Big Data is the term used to describe a large amount of data gathered from a variety of sources that are dynamic and fast moving. The data that a company like Google or Amazon hold would be considered big data. Previously considered a resource only available to large corporations with expensive technology to hold the information and a large staff to analyze it, due to technological advances and dropping prices, big data is now available to small and medium-sized businesses.
Driven by the growth of online transactions, companies now have the ability to capture far more information about their customers than they could in a brick and mortar storefront. An in-store purchase may gain a business inventory information, such as sales volumes, at what price point the product sells, and volumes of sales per geographic location. If the customer has a loyalty card, the potential to collect individual customer information exists, depending on what information is stored as part of the loyalty program. An online transaction collects all of those data as well as the ability to see what else a customer looked at, how long they spent on the site, how long they spent on each page, and how spending is affected by different promotions.
Having access to these large datasets and the tools to analyze them is an absolute must when looking for an advantage in a competitive industry. This belief in the strength of data is seen in the newer school of thought of Evidence-Based Management which, like the Evidence-Based Medicine or Evidence-Based Policy it is based on, uses the best available evidence to make decisions rather than subjective feelings of what is the “best” decision. Having large datasets at your disposal to query will help give the best evidence. Often it is better for smaller businesses to use big data than larger ones for Evidence-Based Management because their smaller size makes them more agile and able to adapt to needed changes.
For small business owners who have never used big data, or even any data at all, to examine their information and make use of what they have, there may be questions. Some of the most popular follow.
Chances are, small businesses already have a fairly large amount of data collected, particularly if they have been in business for at least a year. Even if the business is older and had not begun in the digital age, and does not have many electronic records, the paper records still contain data. Sales slips, time cards, order forms, all of these have data worth analyzing. Perhaps the records are a mix of paper and electronic records. Maybe more recent inventory records are recorded in a spreadsheet, while the older information is kept in a hand-written ledger. It would be worth the business owner’s while to digitize the paper records. This will require an initial output of resources, but the time spent scanning images or entering data into a database program will be paid back in the time saved by the staff not having to dig through paper files looking for information in addition to gaining the ability to query these records.
Once all of the information is entered into a system that can be queried, data can be found from other sources that can be linked to the business’ records, often from free sources such as the US Government’s open data portal or Google Trends. In addition to these, there are many other publicly available large data sets to be found that can provide context and support to the data that has already been collected by the business. Population trends, weather, most popular baby names, etc. – all of these are data sets that are available for incorporation into a data set.
Small business owners just beginning to use big data should start with small projects. Look for solutions to specific problems or answers to specific questions. If the business has a website, Google Analytics, offers free data analysis.
