All About IT
by John Burton, NPI
Small Vermont businesses benefit from big data
Businesses have been generating data since the beginning of commerce. First it was trapped on paper in filing cabinets, but by the ’70s it had migrated to floppy disks and from there onto hard drives. At that point, data growth exploded.
According to a recent study by IDC Technologies, data is doubling in size every two years and by 2020 will reach 44 trillion gigabytes. The study also shows that by 2020, useful data — information delivering real business value — will grow from 22 percent to 37 percent.
Thanks to falling costs and new cloud-based data and tools, even small companies can unlock the insights hidden in their own data. The ever-expanding galaxy of Internet-based information draws from social networks, government databases, and other sources. Even digitized versions of spoken words and data gathered from sensors via the Internet of Things can be cross-referenced with small company data to improve business performance.
A short time ago only Fortune 500 firms employed the power of “big data.” Now even small businesses use cloud-based tools like Tranzlogic and Kaggle to process data into useful forms. Pricing histories and customer traffic patterns are easily accessible from multiple outside sources leading to insights about customer behavior. Businesses can eliminate inefficiencies and strengthen customer relationships by anticipating needs. They can also enrich service offerings and give employees new job-improvement tools.
Businesses are determining staffing levels using weather reports and company history to forecast customer traffic. Data can identify the ZIP codes of frequent buyers and analyze purchases by time of day — opening up new strategies for increasing sales. For example, car dealers can now predict which cars will yield the best resale. Burlington-based Faraday crunches terabytes of data to uncover the hundreds of relevant attributes of U.S. households. One client says, “I can present customized information customers need to go solar in Vermont and around the country.”
If a business has been operating for even a year, it is likely to have valuable data sitting on computer systems that can be easily linked to demographics, weather history, and consumer spending habits. Using the new generation of inexpensive online tools, it is fairly straightforward to add value to local data and glean new insights to then adjust operations.
Big data is about the opportunity to make smarter business decisions. It changes the business landscape to enhance product quality, improve marketing operations, and further customer relationships. These newfound efficiencies can help agile small businesses compete against international behemoths.
Cloud vendors of big data services allow small businesses to start with a limited budget and ramp up as their data volumes grow. Using the right data sets and extracting value from the information creates more opportunities to initiate competitive adjustments. The new wave of open-source databases helps small businesses target specific problems using readily available resources. And by renting virtual resources or using open-source databases, businesses can avoid large license fees to reduce upfront investments.
Currently, big data is a powerful way to find a competitive edge; however, forecasters believe it could become a de facto part of doing business in the next 10 years. Using this data is about more than just analyzing information. It’s about taking concrete actions based on the findings. Smart use of data can provide a broader business view providing unique insights about competitors and customers.
In many ways, big data is better suited to small business than it never was for big business. Even the most potent insights don’t help unless your business is flexible enough to quickly act on them. Small businesses have the advantage of agility, making them perfectly suited to take advantage of data-derived insights with speed and efficiency. •
John Burton is president of NPI, a technology management company in South Burlington, www.npi.net.
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