Make way for big data

(Photo: Illustration by Caleb Olson)

For many years the concept of big data meant many “bigs” — namely big cost, big companies and big infrastructure. But now the prevalence of data analytics services means that only the big data part remains, because small- and medium-size companies can easily and affordably take advantage of data crunching to push their businesses ahead.

Today’s world is awash in increasing amounts of data, so much so that sorting through it all has become a necessity for any business, big or small. According to an International Data Corporation study, there will be 44 trillion gigabytes of data available by 2020, which is ten times more than today. The concept of big data often is defined as data that is useful to businesses, which IDC finds is currently about 22 percent of all data but will rise to 37 percent in five years.

Data analytics has traditionally been about sorting through data sets too large and complex for most companies to handle in house, a challenge compounded by even larger data sets. While application of data analytics to business models and strategies varies from company to company — from improving product quality to enhancing marketing operations to cementing customer relationships — the fact remains there’s more and more information out there that can be useful for the smallest of operations.

What’s important to understand here is that the growth of “big data” isn’t as important as the usability of data to owners and managers. The goal is improving productivity, competition, and innovation, via smarter decisions grounded in solid evidence.

This is the approach that Erick Brethenoux, director of IBM Analytics Strategy, advocates. Crucial insights can emerge from data analysis, applicable to companies with hundreds of millions of customers managing vast amounts of information, to those of more modest scale.

Brethenoux dispels the myth that you need large amounts of data to get effective results from data analytics. You can start even with a small amount. It’s not about the volume. It’s about the relevance.

“The problem is always the same — it is about understanding clients,” he said. “How do you keep them? How do you serve them better? What do you cross sell to them?”

IBM Watson Analytics is a system designed for businesses, particularly small- and medium-sized businesses, to leverage cognitive, predictive, and visual data analytics in ways that are accessible and effective. “Our goal was to simplify analytics to the maximum so you can take advantage of the technology without needing a Ph.D,” said Brethenoux.

Another goal of Watson Analytics is to make the system entirely cloudbased, an increasingly more common approach to record keeping, basic infrastructure and other business operations can lower costs and increase agility.

For example, companies can begin using Watson Analytics for free and then, as they scale up, make payments pegged to different levels of use.

“You don’t have to invest millions to start to get results,” said Brethenoux.

When the cost concerns about how to handle data and data analytics are alleviated, businesses can then focus on the important matter at hand, which is how to make their companies more evidence-based — and improve the bottom line in doing so.

But numbers alone mean little. What’s important are goals, targets, market segmentation, performance variability, and desired outcomes and impacts, which data can help them discern.

David Dietrich, director of technical marketing for EMC’s Big Data Solutions Group, says most clients have a generalized idea that data analytics can make their business better, without knowing the specifics of just how and why. That’s why the first step he takes with clients is to figure out exactly what a business wants to understand. For example, a retail business may wish to gain intelligence on the buying patterns of customers based on their web behavior and activity, as well as more traditional forms of consumer information, so as to offer services or discounts tailored specifically to current needs and aspirations. This could have a direct impact on buying decisions — and lead to more sales for the company.

Sounds simple, but this multimedia process now involves many platforms, including video, social media, phone conversations, and point of sale transactions. That’s a lot of information, which may prove daunting for most firms but is a specialty of EMC.

Trends and patterns

Dietrich believes that small companies can benefit from big data more than they might realize, based on the kinds of consumer preferences, trends and patterns that emerge.

“I have heard from a lot of different people that they are finding a lot of opportunities to reinvent themselves in big data,” he said.

Another player in this exploding field is Cambridge-based InsightSquared, which targets smaller businesses.

“Our goal is to help specifically small- and mid-sized companies run their businesses by the numbers,” said InsightSquared CEO Fred Shilmover. “Our goal is to make these businesses more analytical.”

InsightSquared is the embodiment of the big data shift away from the emphasis on the ability to handle massive amounts of data to the kinds of accessibility, application, and ease of use articulated by IBM’s Brethenoux. The InsightSquared system handles performance metrics in sales, marketing, service and staffing, the kind of information that can make or break a company.

InsightSquared occupies the niche in the so-called customer relationship management (CRM) realm, so crucial to company growth.

With a monthly cost as low as $250, Shilmover says his company can help grow the customer base by at least 10 percent. That’s a big deal for small businesses that never have examined numerical and text-based information on customers and transactions. Doing so can help segment customers systematically and effectively, and tailor products accordingly. That’s good for the bottom line.

Although this seems obvious, Shilmover says plenty of small businesses are still in the dark about how easy it is analyze data and how important that is for competitive performance

But he says that attitude is changing.

“If you are an analytically-driven small business right now you can get a competitive advantage. I think in five years it will be table stake, you will be left behind [if you are not analytically driven],” said Shilmover.

IBM’s Brethenoux sees a bright future for data analytics for all businesses, big and small. As more and more businesses and entrepreneurs become aware of the benefits, they will integrate it into companies on an ongoing basis — which is good news for data analytics providers.

In fact, that’s already happening.

“Adoption is ramping up quite significantly,” said Brethenoux.