?
Nearly 51% of small business owners believe that big-data analysis is a must, but only 45% perform data analyses, according to a report published by the Service Corps of Retired Executives (SCORE). Furthermore, 73% of small business owners said that finding new customers is a top priority, while 63% rank retaining existing customers as a top issue.
Data analyses can help small business owners meet their goals. Many business owners believe that they don't have time to track analytics, but it takes only a few moments of studying to learn how to use data to gain a competitive advantage. You probably already have more than enough information to start a big-data initiative without even realizing it. For instance, you can source information for data analysis from the following places:
- Email marketing reports
- Sales receipts
- Social media analytics
- Website analytics
- Streaming data from connected devices
- Publicly available data
- Data lakes
SCORE's report revealed that the use of analytics increases return on investment (ROI) in marketing initiatives, in part because business owners who use data analytics eventually realize that they need to take good care of their customers if they want to retain them.
You don't need to spend a lot to add data analysis to your marketing initiatives. In fact, many analytics tools are free, such as those associated with social media business accounts.
Furthermore, you can review analytics information whenever and wherever it's convenient to do so. Today, top social media platforms and other data analytics tools enable you to access reports right on your smartphone via convenient mobile apps.
What questions should you ask to get the most out of your data?
To get the most out of your data analysis, you need to ask the right questions. It's nice to keep track of information such as sales, customer retention and gross revenue. However, these are vanity metrics. In other words, outside of goal setting, they do little more than boost your ego.
In addition to tracking these metrics, you must ask insightful questions. For example, which vendors offer the most value, and which product lines need the most improvement? Then, review the granular details that reveal the consequences of your current operational practices.
If you have yet to perform any data analyses, you may worry that you don't have enough information to analyze. A more likely scenario, however, is that you have more information than you can handle. As the amount of information that businesses and people generate expands, big-data systems grow increasingly relevant.
Today, most business owners can't hope to acquire any meaningful insight by reviewing data manually. However, you may have to start your information analysis by manually integrating data sets into your system.
How do you analyze the data?
There's a reason it's called "big data": Data analysis involves evaluating a massive amount of information. As such, it's essential to use the right tools and methods for your data analyses.
Nontechnical staff may be able to glean some limited insight from data analyses. However, you need the expertise of a specialist to extract full value from your data sets. If a full-time analyst isn't in the budget, considering hiring a consultant who can point you in the right direction.
Furthermore, you need more than statistical summaries of your data analyses; you also have to understand what's causing the patterns in your data. A practical analysis will tell you just that. However, it's even more important to understand why the patterns occur.
You also need to know what may happen in the future and how you can act on that information. Technologies such as predictive and prescriptive analytics can help you to uncover insights that may reveal the future of your business environment.Big data tools
One way to uncover much of this information is by using real-time analytics. This type of data analysis provides decision makers with critical insights in real time and on demand via an executive dashboard.
An executive dashboard eliminates the need to consult an IT specialist for a report, and many of these dashboards allow small businesses to access information on demand. When you can access vital information via smartphone, laptop or any other connected device, you and your team can get current, actionable data that enables you to outdo the competition. Furthermore, you can use an executive dashboard to corral disparate data sources into one dynamic display.
Even if your business is small, you probably generate more than enough information to take advantage of big-data systems. For example, your business probably has a ton of spreadsheets, databases and customer relationship management tools that are packed with information. You can use these data sources in combination with commercially available data sets and free tools such as Google Analytics.
In addition to real-time-analytics dashboards, small businesses have a variety of big-data tools to choose from. Here are some common big-data solutions for small businesses:
SAS: Developed by the SAS Institute, this software suite can mine, manage, retrieve and alter data from different sources – such as web, social media and marketing analytics – depending on the specific needs of the business. Once the data is acquired, SAS performs a statistical analysis to provide customer intelligence to small and midsize businesses.
ClearStory Data: ClearStory Data combines a business's internal data with publicly available data to help leaders make better decisions for their organization. Businesses can use ClearStory Data to gain insight into specific departments, such as sales, marketing and customer analytics.
Kissmetrics: Designed to help businesses increase the ROI on their marketing efforts, Kissmetrics identifies customers' behaviors so you can understand, segment and effectively engage your customers.
InsightSquared: InsightSquared connects the business software you already use to automatically collect data and generate actionable insights. The platform can connect with Salesforce, Google Analytics, QuickBooks, Zendesk and more to provide marketing, staffing and sales analytics.
- Watson Analytics: IBM's Watson Analytics makes advanced, predictive business analytics that are accessible to small business owners who may not have experience with data science. The platform can integrate a vast data set from multiple departments – including sales, finance, marketing and human resources – and identify patterns and potential problems.
How do you present the data after it's been analyzed?
Once you've analyzed your data, you need to present it in a way that nontechnical personnel can understand and use to make informed decisions. Accordingly, you must investigate data visualization tools that will work with your current technologies.
Of course, you can use trusted productivity tools, such as Microsoft Excel and Microsoft PowerPoint, to create presentations, but those programs are very limited. Alternatively, you can use an interactive executive dashboard, which allows you to present visually compelling presentations and enables stakeholders of all technical skill levels to engage with information quickly.
There are many free and open-source big-data tools that you can use to launch your company's business intelligence initiative. By choosing the right business intelligence tools, you can level the playing field in a highly competitive marketplace and make well-informed, on-the-spot decisions that can lead your organization toward success.
Additional reporting by Sean Peek.