Mining for Gold: How Big Data provides a roadmap to growthJan 24th, 2020
By Colin Thornton, MD, Turrito
Over the past several years, business owners have been bombarded with technology buzzwords – all of which have carried the promise of driving business efficiency. Big Data, for one, has been hyped up and hailed as a game changer for every sector – with media articles throwing out impressive statistics around the volume of data that businesses and individuals generate daily. But for many business owners, and particularly for those in South Africa where we are slightly behind global trends such as cloud computing, machine learning and analytics, this hype has failed to translate into practical use cases…
Why? Well, for one, the skills required to harness Big Data have been hard to find. IT skills are notoriously lacking, both in South Africa and indeed, globally. In addition, the applications and systems needed to implement Big Data solutions have been too expensive and intricate for many small to mid-market companies. Many would argue that this is the primary reason for the historically slow uptake of Business Intelligence (BI) and Data Analytics in South Africa.
The good news…
This scenario is changing fast. Today, with the rapid development and introduction of new and highly accessible software-as-a-service (SaaS) solutions, business owners and leaders are now able to incorporate BI tools to draw valuable and insightful data from within the organisation. By harnessing this data, they can make far more informed and proactive decisions – and thereby drive business efficiencies and bottom-line growth.
‘Democratization’ of data
Unlike in previous years when BI solutions were thin on the ground, today there are many highly accessible BI and Data Analytics tools available. Importantly, you don’t need to hire data scientists or actuaries to get the best out of them. For example, Microsoft’s PowerBI and Flow (available in many of the business and enterprise versions of Office 365) can be designed and implemented by consultants and then adapted and maintained by normal users.
Put simply, these kinds of tools can extract valuable data across your organisation’s data sets to analyze information in real-time. This type of ‘data mining’ solution can be implemented regardless of the size of your organisation, or the sector in which it operates.
Yet the most exciting part of this equation is not about the data mining. It’s about the ability to pose questions you may never have thought to ask! Indeed, real BI solutions create the most critical questions for you – and then answer them with the irrefutable power of data.
For example, you will better understand your sales teams, staff productivity, customers’ buying habits and which are your most profitable divisions / products. You will discover efficiencies that remove costly overheads and streamline operational costs.
The best news? You might even fundamentally change the strategic direction and vision of the business itself!
Seeing through a different lens
Yes, by leveraging BI and Data Analytics, many business owners have actually realized that what they believe their business does (in theory), turned out to be very different in reality.
For example, let’s look at a software development business that specialized in custom software solutions. They would build highly niche software solutions that typically cost a considerable amount of money to deploy. Given that the capital outlay for their clients was prohibitively high, they launched an in-house finance solution – turning the Capex model into an ongoing (annuity) Opex model. Their focus and mission, however, remained software development.
Yet when this company implemented BI solutions and leveraged their data, they very quickly realized that they were, in fact, more of a finance house than a software development company. Critically, the analytics and BI revealed that their company makes far higher returns, and scales far better, from financing their software than from selling their software. As a result, they have subsequently expanded their financial offering far beyond just their in-house software packages – to include 3rd party software and even hardware, which has significantly accelerated their business growth.
In this scenario, the BI tools were able to quickly separate their perceived business (software development) from their actual business (a financed opex platform) – and thereby drive growth and profitability.
What might you discover about your own business?