Big data refers to the process of examining and analysing large and diverse data sets for the purpose of uncovering valuable information to help businesses make informed decisions. The relationship between SMEs and big data is not contradictory, because no business is too small for big data. In fact, SMEs can gain significant benefits from big data.
Each customer activity, sale, contact and interaction produce data that holds valuable information to improve future business decisions. The data can be used to gain meaningful insights such as market trends, customer preferences and business patterns previously hidden through manual analytics.
Fortunately, big data tools and technology are becoming more accessible for small businesses both in terms of cost and their actual user interfaces, making them user-friendly for people with only moderate technical skills. Data is now easier to collect and cheaper to host, making it obtainable to even the smallest organisation enabling them to produce significant amounts of valuable data when using their CRM platforms, managing websites and conducting transactions.
SMEs and big data
Many SMEs wrongly believe they are too small for big data, but businesses of any size need big data to succeed. The data provides businesses with actionable insights necessary to become more efficient and profitable and with efficiency being key to reducing small businesses expenses, big data is critical to identifying inefficiencies in their operations and consequently, resolving these issues.
Additionally, with big data analytics, SMEs can identify customer value, customer acquisition costs and calculate customer loyalty and retention. SMEs and big data can together make the smart decisions they need to make to get ahead of the competition and increase profitability.
SMEs and big data: Capturing data
Data tools are invaluable for standardising, validating and managing duplication of data, however not all data tools are created equal and not all data is high-quality data. Therefore, SMEs should undertake research to determine the best data capture option available to them.
Most small businesses have data in multiple places such as CRM systems, inventory control software, marketing activities, web traffic and POS sales systems. Data integration tools can connect each data source allowing SMEs to access and transform all datasets in one convenient location.
With the many benefits that big data and analytics provide, it is essential for SMEs to find the data tool that is right for their specific needs, ensuring that the data gathered is reliable accurate, complete and consistent. Having the right data governance tools, SMEs avoid the worry of analysing, reformatting, correcting and combining data sets because the tools help improve data quality usability, integrity, and value of their data.
Big data is less about having unlimited amounts of information and more about receiving high-quality information in a timely manner that is specific to your business. The more insights an SME has into its businesses, the better the decisions they can make to optimise business performance. Without big data, it’s possible to know who buys what from your company, but it is harder to understand those purchase decisions.
Big data helps businesses to better understand customers’ preferences by capturing customer experience and behaviour information from any device. By tracking performance data companies can determine the best target segments, develop more effective marketing campaigns and help drive product improvement.
The benefits of big data
Big data gives SMEs the opportunity to focus on local customer preferences removing the guesswork out of local market insight and buying behaviours. Data tools sort through the digital activities of customers eliminating much of the manual work previously required of small businesses.
Automation can create shortcuts for your business, specifically when it comes to analysing data and putting it to use. Automating inventory control and other common tasks cuts costs in terms of time and money and provides a substantial return on investment.
Data tools can provide a competitive advantage by helping to assess business finances and determine how the businesses pricing compares to that of their competitors. Through big data, SMEs can establish if prices are in line with the competition and decide if there is a need to raise or lower prices accordingly.
Social media has evolved as valuable source of data, making activities such as identifying niche markets and analysing customer feedback easier and cheaper. Data tools can help SMEs mine social media platforms, leading to more effective strategic marketing decisions.
Big data is increasingly used to optimise business processes, everyday operations and to increase the effectiveness of decision-making. With any business process that generates data, the information can be used to make improvements and generate efficiencies.
For example, manufacturing companies can integrate inventory control, data-enabled plant, machinery and vehicles and constantly report their status to each other. Through analysis of this data, organisations can gain real-time visibility into their operations to identify ways to improve efficiency.
Retail companies can optimise inventory stock based on predictions generated from web searches, social media data and consumer trends. This allows stores to stock up on the most popular items, to ensure they don’t miss out on sales and to reduce any unwanted stock.
Supply chain optimisation also benefits from big data analytics with GPS and sensors used to track goods and optimise delivery routes by integrating live, real-time traffic data.
The importance and value of big data should not be overlooked by businesses of any size — it can help to reduce costs, improve pricing decisions and increase sales.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. When not writing about inventory management, you can find her eating her way through Auckland.