Hype around 'big data' is growing; so much so that the area's advantages are often forgotten. Essentially, the term refers to the large amounts of structured and unstructured data that your company produces on a daily basis.
While SMBs are producing vast amounts of data, many aren't using the information in the right way. However, this often untapped data can change the way your business works, bringing you closer to your customers, and helping you understand the mechanics behind your sales.
So how does a small to mid-sized firm use data optimally?
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Sourcing the data
Big data needs to be approached in a strategic manner. Most companies produce more information than they can ever analyse, so they must first find - or 'discover' - the data that will help them most.
This is because big data is varied, there's lots of it and it comes in fast, says Jonathan Woodrow, Commercial Director of managed service provider RightSize. "Every business in the world runs a spreadsheet - you naturally grow into using them," he says. "The thing is, they become unmanageable very quickly."
Once the data has been found, the right tool must be used to analyse it. It's a popular low cost option for SMBs, but Microsoft's Excel is dangerous when it comes to big data, experts agree. According to Duncan Ross, Director of Data Science atTeradata:"If it's too easy to use, you can do it without thinking. With big data, you need to ask the right questions."
However, firms certainly shouldn't be doing big data "just because everyone else is doing it": its viability depends on an SMB's individual needs. According to Tony Baer, Principal Analyst at Ovum, industries such asfinancial services, telecoms firms and digital media companies, as well as SMBs that deal with logistics and environmental information, will find the ability to structure and analyse their data particularly useful.
For example, manufacturing companies can improve operational efficiency by measuring information such as machine data.
"It's about getting better insights so you can reach your goals more quickly and more efficiently," Baer says. "It's like any IT system: the aim is to achieve a business goal. Big data is just a means to an end."
Mobile and web apps generate a good source of data as they deal with huge volumes of information. Using this data, firms can then look at how many people are visiting their website and how they behave once they are there.
Using the right tools, you can even see where people hover the mouse, says Ross. This information can be as detailed as where the user came from; the search engine they used; and what mobile operating system they are on. "You then can use that data to start investigating your potential customers," he says.
Meanwhile, businesses in London could use "open data" released by local governments as a resource for making decisions and targeting demographics. As part of this initiative, Companies House recently announced it is opening its data. This will allow businesses to access accounts information for free and use it to their advantage.
There are many big data tools available, but they often rely on self-service, so firms must have the technical ability to use them. Therefore, SMBs might prefer to buy in a managed service, or call upon a consultant to look at - and structure - their data first.
Companies such as RightSize offer free consultancy and costs go into a monthly fee - including the license. Woodrow says this equates to around £3,000 ($4,909) to £4,000 ($6,545) per month.
For managing large amounts of data, Woodrow recommends analytics tools such as Splunk, Tableau Software, and BI dashboard QlikView.
Another company, Birst, has recently announced 'Visualizer'; a tool for 'discovering' your data. The firm's pricing is on a per user, per month basis.
Meanwhile, if you are confident using big data tools, pricing is now much more affordable for smaller companies. Sometimes these won't cost you anything: the open source movement has provided a lot of free tools. Thought to be the best of these is a fast-growing open source alternative called R.
One SMB, MastodonC, used R to undertake an analysis around GPs' take up of drugs, using a technique called 'Cox proportional hazard modelling'. Using this method, the firm was able to test a number of theories on whether doctors were likely or not likely to take up new drugs. "You'd think older GPs were less likely to embrace new drugs - but this wasn't the case," Ross says.
Once you strip away the hype, big data is an area that can reap big rewards. As the amount of available data surges, structuring and using the right tools will be key to boosting sales and increasing efficiency.