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SMB analytics: Deconstructing 3 small business predictions for 2013

Posted by Bala Deshpande on Tue, Dec 18, 2012 @ 09:10 AM

The SMB group recently announced their Top 10 SMB Predictions for 2013 and there were three predictions which are very appropriate for this blog as they pertain to analytics for SMBs.

Prediction 7. Cloud cover expands. This prediction highlights the adoption of cloud among SMBs. The interesting thing about this is that their survey found that "plans for cloud overtaking plans for on-premises implementation in selected solutions areas, such as marketing automation". However when it comes to cloud adoption in analytics, for SMBs, the use case has to be simplified to a great extent. cloud based analytics for call centers

Consider for example, the evolution of call centers. The traditional models of inbound call center and outbound call centers have been integrated into a single cloud based virtual contact centre. An inbound call center exists to take calls from outside customers or clients, usually in regard to customer service enquiries. An outbound call center (opposite of an incoming centre), is set up for agents to call up customers – or potential customers using a Dialer, a computerised system that auto-dials groups of numbers. Such call centers exist primarily for business activities such as telesales, customer retention, polls or surveys, as well as for chasing up payments. These virtual cloud based call centers are often coordinated by just one person, and run by a variety of high-tech applications. These are characterised by their high level of interactivity and automated processes, some of which have already been mentioned. This sort of call center is perfect for SMBs that don't have the budget or the inclination to build or lease their own dedicated call centre office with all the infrastructure, easy analytics and seamless integration with the rest of a business's computerised operations.

The point of the above example is that the benefits of cloud based analytics must be as clear as that of benefits from a cloud based call center in order to gain solid adoption. 

Prediction 8. The Big Gap in Big Data Grows for Small Businesses. A very similar logic applies to the adoption of big data for small business. Once again, the SMB group prediction ... "Our 2012 SMB Routes to Market Study shows that medium businesses are taking the steps needed to turn the information fire hose into actionable business insights, with 57% of medium businesses having purchased/upgraded a business intelligence/analytics solution in the past 24 months, and 49% planning to do so in the next 12 months. However, small businesses are hard-pressed to follow suit: just 18% of small businesses have purchased/upgraded a business intelligence/analytics solution in the past 24 months, and only 17% plan to do so in the next 12 months. To make big data relevant for small businesses, BI and analytics vendors will need to up education regarding relevant use cases and key performance indicators, and provide streamlined tools that integrate easily with the business applications small businesses already use."

We whole heartedly agree with this prediction/statement. The value of big data for small companies can come from two distinct areas:

  1. responding to customer needs based on social media interactions
  2. data mining the exhaust from web-based or manufacturing processes.

An interesting example shown in a new McKinsey report on manufacturing innovation, demonstrates how the use of big data helped to swing the price negotiation advantage back to a manufacturer from a group of large customers, which may be very instructive for many SMBs. But unless we as analytics providers demonstrate compelling evidence via use cases, big data for small business will remain a big dream.

Prediction 1. Progressive SMB sprint ahead of Peers

While we fully agree with the logical conclusion of this statement, it is somewhat hard to understand why they would call it a prediction. At the heart of this prediction is a slightly confusing conclusion: “In 2011, 81% of SMBs that planned to spend more on technology, forecast revenue growth for 2012, while only 45% of SMBs with flat IT budgets, and just 34% of those with decreased IT budgets expected their businesses to grow.” The way one reads this is as follows: companies which were bullish about their revenues planned to spend more on technology. Companies which were not so confident of growing their businesses either didn’t want to spend on new technology or worse scaled back on their current spending on technology. This happened in 2011 and according to a more recent survey is also going to happen in 2012. Fair enough. But being involved in predictive analytics, we find it hard to consider the current title as a “prediction”. A prediction that supports the title would have been “Progressive companies that invested more on technology in 2011 achieved higher revenue growth. We therefore predict that companies which will achieve higher revenue growth in 2013 also would have made more technology spending”. But that is not what the survey is stating.

However, the truth of the statement does stand. Our own anecdotal experience in developing custom analytics apps for SMBs reflected the conclusion from the above statement (not a prediction!). We found the same trend: Some of our customers were extremely busy in 2012 and expect to be busier in 2013 and these are the ones who want to spend time and resources streamlining their business operations with new analytics tools, for example. Another one of our customers lost a very big client (a popular bookstore, which went under) and surely enough we are not expecting this customer to increase his spending for a new app!

Our new partner VOZIQ is helping us roll out affordable social media analytics for small business.

Topics: technology reviews, SME analytics

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