Big data is a term that describes the large volume of raw data, both structured and unstructured, that inundates a business on a daily basis. It includes information such as email messages, social media postings, phone calls, purchase transactions, website traffic and video streams. Big data tends to be commonly associated with big business, but this need not be so. The problem is often, however, that expensive tools and hardware are needed to analyse big data, and this is the realm of larger business. In fact, the increasing availability of technologies and tools as a service now means many medium and smaller companies can afford to analyse data for planning and forecasting purposes.
For example, IBM’s Watson Analytics platform is a simple and self-service application, easily within the reach of small and medium business. According to an IBM blog post, using analytic tools as a service is useful in particular for smaller or start-up companies who may not be able to afford software or afford an extra accountant needed to do the analysis or forecasting. The blog post suggests that advanced data analytics can support what it terms dynamic budgeting. To paraphrase the post, volatile markets mean few companies can prepare an annual budget and follow it. However, powerful tools are available (as-a-service) to help companies cope with this volatility. These tools include big data access and analysis, fast inmemory computing, location information and data visualization to depict the business world. From a budgeting perspective, having access to such data and tools can provide valuable insights to improve budgets and forecasts. For example, it may help companies identify consumer trends or reveal how customers interact with a company’s products or services. Such examples can alter how resources are allocated in budgets, normally for the better.
Questions:
1 Can you think of an example of a business process/area where data analytics could help a small/medium company budget/plan better and achieve cost savings?
2 Could big data/data analytics help in the preparation of production budgets in small/medium companies?