4 Tips For A Big Data Strategy For Small Businesses

Gepubliceerd op 13 juli 2020 om 14:42

Big data strategy for small businesses should incorporate and exploit analytics to reveal business trends and make decisions. It should be made with agility in its approach, starting with a small hypothesis, involving the team and using smart data sources and tools.

Let's admit it - Big Data is overhyped. It has been reiterated countless times in scientific and business publications and promises the moon: uncovering hidden patterns of customer behavior, predicting KPIs, helping to plan budgets. However, all the steam coming out of the Big Data hype machine seems to be obscuring the truth: big data is useful only if we are able to use it as an aid in everyday business operations. That means that big data is a tool, not a solution to your business issues or setbacks. It can be used to effectively draw attention to some operational concerns that were not seen before, or to compile all those datasets dispersed throughout the company into one single place, to get a neat overview.

A company might take on data scientists, invest in enhanced servers, use sophisticated analytics and data mining applications to crunch lots of different types of data, then, send it to an external hi-tech data warehouse, where complex algorithms will process the results and display it in detailed reports. In fact, such a scenario is put into practice only in big, well-funded enterprises. For smaller companies, it's too much of an effort and similar results can be achieved using much less complicated procedures. You don't have to outsource a cloud-based solution for your small business, the main point we want to emphasize is the different approach of gathering all those data in big enterprises, and small businesses, to get a holistic view on what big data can do for your company.

But the volume of big data for small businesses is only a fracture of what big companies have to deal with. Moreover, the data small business accumulates is usually more structured and have easier to crunch formats. By no means, you should avoid analyzing this data as it gives valuable insights and is easier to access than you think. With new business insights, you could improve your strategy and capitalize on big data. That means that all your operations can be accessed from one single place, and you don't have to additionally spend time on different kinds of reports or spend more money into additional business resources to get a clear view on your business management decision-making process .

Here are our tips, in more detail, on how to make it work in practice.

 

1. Start small

When you perceive your data as a huge pool with new information flowing in every day, this might be intimidating indeed. However, start to view your data not as an overwhelming mass but as a collection of answers to specific questions. Approach it already with a question or a hypothesis in mind and check if the data gathered confirms your assumption. In this case, you will also avoid the hassle that arises when more people look at the same results but each of them interprets them in a different way. This happens when you approach the analysis without a strategy which can cost you a lot of money, time and stress. So first start with a singular question, go through easily available data and if you arrive at a positive answer, you might use it as a first step to more advanced research. For example, you might want to know how to increase your revenue and net profit. Let's see this through the financial point of view.

 

If you gather all your financial points of interest into one single view, it is easy to spot every operational expense and see where the majority of costs will be concentrated. On this dashboard template, the performance of a company is centered around 4 important financial indicators: the Gross Profit Margin, Opex Ratio, Operating Profit Margin, and Net Profit Margin. The Opex Ratio refers to the operational costs that a company incurs as a result of performing its normal business operations. We see in the chart that the trend of earnings is on its growth path, meaning, you can easily conclude that the company is in a healthy and stable financial condition.

When comparing these financial KPIs over different departments or industries (as mentioned before, every dashboard can be adjusted according to the specific needs of a company), the figures might significantly change. Nevertheless, this template can perform a succinct overview of the most important indicators when evaluating the financial situation of a company.  

2. Be agile

Contrary to what you may think, it's the big corporations that are impaired when it comes acting fast. They might be better funded and have more data experts, but even the best IT guys can get tangled in red tape. While a huge company may need five approvals from a CEO, official e-mails and team meetings to get any change through, you can already start leveraging insights from big data in small business. Big data gives insights into real-time data, and when you are able to make changes immediately, right at the point when you see that a certain trend is emerging, then it's you who have the competitive advantage. You will whisk away the customers without the bigger company even noticing. By implementing the performance of your company into a simple interactive dashboard, your small BI operations will change its swiftness,

3. Involve all your team

If your team is of smaller or bigger size, usually it has to internally communicate to reach a common business goal. As mentioned earlier, humans are wired to process information visually, and when that information is neatly gathered into one single place, the communication process also becomes simple and more efficient.

