Big Data Isn’t Just for Big Business

In my last two posts I’ve been discussing the importance of market research and product innovation for all businesses, not just large corporations, and mentioned how valuable solid customer and competitor data is for both. Normally at this point someone asks: “so what about “Big Data”, do I really have to worry about that ?”, so this is probably a good opportunity to discuss that, before I return to its application to your business intelligence needs in my next post.

What Is Big Data Anyway ?

You could spend hours googling this, but our practical take is this: its the data that is most meaningful for your business because of some high value combination of its naturally substantial size, its evidentiary integrity and its relevance to important decision making. Here are some examples of what I mean:

Large Size – the bigger the data population analysed, the more information to be found and sorted and the less likely that “end of the bell curve” variations, such as that angry midnight e-mail from “Disgruntled of Penrith”, will distort your understanding of your fundamental business drivers and trends.
High Integrity – real data taken directly from external transaction sources, eg through supermarket checkout sales or warehouse purchase orders that they send to suppliers, should always trump vested and potentially conflicted internal opinions (even your own).
High Relevance – information about when and how your products are purchased will matter a great deal to your marketing and logistics strategies, but will be less important for your pricing strategy.
Big Decisions – its inefficient to use Big Data to decide where to hold your company’s Christmas Party, when the only options are that chain Mexican place you went to last year and the harbour cruise that was all booked up.

So here’s some good news: even quite small businesses will generally have access to and good uses for Big Data – whether they use their own, or acquire it from credible sources. But always start by knowing your “why” – after all, your big decisions will ultimately tell you what Big Data you may need and how it might need to be stored and sorted.

Some Big Uses for Big Data

Measures of success – monitoring key performance indicators that relate to your strategies to increase business profitability, health and value. This is especially relevant for someone looking to grow a business rapidly for sale or listing.
Identifying risks and opportunities – when you need to quickly identify trends that could either dilute or increase value, eg when an established product is losing market share or where investing in a new product might help you to win market share or even establish a new category.
Productivity analysis – when you might be able to increase economies of scale and gross margin by increasing production, or alternatively scaling back operations may be required to eliminate unusable and costly excess capacity.
Accountability – focusing on your strategy and goals can be challenging when you are also working hard in the business; having a clear rhythm of business reviews that appropriately leverages your Big Data will help you remain accountable.

In our next post I will pick up on this point by discussing how valuable business intelligence Dashboards built on your Big Data can be, and how to go about creating and using them.

When Should You Start Using Big Data ?

We’ve already explained how useful Big Data is when defining markets and testing products, so there are certainly plenty of reasons to start early in your business journey. Most commonly, however, we find that business owners and leaders typically only embrace Big Data as a business tool when they are a few years along and decisions based on gut feeling and / or “single point” feedback are no longer working, eg when growth slows, competitors are making up ground and you are struggling to understand what might have changed. Does that sound like your story ?

I’m Still Not Sure About Big Data….

Despite all the benefits, many smaller business owners and leaders still fall into the trap of thinking that Big Data is something to be left to the “top end of town”. There are lots of attention seeking touts out there who flood the media with scary jargon and acronyms – often because they are trying to make a quick buck out of fear and confusion. And then if you actually adopt one of the many tech platforms available and see the potentially vast amounts of data related to even one aspect of your business, its all too easy to lose focus, feel even more overwhelmed, and give up making it work for you. But don’t worry about that, you’re certainly not alone.