Profit from data
This article was originally shared by croneri.co.uk.
Every business now generates masses of data. Understanding that information and extracting the value from it is no longer a black art. Instead, the ideas behind Big Data have filtered down to smaller enterprises that can now use affordable tools to make their data pay.
According to McKinsey, businesses that want to future-proof their organisations need to become data-focused enterprises. That statement was made in 2018. Fast-forward to 2021; data is now a precious commodity all companies are attempting to leverage for commercial insights and to help them innovate at speed.
Extracting value from the vast quantities of information every business collects about its industry, commercial partners, and, of course, its customers means connecting several tools together. Data hygiene – moving away from siloed information to integrated data lakes is the first step. Then, using AI systems to analyse the resulting datasets with clearly defined goals is essential if valuable results are to be extracted.
“The majority of small businesses still don’t know how to harvest all of the data they have well,” says Dirk Wischnewski, B2B Media Group's Chief Marketing and Operating Officer. “Most of them still struggle with what are the right tools to manage their data collection and analytics. The reasons for this include the costs of tools and the missing internal resources that are required to run these tools and to analyse and activate the data for their business.”
Also, the BI tools that have become available now enable any size of business to collate, curate and interrogate their data. Big Data has become little data, as tools, such as Qlik Sense, Qrvey, Splunk and Tableau, allow an unprecedented level of data analysis. With intuitive user interfaces and high levels of integration with other BI systems, any enterprise can build data analytical solutions to unlock new potential commercial opportunities.
Croner-i: Business Inform spoke with Ian Elder, Head of Business Analytics, Wolters Kluwer UK.
Do small businesses now understand how to extract valuable information from the data they have?
“Access to data and provisions for how all business users can access and interrogate data is becoming more and more democratised. Modern BI technologies recognise that great solutions should enable a wider reach to more business users when creating insight. This makes sense; traditionally, the production of BI would typically fall to an analyst or IT person, and the model was generally ‘get what you're given’ - inflexible tables of data that had to be wrangled.
“More recently, technologies offer low or no-code solutions which get to the heart of the issue because business users are full of great ideas, but don't want to articulate them to a person or even worse fill in a form. They want to have a tool they can use themselves, even without coding knowledge, to become authors of their own insight.
“For a smaller business, even the use of no code solutions may still present challenges. Time is the most valuable commodity of a small business owner, and learning new technologies, even those without code required, can sometimes be a barrier.”
Are small enterprises using AI to help them use the data they have for practical outcomes?
“Certain solution providers are now putting AI applications in the hands of small business owners. As an example, you can now create chatbots completely code-free using simple visual canvases that harness a lot of AI computing power to provide a great user experience. Other applications such as this will be on their way to small businesses and will become commoditised so that they are wrapped up into an overall SaaS package a small business can pay for.”
How important is data governance when analysing large datasets and acting on the results given?
“Data governance is arguably more important than the production of insight itself - if dashboards are built on poor data, the outputs may be meaningless, or worse still is misleading.
“For small businesses, in particular, an appreciation and sensitivity surrounding data governance are critical, especially if the decision has been made to grow the business by being data-driven. It's a huge opportunity, but it's far easier to change bad habits earlier on in a fledgling business than to try and reverse the trend in a large organisation.
“It's essential to select the right technologies and connect the right data validation rules to avoid 'rubbish in, rubbish out.' It's also important to train colleagues in the right way to appreciate why data governance is so important.
Consider these two statements:
We want you to input this data field in a certain way into the system.
We need this data to be accurately captured because these data points, when aggregated up, will provide us with the direction with which our business will grow into the next few years.
“The latter speaks to the why and should help colleagues remember the importance of good data in your business.”
Is Big Data becoming Small Data as it focuses on small groups of consumers and even individuals a business can communicate with?
“Big data is still here, but what we are seeing is more sophisticated segmentation that allows better targeting and personalisation. Generally speaking the more data points you capture about a customer, the better technologies can maximise their success.
“Even if you don't have the technologies or expertise today, to have a strong body of data about your customers firmographic information, interaction with your communication, potentially product usage and telemetry is a really good body of data to curate. Once the right technology comes into the business, you will have really rich data sources to train the right analytical lenses to unearth potentially game changing insights about your business.”
What does the future look like for small business data intelligence?
“Small business data intelligence will follow the trends of larger companies, insofar as a small business will eventually have access to the same technology that only larger enterprises have traditionally had access to.
“The value exchange of BI tooling is changing, moving away from prohibitive upfront fees and expensive annual licences to more of an accurate SaaS model - monthly subscription per user.
“With the rise of ubiquitous computing power on the side of technology providers, the ability to do more with larger data sets at lower cost is coming to smaller business and may be here sooner than businesses originally predicted.”
The business challenge
The future of all businesses, no matter their size, industry or sector, will be driven by their ability to use data to make tangible decisions. Yet, too often, data is used for just reporting, when its actual value is when information is used to take actions. These actions could be across marketing activities, R&D, customer services or supply chain communications and logistics.
Jaydeep Chakraborty, an Instructor in Data Analytics at Toronto School of Management, concludes: “I think it is the golden era for cloud-based business intelligence platforms. The recent years have seen a lot of growth among platforms like Qlik, Tableau and Power BI. They have brought tremendous power to the fingertips of business managers. The total cost of ownership is also considerably low. In the near future, this trend will continue to enable Analytics Adoption among small organisations.”
Building a culture of actionable data analytics into a business is essential. The outcome of these analytical systems will influence the decisions that need to be made. These results, though, must never be taken in isolation. Data is only powerful when integrated and connected across an enterprise where set goals can use this information to achieve transformative commercial innovation.