In a small company with good internal communication, teamwork can become a reality rather than a slogan. When all departments of a company, information technology, marketing, sales etc. are working together towards a common goal, they can make data insights meaningful and valuable. As we already mentioned earlier, it is important to create a dashboard culture in your company and make sure your team members let themselves be guided by data in their everyday decisions. The reason why implementing big data for small businesses can be so useful is that it increases the team morale and involvement levels. Employees are given the opportunity to better understand the customer, forecast market trends and monitor their own performance. This, in turn, encourages them to make fast and confident decisions and benefits the company as a whole.

4. Use smart data sources and tools

Now let's get down to the nitty-gritty of big data analytics. The most important takeaway for you here is that you don't need programming, SQL, Hadoop etc. skills to break up your big data into insights. Start with easily available resources you can find online. For useful information about demographics, profession, interests of your customers, you can obviously go to Facebook Insights and Google Analytics. Moreover, you can find online state and regional databases or files that can increase your knowledge of your customers' lifestyles. For example, in Massachusetts, it could be  The Pioneer Valley Regional Data Portal (PVRDP) which consolidates regional economic, planning and workforce data through a publicly accessible portal specifically designed to support economic development in the region. You can look for more free online sources about a chosen population or demographics in the region that interests you.

Then, the same applies as for our third tip on getting started with small BI, earlier in this article. Once you have all this data in your databases, you will need a business intelligence software that will allow you to sit back and watch as the data is being crunched for you and business insights emerge. How to choose the right tool out of many available online? First, check if the tool is easy to deploy and you can start using it within minutes. That's another advantage your small business has over big companies - you can install and start using business analytics tool immediately, with no need to wait months as the software and hardware is installed throughout the organization and employees undergo training to be able to use it. Most online tools that analyze big data for small businesses follow a self-service model - all members of your team will be able to perform analyzes on their own, with no need for the IT department to get involved and for you to pay extra money for training. With its simple, drag and drop feature, an online data visualization tool  will turn raw data into beautiful visuals, ready to interact with by using few clicks on which you can expand your data into specific time-frames and perform additional analysis of your overall business management process.

Data analysis tools  will usually allow you to perform cross-database analysis, and juxtapose data in different formats. Depending on how much data you have, you will be able to choose a pricing scheme. You pay for the functionalities and capacity you need today but thanks to the subscription model you can scale up and add more features as the need for analytics increases. This approach is a perfect fit for small business with big growth potential, where it's critical for the cost and capabilities of software investments to align with the rate of growth and expansion of the operations. This is where the magic of online business software comes in hand: you can adapt it to your own needs and perform your own analysis, adjusted to your own values ​​and business indicators.

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Ahead With The Right Analytics For Small Business

It is a no-brainer, you don't want to miss out on the rise of  self-service analytics. Analytics for small businesses fulfills various needs, increases customer knowledge and retention, strengthen client bonds by anticipating clients' needs, and enrich service offerings with new knowledge. It also allows you to analyze data online, helps you stay proactive, visualizes your data, increases collaboration, and helps to secure your data. On a more team-related side, small data analytics also increases productivity, maximizes staff resources, simplifies complex data and analyzes, gives your employees space for self-improvement and significantly helps startups. In small business operations, every minute and working hour is crucial to perform in its best and cost-effective form. By analyzing your data in real-time, you can make fast decisions that will provide you with additional working hours, which you can then spend elsewhere.

Whether your business is big or small, business intelligence doesn't have to be overwhelming or difficult. You just need to approach it with the right tools and preparation. Information pours into your company every hour, every day. Don't just store it, or ignore it - use that data to make better decisions for future growth.

Small data analytics are providing actionable insight, allowing both sides of the table to support their cases and be more effective. They can also help you save money and help your employees work faster, be more efficient and keep track of their individual performance. Without a doubt, both big and small data have their specific uses and benefits, but it's essential to remember that any data analysis starts with small data sets. Companies looking to gather and act on metrics effectively and quickly should utilize all kinds of data available. With the right people to analyze the right data and the right business goals in mind, your company can do wonders with small data analytics.


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