Often when small businesses hear the buzzword Big Data they think of large corporations with rich analytics teams.
But there’s a vast amount of data that small businesses have within their own organizations that they, too, can harness provided they learn to organize and optimize that data to their advantage, say experts.
“Small and medium-sized enterprises that do more with analytics deliver proportionately better business outcomes,” says Alan Duncan, vice president for data and analytics strategy at Stamford, Connecticut-based Gartner Inc., a global research and advisory firm.
Still, small businesses can feel overwhelmed at developing a data strategy.
But they shouldn’t, says Duncan, noting it’s key to at least get started and “not to get hung up on the phrase 'Big Data.' ”
That term’s “effectively meaningless,” he says, noting that it's more about seeing how you can harness your data using analytics.
To start, businesses should pick a small pilot project in an area where they think “there’s an opportunity to do something better,” he says.
Think of a question to examine. It might be something like determining the characteristics of a highly profitable customer vs. one that costs you money, he says.
The next step is looking at what data you have that might help answer that question and then finding tools to help collect/optimize that data, says Duncan.
“There’s a ton of business intelligence tools out there nowadays,” says Manav Bhasin, managing director at SVAM International in Great Neck, an IT services provider.
Many work with existing popular tools like Excel, such as Tableau data visualization software, which takes data from Excel and organizes it into a visual dashboard, he says.
Oftentimes companies may not even realize all the valuable data they have, says Joel Lanz, assistant visiting professor at the School of Business at SUNY Old Westbury and a Jericho-based CPA focusing on information security management.
The data may be used or stored outside of where executives (IT or CFO) thinks it’s stored, he says. For example, a marketing executive extracts data from a core system and provides it to an outside consultant for marketing analysis unbeknownst to others, says Lanz.
So they need to take inventory of all data and where it resides – whether inside or outside the company, he says.
They also need to audit their current data resources and capabilities including their team, says John-David McKee, CEO of Greenville, SC-based Ins & Outs, a data-driven strategy and predictive analytics company.
It also helps appointing a project lead -- someone with strategic access, insight and influence, he says.
But first you need to define the key business question and goal of what you’re hoping to accomplish, says McKee.
That starts with leadership asking the right questions, he says.
To be sure, “CEO’s have a hunch of how they think they’re doing,” says Bhasin.
“What are the things keeping you up at night and let’s build a data strategy around those,” he says.
Pinpoint specifically the metrics you want to capture, he says.
For example, a restaurant may ask ‘are my customers happy’ and the analytical way they may want to determine that is through the percentage of tips over time (i.e. anything 20 percent or above means they had a good experience), says Lanz.
You may or may not have the tools internally to answer that question, says Lanz.
Tyler Roye, CEO of eGifter, a Huntington-based gift card platform and e-commerce company, needed to bring in outside resources to help with their data initiative.
“We needed both internal resources dedicated to it as well as outside consultants,” he says.
The firm recently completed an 18-month data project that included putting all its data in an Amazon Cloud-hosted data warehouse so it was centralized and then adding a business intelligence dashboarding tool to get timely insights, generate reports, etc., says Roye.
“The business intelligence not only helps us ensure things are working as expected but also give us insights we use to make adjustments,” he says.
“Small and medium-sized enterprises that do more with analytics deliver proportionately better business outcomes,” says Alan Duncan, vice president for data and analytics strategy at Gartner Inc.