The amount of big data in the world is growing rapidly.Big data comes from multiple sources and presents in multiple formats such as structured, unstructured, or semi-structured. Outsourcing solutions like data entry services and data mining help businesses manage the huge volumes of information they collect and create. Big data offers many benefits for big businesses, but small businesses can leverage its benefits too. In fact, utilizing big data effectively can help small businesses get actionable insights, make smart decisions, attract more customers, get ahead of competition, and increase sales and profits.
How Big Data benefits Small Businesses
Let’s take a look at how small businesses can make use of big data.
- Identify inefficient workflows and costly processes: All business processes generate data. Applying business intelligence to data generated from product manufacturing, customer service operations, expense records, payroll operations, and client on boarding, can help identify where problems exist. Processes can then be refined and made more efficient and effective.
- Improve operations: Various techniques and strategies can be used to harness big data for a range of operations, from forecasting and inventory management to logistics management, supply chain management, sales management, and risk analysis. One of the ways small businesses such as retail companies can use big data to improve operations is to manage their stocks by using predictions made from social media and web search trends and weather forecasts. This information can help them maintain stocks of popular items, boost sales, and cut inventory waste.
- Improve customer service: Data analytics can provide an in-depth understanding about customer behavior and preferences. For example, in retail, tracking customer feedback on social media can help the business understand what interests customers, why they buy, their preferred way of shopping, why they switch, and what makes them recommend one company over another. Once small businesses get a good idea of how their customers’ preferences, they will be able to cater to their specific needs and get an edge over competition.
- Make proper pricing decisions: Big data can help small businesses make better pricing decisions. On average, a 1 percent price increase translates into an 8.7 percent increase in operating profits, according to Mckinsey. Making the wrong pricing decisions can lead to significant loss of revenue. By harnessing big data, companies can identify the optimal price that a customer is will to pay for every product. This will help them ensure that their products/services are competitively priced:
- Take the right marketing decisions: With the help of data mining services, small businesses can make informed marketing decisions. Social media has become a very valuable source of data on customer behavior and preferences. Mining this data and that from other sources can help companies identify and segment customers based on age, geographic location, educational level, and what triggers their buying decisions. This can help them create campaigns that target the best interests of each segment. This leads to more efficient resource use. Big data also allows businesses to keep track of marketing trends and make use of the information to create efficient strategies.
- Better understand competition: Using big data analytics can help small businesses better understand their competitors. While understanding competition was limited to spying and gossip in the past, businesses can now find out more about a rival’s product or service by evaluating data on. Both social media analysis and Google Trends can provide valuable information about the popularity of a product, service, or company. For instance, Businesses can search on Twitter for competitors and check out their marketing content and tactics. They can compare this information with their own brand, see where they stand, and improve their offerings to get ahead of the competition.Of course, as competitors can use the same tactics, it’s important that small businesses remain current with big data technologies and uses to get ahead.
- Recruit talent: Data offers better outreach to successful candidates, helps HRs identify the best recruitment channels, and improve efficiency in the hiring process. Data from recruitment sites, social media, and more can be analyzed to gain insights about potential candidates. HR departments also collect and use big data to track absenteeism, productivity, employee satisfaction, and personal development assessments.
While utilizing big data can provide many benefits for small businesses, there are certain challenges involved.
- Costs of collecting and managing huge volumes of data
- Inaccurate and/or outdated information
- Data stored in silos does not reveal the whole story
- Risk of security breaches
- Finding qualified data management professionals
- Developing a data-driven culture
To leverage the benefits of big data, small businesses need to overcome these challenges. Partnering with a business process outsourcing company can help them improve the quality of their data. A reliable BPO company can provide cost-effective and secure solutions to ensure that company data is accurate, well-organized, easily accessible and available in usable formats. This is crucial to optimize data analytics and gain actionable insights from big data.