Big data and analytics market growth is far outpacing overall IT market growth, and that means the need for IT professionals who know what to do with the piles of data collected by businesses is growing just as fast. In fact, the McKinsey Global Institute predicts as many as 190,000 data scientist positions in the United States will remain unfilled by 2018. On top of that, some 1.5 million managers and analysts will lack the skills to understand and make decisions based on big data analysis.
“To capture the full economic potential of big data, companies and policy makers will have to address the talent gap,” McKinsey says. Otherwise, there will be a lot of unfilled potential in U.S. businesses to leverage big data and analytics to hone processes, develop new products, accelerate go-to-market strategies and measure customer sentiment.
The sector most likely to suffer from this skills shortage is the SMB market, which typically lacks the resources to vie for talent against large, deep-pockets competitors. For organizations in that situation, the answer could be to partner with a managed services provider (MSP)--one that delivers easy-to-use data analytics tools that enable SMBs to compete at the level of the big players.
And the time to act is now, since the big data and analytics market is poised to grow at a 26 percent yearly rate to $41.5 billion in 2018, six times faster than the overall IT market, according to IDC projections. That means if you can’t figure out how to leverage data analytics soon, others surely will – and some of them might just eat your lunch.
Pressure to Compete
A small business typically has no CIO. The company may employ an IT manager, but in many cases owners and CEOs fill the role as they spin different functional and tactical plates simultaneously in a precarious balancing act to prevent overspending and keep the business solvent.
While corporations employ CIOs and full tech-savvy teams to focus on infrastructure, innovation, integration and intelligence, SMB leaders don’t have that luxury. Thinking about analytics and its potential benefits may be a plate too many for the SMB owner/CEO.
Often, it’s the head of sales or someone in marketing – if there is a marketing department – who starts to wonder how analytics could help the business. And it’s usually someone who is feeling some sort of pain, a person who sees sales projections are chronically inaccurate, costs are spinning out of control, inventory management is shoddy or customers are just plain unhappy.
The individual starts thinking about how to make things better. Inevitably those thoughts turn to data analytics – how to jump on the “digital transformation” bandwagon and leverage technology to optimize business processes, set strategy, satisfy customers and ultimately boost profits. If SMBs are to compete with big corporations for customer mindshare, this is something they can’t ignore.
“Analyzing large data sets – so called big data – will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus as long as the right policies and enablers are in place,” according to McKinsey.
Using the Data
To even compete with – never mind outperform – large corporations, SMBs must hone their focus on the last I in IT – intelligence. They need to figure out how to glean insights from the data, and apply that intelligence in various ways within the company’s infrastructure to innovate and compete.
Partnering with an MSP is a good start, as it gives them access to analytics tools that would otherwise be out of their reach, but that isn’t the end of the story. Company leaders must do their part. They have to assess the types of data they are collecting, figure out where that data is landing, and determine what types of information they must create.
For instance, insights from financial data might highlight a small manufacturer’s losses due to overstocking certain products or parts, or the amount a field services business wastes in fuel from letting vehicles idle too long. HR data could shed light on the healthcare costs of a small retailer, legal firm or service garage as a percentage of personnel expenses.
Operational data can be especially illuminating and, if executed on properly, truly transformational. Take a hospital setting where keeping refrigeration units at certain temperatures prevents blood supplies from spoiling. If the temperature changes, by the time somebody notices it, the blood could be ruined. But if the units are equipped with sensors that send alerts to a dashboard in a central location or the smartphones of nurses, someone can react immediately to prevent spoiling.
Or take the example of a vineyard operator that uses sensors to detect an oncoming freeze and prevent grapes from getting ruined by activating sprinklers that cover the fruit in ice, preventing it from spoiling.
Whether operating in the hospital or among the vines, developing a solution requires knowing which data to analyze and how to convert information into action. The result is a better-run operation that has figured out how to avoid waste. To get there, company leaders must do their part in helping to get at the data and determining how it can help the business.
In order to derive value from data analytics, an organization has to employ data mining and analytics tools that deliver business intelligence in easily digestible formats--be it reports, graphical representations of patterns and trends or heat maps highlighting demographics and geographic areas relevant to business goals.
There is also a critical element to data analysis beyond technology – human capital. Be it in the form of a database administrator, data architect, data analyst, programmer, or a combination, these roles fill gaps that might prevent a company from getting at the data and gaining an in-depth understanding of what the data is telling them about the business.
There is a depth of experience needed to succeed, combining familiarity of the pressures and dynamics affecting small businesses with the strategic thinking and operational practices of a large corporation. In a recent study, 37% of business executives said their biggest IT goal is to improve responsiveness to constant changes in business requirements, and 31% acknowledged they need to focus on digital experience to gain a competitive advantage. These numbers show executives need substantial help in these areas, while 84% of them (the study also found) are trying to get a handle on the strategic implications of new technology.
Having data analytics expertise on staff in the coming years will be difficult for SMBs due to the looming talent shortage, as discussed above. For small businesses, the answer could be partnering with the right MSP. For the most part, MSPs are small businesses themselves, founded by former technical or business-side employees of large corporations. They understand both worlds and have the requisite experience to help small businesses capitalize on data analytics to give large competitors a run for their money.
The time to jump on the big data/analytics bandwagon is now – no matter the business size or industry focus. SMBs especially ignore this escalating imperative at their own peril – but they need not run this risk. By taking the right steps now, SMBs can start transforming into a data-driven business in a matter of weeks. By partnering with an MSP that can provide the resources and know-how to get at and sort the data, SMB leaders can focus on how to apply the information to strategic decisions that boost competitiveness and profitability.
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