Data, or rather the insightful analysis of data, can be very powerful.
In 1854 John Snow, considered to be one of the fathers of modern epidemiology, captured and analysed data that identified the source of a cholera outbreak in Soho. His findings inspired fundamental changes in the water and waste systems of London, which led to similar changes in other cities, and a significant improvement in general public health around the world.
He spoke to residents, examined water samples, observed the pattern of the disease, and used dot maps and statistical analysis. Big data?
It could certainly be argued that it was unstructured, and that's one of the key characteristics of big data. However, it probably didn't share the volume and velocity that is typical associated with most definitions of the term.
Staggering data growth
To clarify, the world's technological capacity to store information grew from the equivalent of less than one CD per person in 1986 to almost 61 CDs per person in 2007. That was only three years into the life of Facebook, which by 2012 was adding almost half a petabyte of data on a daily basis.
In the last couple of years the amount of content added to Facebook has grown by 350% to a staggering 2,460,000 pieces per minute.
The number of tweets over the same period has increased from 100,000 per minute to 277,000, and Instagram users post 216,000 new photos – an incredible increase of 6,000%.
Now that's big data!
But that's only the data that we create as individuals, and doesn't take into account the huge amount of data captured by a never-ending stream of information-sensing devices in the so-called internet of things. All of which are reliant on the ubiquitous 'cloud'.
Lessons for SMEs
So why does it all matter? And what lessons can SMEs learn from the fascination and hype that surrounds big data?
In a nutshell, it's all about competitive advantage and there's nowhere more obvious to look for an example than sport.
It's now impossible to watch almost any sport on TV without being bombarded by statistics but they're not just for entertainment as anyone who's seen the film Moneyball (starring Brad Pitt) will testify.
Based on Michael Lewis's book, Moneyball: The Art of Winning an Unfair Game, the film tells the story of how the Oakland Athletics baseball team used 'sabermetrics' – the specialised analysis of baseball through statistics that measure in-game activity – to assemble a team for $40 million (around £26 million, or AU$51 million) that was able to compete against the might of those with a salary budget three times that amount, such as the New York Yankees.
The danger for many SMEs in becoming preoccupied with big data is that it's likely to result in unnecessary over-complication.
The key with any data – big or otherwise – is visibility and whilst it's been suggested that 85% of SMEs aren't in a position to analyse big data, how many actually capture really valuable insights from analysis of their existing data?
Thankfully, an increasing number of tools are becoming readily available.
Modern CRM and marketing automation technology allows businesses to start to make sense of social media activity – even if that's as simple as understanding what individual customers are talking about or interested in before having a conversation with them. Of course, that conversation could just as easily be online as offline.
Amongst others, Microsoft is pushing the concept of Power BI, and new tools such as its Azure Machine Learning are opening up new opportunities.
And it's not only about data that you capture yourself but also about tapping into publicly available 'data warehouses'. Think about Google Analytics – which many SMEs will already use – and multiply it exponentially.
As always the key for any SME is to understand the cost versus benefit of capturing and analysing data – and ensuring that there's a clear objective and end game, as well as being in a position to take action based on the insights that are generated.
- Steve Cox is Chief Operating Officer at TSG