Although one may associate Big Data – or large volume of data – with something only huge companies can handle, the benefits of Big Data may be enjoyed by both corporations with limitless resources and small businesses.
Indeed, processing and analyzing complex digital data sets that often come unstructured and diversified may be quite demanding. But the outcomes, or Big Data pros, like insights and knowledge obtained, are precious if not priceless for business entities of any size and representing virtually any industry. Wherever there’s a wealth of data or information available, it can be utilized and analyzed to increase the company’s market share or business position in general – by identifying customers' needs and addressing them accordingly.
Big Data is mostly used in very large companies and institutions, hiring over 5,000 employees – 70% of them did so in 2017. As for small organizations hiring 1-100 people, this percentage accounted for 44%. Industries that are most active in Big Data usage embrace telecommunications (87% of companies), financial services (76%), and healthcare (almost 60%).
In this article, we’ll discuss the pros and cons of Big Data, paying special attention to the benefits of Big Data for small businesses. The threads that will be discussed here include:
1. Big Data – what it’s all about
2. 5 benefits of Big Data for small businesses
3. Big Data pros and cons – more advantages and some downsides
Big Data – what it’s all about
Big Data stands for massive amounts of data that any company produces within its day-to-day operation.
Whether a given entity decides to use it to its advantage or not, it’s up to them. It requires some effort to dig through the data – some parts are easier and some more difficult to gather, process, analyze and clarify. Also, they come in different formats and extensions, like PDF, HTML, MP4, and many more. But, first and foremost, it’s just the managers’ willingness that is needed to start, and not profound knowledge of the methodologies or the money.
We may take advantage of tools and databases we use anyway, and that is often free of charge. Some of them include CRM tools, spreadsheets like Microsoft Excel, web analytics, including Google Analytics, and analytics provided by social media, email marketing metrics as well as data that are open to the public. Of course, small companies may acquire some data from other organizations but they can obtain the majority on their own – usually by simply tracking consumer behavior.
5 benefits of Big Data for small businesses
Just because Big Data is a huge set of information, that doesn’t mean that small enterprises cannot take advantage of mining it. To get the competitive edge and predict consumer behavior, they may utilize the same tools as big corporations do. It’s enough to pay once for an external data scientist’s consultation – there’s no need to hire one in-house. This way, small businesses don’t have to waste money on learning from their mistakes but may take advantage of the experience of Big Data specialists.
Here are 5 key benefits of Big Data analytics for small companies:
1. Using Big Data pays off.
Without big financial expenses or investments, we may get cost reduction, increase return on investment and customer retention, as well as improve business decision making and effectiveness in general. It may also help us detect fraudulent behavior and save many troubles.
2. Big Data enables acting faster.
Being agile and able to adapt to circumstances that change lightning-fast is crucial these days. If we know the customers’ preferences well, have the most up-to-date knowledge, and can trace some regularities, we may create new services and products to satisfy their needs – ahead of our competitors.
3. Big Data helps gain certainty.
By utilizing Big Data, small companies uncover and take advantage of correlations and patterns instead of guesses that might be very expensive, e.g. if we decide to open another shop based on what we think and not on analyzed customer behavior and traffic. With Big Data, we may identify the company’s mistakes or weaknesses at an early stage.
4. Big Data helps trace and satisfy customer needs.
A small enterprise is very often a retail company, and Big Data may help identify and name customers’ shopping preferences, and understand them better. A thorough analysis of things like receipts or email marketing reports is a great means for providing the clients – of both traditional and online shops – with products and services tailored to their needs.
5. Big Data increases online sales.
Small businesses are also immensely present online, and utilizing Big Data may boost sales as well as improve customer experience and satisfaction. It can help shape online ad campaigns, and direct customers to items that may be interesting to them, based on their previous purchases, their profile, current and approaching season, etc.
Big Data pros and cons – more advantages and some downsides
The advantages of big data analytics are numerous and very encouraging.
Small business owners are usually closer to their clients than big corporations anyway, but adding some amount of Big Data to those relationships can make them stand out from the crowd and positively tip the scales.
Having detailed information about a customer, their previous purchases, needs, and habits at hand, we may provide cutting-edge customer service and assistance – eg. within a help desk or call center.
What many companies utilizing Big Data value, is rapid access to relevant data. As a result, e.g. by using advertising algorithms based on search, Big Data may increase sales by 15%. It helps diagnose the current problems and predict future events, e.g. regarding customer behavior, and shape the companies’ actions accordingly. Very often – by just using the data they already have, e.g. media streaming, as Facebook or Twitter feeds.
Big Data makes marketing more personalized and enables running targeted campaigns.
It can help segment and profile customers and show them various content or advertisements accordingly. Also, Big Data use enables being alert, swift, and agile, and reacting fast to the newest findings, which may give the company an unrivaled position. It may help trace and identify the reasons why the company’s performance is getting worse, and find some solutions to it.
Certainly, the benefits of Big Data analytics outweigh Big Data cons. As for downsides, we may outline privacy concerns regarding mass data collection and analyzes that are brought up more and more often. We may bet that not every customer is aware that such a huge amount of data is being gathered when visiting particular websites or shops. And that this is being done only to make him spend more money. And sometimes people grant access to their data, unaware that it will be used for profiling reasons. And they might not like that, for many companies, they are just a set of data or a number.
But for businesses of all sizes, Big Data is a tool of tomorrow.
Just yet, it’s utilized by corporations having millions of customers worldwide, such as Amazon with access to millions of records regarding payments and search histories but also other kinds of organizations and institutions such as governments (data about citizens), cities (traffic control), financial institutions (fraud detection and preventing cybercrimes), or hospitals (personalized treatment, tracking medication efficiency) as well as scholars, teachers, and students. Big Data also offers interesting and well-paid job opportunities and is set to grow fast within the following years.
And you, what advantages and disadvantages of Big Data can you spot? What is your experience with utilizing it? Which of the Big Data analysis techniques do you find the most useful and accessible?