Some years ago, researchers from the University of Edinburgh published a paper that explained a process of using big data analytics along with algorithms and unsupervised machine learning to generate jokes. From joke generation to digital transformation, technology is enabling positive disruptions and big data sits comfortably at the head of this real-world table.
The positive impact of data is driven by the insights that can drive decision making. For example, smartphones have helped consumers comprehend retail products and pricing tactics much better, helping them to make more informed purchase decisions even before they have walked into a physical store.
The only way to be successful in today’s hyper-competitive marketplace is to empower people to make more data-driven choices. The same holds good for SMEs. They can no longer run the risk of jeopardising their long-term prospects by sitting on the big data sidelines. Big data and analytics can transform their business outlook; from re-imagining business models to helping them take services to market faster.
Transforming SMEs with data-driven decisions
Some businesses believe big data is this force that will alter the business landscape and therefore alter their workplace. This is a mistake.
The question is not how big data will transform the players of the industry, but how the players in the industry can leverage big data to help SMEs transform themselves. Companies need to be consumers of big data and actively implement it to bring insights to the organisation.
While SMEs can benefit from big data, they are not, and should not be, big data actors – their priority is to drive greater efficiencies through the insights provided by statistics, not to become proficient in its operations in a technical sense.
SMEs that do learn to utilise big data will have a deeper knowledge on key components of their business. This would be quantifiable information, backed by data crossed and correlated internally from various data points, aggregated and then would ultimately be turned into action. Without this, the business is left in the dark from the true workings of the company.
The metrics that make up the big data
Regardless of industry, every business is driven by the same objective of going beyond the bottom line. This ensures that a key big data metric for all SMEs is revenue. This calculation is based on the capacity of reaching the market, the ability to detect threats and opportunities.
Firms must focus on the most significant costs and profit generators that will ultimately ensure incremental growth and market penetration. In these terms, the cashflow position is a metric that is especially significant for SMEs.
Smaller businesses are usually exposed to more risk, as larger companies have cash reserves or access to debt, making cashflow a prime concern. Many SMEs are not informed of their true cashflow profile. They do not have cash in their bank and thus, are not always sure they can sustain activity.
Big data provides SMEs with the visibility across the business and therefore, assess their risk in terms of cashflow. If there are gaps in the cashflow, the business is then aware of the danger and may take steps to fix the problem.
The context of data
Big data is only as meaningful as its context. For example, if a business is concerned with measuring pollution rates, but its data point is located next to a coal factory, then the reading will naturally be different to somewhere in the countryside. Therefore, a broader view of data is important to get a more complete view.
It provides different angles about what separates a certain narrative. Going back to the pollution example, this total picture consists of temperatures, humidity and the quality of the ground. Only once all this data is correlated can a detailed reading be made that makes sense.
Taking a broader view mitigates the limitations of context. By seeing a greater range across the whole context, SMEs can make better decisions, but they must ensure to keep the large picture in mind.
Powering forward by big data
Today, big data is a familiar concept. The growing digitisation of people, machines and businesses have created greater amounts of data than ever before. In order to keep up and stay competitive, SMEs have to adjust by integrating data into the heart of the business.
Big data is the quantification of objective information, empowering a company to make well-informed decisions and therefore, holds great capacity to drive business outcomes.
Stephane Ibos, CEO, Maestrano