Small Firm, Big Data
There has been plenty of excitement about Big Data for some years. The challenge, of course, is to find the signal in the noise and turn the data into actionable insights. After all, there’s a reason it’s called “big”: Netflix gathers more than 500 billion pieces of information per day. Fortunately, the emergence of ever more powerful AI and ML means we are more likely to make sense of it all in the future.
James Wallman, Future Gazers report
Till now, finding meaning in these oceans of data has only been possible for large firms with deep pockets, as they try to mimic the success of companies like Google, Amazon, Facebook and Netflix — who serve you ads, and suggest products and TV shows based on your age, location, what other people like you liked and because you mentioned going to York for the weekend in a status update or email to your friend.
But thanks to cloud computing and the “software as a service” (SaaS) model operated by firms like accounting software company Xero, you no longer have to be a big firm to profit from Big Data. In the future, all firms will be data firms: even yours.
The Cafe Grind, a coffee shop in New York city, is a good example of a small firm using big data to be more effective. They use the cafe’s point-of-sale system to track customer visits and how long it takes to serve each customer, and to monitor which items are selling. The owners say this saves them five to ten hours per week in managing logistics.
Another is a zoo in Washington state in the US called Point Defiance Zoo1. When the zoo compared years of data about visitor numbers with the local weather, they discovered new insights that helped them work out, with eerie precision, how many visitors would come on any one day2. The system’s predictions are accurate enough that the can zoo work out how many employees they need — to the hour. This has led to significant savings.
Drilling further down into the data, the zoo discovered who their most regular guests were and used that data to increase memberships by 13%. They also noticed when people were buying tickets online, started targeting them with time-sensitive ads and increased online tickets sales by 771% over two years.
In the future, more small firms will get more out of Big Data as more SaaS platforms emerge. Here’s three examples of the sort of SaaS platforms that we think all small firms will be using.
Seattle-based Smartsheet is a collaboration tool used by companies big and small — from Netflix with its 3,5000 employees to a six-person communications company called Mash PR in London. It helps teams stay on top of projects through real-time reports, actionable task lists, and at-a-glance overviews of what’s actually going on.
Rather than keeping customer data on pieces of paper, in a little black book or on a spreadsheet, San Franciscobased Insightly offers a simple, scalable, web-based way to more effectively manage your customer relationships. Plans start from free for up to two users to £9 per month for the basic account.
You can access computing giant IBM’s Watson Analytics in a similar way. The first trial plan is free, the next is around £22 per month. Once you’ve uploaded your business data, the system will help you present it in a way that’s meaningful to you and then actively look for patterns, correlations and insights. Armed with your data, Watson Analytics can then answer the sort of simple questions you might ask a colleague, like “What are our high-value customers responding to?” and “What’s impacting our profitability the most?”.
As SaaS services become more user friendly, and as more firms discover the magic of Big Data-analysis, it’ll make working the old way — using paper and notepads, having reams of data doing nothing but sitting, unconnected and meaningless in A4 folders in cabinets — seem as antiquated as riding a penny-farthing would seem today.
At present, 77% of firms do not have a Big Data strategy, according to IBM3 — yet 63% of firms get a return on investment within a year4. Because of the clear analytical opportunities offered by Big Data, more SaaS businesses will appear in the 2020s that help small firms manage the unstructured data that they and their customers generate, so that they too can profit from the sort of up- and crosssell opportunities that firms like Amazon, Google and Netflix do today.
By 2030, management platforms will make it easy for small firms to make use of unstructured data so they can say the sort of things to their customers that the GAAFA companies do today: “because you bought this, you might also like…”, “people who bought that also bought…”, and “people like you also bought…”.
Crucially, you’ll be able do this with confidence based on data rather than hope, improving the relevance of your offer for your customer, improving conversion and increasing sales for you.
By 2030, Big Data won’t only be for big companies. All firms, including small ones, will become Big Data-driven, customercentric, smart firms who leverage their own and their customers’ data to be more relevant and make more money.
Future Gazers report
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1. OK, so the zoo isn’t that small a business, but it is medium sized. And we think this example neatly illustrates the point we’re making.
2. 4For one Memorial Day weekend in May, the system’s prediction was within 113 of actual attendance, out of the thousands of visitors. Source: Mohammad Ali et. al., “Small Data and Big Data: Combination make better Decision”, International Journal of Research in Management, Economics and Commerce, ISSN 2250-057X, Impact Factor: 6.384, Volume 06 Issue 10, October 2016, Page 1-6.
3. Source: Big Data & Analytics Hub, IBM; www.ibmbigdatahub.com/gallery/quickfacts-and-stats-big-data
4. Jennifer Horowitz, “How Small Companies Can Use Big Data To Grow And Improve, Digitalist Magazine”, 21 March 2016.