A new buzzword that’s making the rounds in the business world has the potential to change the way you run your operation. “Big data” — or volumes of information about your customers that’s prime for analysis — has been called “the next frontier for innovation, competition, and productivity.”
What does this really mean? How can you use big data to your advantage as a small-business owner? Let’s take a look.
What “Big Data” Is
The amount of data being produced is massive, and it’s no longer the kind of information that we’re used to processing. In 2000, 800,000 petabytes (that’s 1 quadrillion bytes) of data were stored worldwide. By 2020, 35 zettabytes (35 sextillion bytes) will reside on computer servers around the globe.
Structured data, like the entries on balance sheets, the number of visitors to a website, and the total miles traveled by company vehicles are figures that we can process quite well. But structured data only represents about 20 percent of the information available, according to the IBM e-book Understanding Big Data.
The other 80 percent is so-called “big data.” Your car, for example, is sophisticated machine full of censors that collect massive amounts of information. However, without specialized (and expensive) tools, that data is nearly impossible to process and work with.
In short, volumes of useful data about your business and its customers are produced every day. The problem is that there are very few systems in place to present most of it to you in a format you can easily analyze. It’s simply too raw and too immense.
How to Start Using It
On the plus side, using big data to your advantage isn’t an all-or-nothing endeavor. If you figure out how to access even 10 percent of that untapped 80 percent, your business could be better for it.
Here are some suggestions for getting started:
- Sign up for Google Analytics. It would be difficult to find a better platform for website data analysis than Google Analytics. If you aren’t using it already, start now. It’s free, and it gives you all sorts of insights about your site’s traffic. You can track the number of visitors you get, how long they stay, where they go, where they came from, and just about any other data point you can dream up.
- Review your Facebook Insights. If your business has a Facebook page, you, as the administrator, have free access to a wealth of data about the habits of your fans.
- Check out SumAll. SumAll takes data from nearly all of your online platforms and organizes it in an easy-to-read snapshot. You can include Facebook, Twitter, Tumblr, and Google Analytics, AdWords, and AdSense, as well as many other social media platforms. The service is free (at least for now).
- Exploit your CRM software. Do you use Salesforce.com or other customer relationship management software? Your CRM software is collecting all kinds of data on your customers. All you have to do is look for it.
- Look at government data. Some small businesses may benefit from data collected — and distributed for free — by the federal government. In May, the Obama administration announced that it would make more information available and offer tools to help in its analysis.
- Hire a pro. Want to delve even deeper into big data? Consider hiring a consultant. The HBR Blog Network points to five types of people who are in the business of interpreting big data.
Whatever you choose to do, experts advise that you try to avoid feeling intimidated. Start with a small amount of data and expand your analysis as you see fit.
“Bigger isn’t always better,” notes IBM’s Colin J. Paris in the Washington Post. “The sheer amount of data available is growing at an exponential rate and can often seem overwhelming. Depending on your industry, certain types of data are going to be more critical than others; and sorting that out first will make the entire process much more manageable.”