The Growing Importance of Big Data for Entrepreneurs

Updated on 23 July 2014

Subscription Form (#66)
Reading Time: 5 minutes

big data

It’s hard to ignore the growing hype around Big Data, which is becoming a frequently heard term even outside tech circles. So what is big data anyway, and as an entrepreneur or small business owner, do you need to pay attention to it?

According to IBM, we create 2.5 quintillion bytes of data – every day. And 90% of the data that exists right now has been created in the past two years. This data is in the form of digital pictures, online music, videos posted to YouTube, scientific information, and online transaction records – the list is endless.

Microsoft South Africa‘s server and tools business lead, Leon Wright, explains what Big Data is and how small businesses can harness their growing mountain of data.

What is Big Data?

As a result of the rapid global adoption of social media and smart devices such as smartphones and tablets, an unprecedented amount of information is being generated by users and internet-connected sensors. This new barrage of information is complimented with traditional data that is being created but is not necessarily related or connected with the topic being researched. Pulling all these potentially non-related components together and creating valuable touch points is the big drive behind Big Data. This information is referred to as Big Data.

“SMEs are beginning to see big data as something more than just an enterprise trend”

Can you give us a basic technical explanation of how Big Data works?

Big data consists of various kinds of technologies that work together to achieve the same goal: which is allowing a business to extract value (insights) from mostly unstructured information from social and other online sources. Essentially Big Data combines multitudes of different data sources from both public and private or commercial sources ie: internal company databases and brings them together in a query-capable format.

An example of this could be a small clothing business on the beach querying the weather patterns against their sales history over the last 10 seasons, to determine the type of stock and volumes they should be investing in, ie: traditionally non-related data sources being brought together, potentially also tapping into a social feed to determine what retail outlet was/is trending and the reasons for such.

What are some of the benefits for SMEs adopting Big Data?

Businesses that adopt the right tools to help them easily access big data, analyse it and combine it with data from their organisation, will gain a competitive advantage. Amongst other benefits this unlocks, is the ability to produce insights that are needed for companies to target new revenue sources or a previously unexplored customer base, and streamline its operations.

I see the advantages of Big Data on several levels – we have the direct potential for better efficiencies, better productivity increased customer awareness sentiment and service capabilities. But one of the biggest opportunities is that of adjacent business opportunities currently not being identified, but the SME having all the components and with very little change could expand and diversify the business.

Is South Africa ready? How do we rank compared to other countries in using Big Data?

According to research done by market research firm Strategy Worx Consulting, South African businesses are lagging behind the international community when it comes to the use of big data analytics. The research company attributes this to a lack of understanding by local companies of the competitive advantage big data analytics enables. The opportunity here is for South African SMEs to move quickly to cloud-based services and have the opportunity to leapfrog.

How can SMEs sensibly use data to improve the products and services they deliver to their customers?

A simple example of using big data to gain business intelligence: a US-based Red Robin restaurant chain decided to test a new hamburger across the franchise. To do this, the organisation provided frontline waiters with devices on which to input customer feedback about the burger.

Normally, this kind of testing, feedback and response would take around 12 to 18 months, but Red Robin got a new burger onto the menu within only four weeks. The result of this quick turnaround was being able to analyse the data they received from the customers, quickly and efficiently- helping them determine what was best for the business. To burger or not to burger, that was the question answered.

In another usage case, Microsoft worked with Nike and consultants Cognizant to connect storefronts with Nike’s Business Intelligence portal to assist the company in gaining a better handle on its store inventory. Not only did Nike achieve this aim, but the company also received an immediate sense of which products were selling the best, leading to its research and development cycles being shortened as well.

Read Also: Find out how your sector stands to benefit from Big Data

What’s the downside for SMEs who do not jump on the Big Data bandwagon?

The real advantage that big data unlocks for organisations is that companies can collect data from any source, extract the information they need and analyse it to discover insights that boost the performance of their business.

Those firms who do not use these new tools available to them will miss out on new revenue stream opportunities and keep doing things the same old way, limiting the scope for growth considerably. They will also be unable to make strategic and timeous decisions to change their tactics or strategy when a particular course of action is proving detrimental to the reputation and bottom line of the business.

Key to customer centricity is real-time customer sentiment and this is potentially one of the biggest changes we will undergo through this Big Data convergence. The business will cease to be a series of events completed in time but will become a real-time engagement in both the presales stage and post-sales stage. Making this real, could mean picking up a potential opportunity through a customer’s social feed or request, immediately presenting them with an offer and measuring the sentiment post and the purchase. This is no longer a traditional sales event but rather a real-time engagement.

What’s the one thing that business owners can do right now to get their businesses ready for the migration to Big Data?

Big data and BI solutions have managed to climb their way to the top of the corporate agenda and businesses will require data analysts a lot more going forward, so skills development and talent acquisition in this regard would help build a great BI foundation for companies.

For organisations to make the best use of Business Intelligence solutions and tap the most insights that will help build the business and its capabilities sets, BI tools need to be accessible to every employee.

For this to happen, the software needs to be easy to use, which is why Microsoft’s solutions deliver analytics through familiar software such as Excel.

Since business users already use it in their day-to-day tasks, the uptake of the software among employees is generally higher simply because the learning curve for the solutions is lower, making the overall benefits that they deliver more accessible to a bigger pool of people. With the BI capabilities landing in the market, everyone has the potential to be a data scientist.

Get Weekly 5-Minutes Business Advice

Subscribe to receive actionable business tips and resources.

Subscription Form (#66)

Feeling Stuck?

icon