For all the technological opportunities open to them, mid-market businesses are still wary of taking big leaps into the world of data mining. Within the bits and bytes zipping around their networks lies value, yet finding it involves expenditure, time and potential security issues.
In a recent study, information management company Iron Mountain and consultancy PwC found that, compared to larger organisations, mid-market firms were not as keen to carry out analysis on their information systems for business benefit. More than 30 per cent of enterprise firm respondents claimed that using data to drive innovation was a priority compared to only 21 per cent of mid-market firms
Businesses are much more concerned about protecting data on their systems rather than exploiting it, according to Christian Toon, head of information risk at Iron Mountain. “While many businesses claim to understand and harness value from their information, their information priorities are overwhelmingly passive and protective,” he says.
“They are more concerned about avoiding a data breach and litigation, or fines for non-compliance or enhancing existing processes. More active uses, such as reaching new customers and markets, and using information to drive innovation fall to the bottom of the priority list.
This tentative approach is likely to be borne out of the lack of financial reserves to deal with punishments resulting from a significant breach and fear of exposure to reputational damage, Mr Toon adds. “A €500,000fine could mean the end of the business.”
If mid-market organisations that haven’t taken the plunge want to make the most of their digital assets, they will have to start by looking at how they collect and store information before adding the analysis tools on top.
There are various options on the table, from sticking with in-house technology that can be more expensive, but carries less risk, to the cloud, which does the opposite. Mid-market companies shouldn’t just jump into either, but align the decision with their overall growth strategy, says Clive Longbottom of analyst firm Quocirca.
“If you have worries about data security and the cloud, you will naturally default to on-premise. If you are hosting your application in the cloud or using software-as-a-service, then your data should be in the cloud for performance reasons and therefore your analytics should be near to the data for the same reason,” he says. “We believe that increasingly cloud security and availability will trump in-house, on-premise capabilities, making the best place for apps and data to be in the cloud.”
REVENUE FROM DATA
Though startups are seen as the hottest technology users around, due to their agility and ability to adopt fresh projects at speed, mid-market firms have the benefit of sitting on technologies and information that are prime for opening up fresh revenue streams.
Lee Frater, digital growth manager at the Business Growth Hub, an organisational support body in Manchester, has seen numerous mid-market firms use this to their advantage. She points to an events and travel company that designed its own back-end booking system and decided to set up a separate software development house as demand for their product was significantly higher than expected. That new business is now helping provide additional growth in a completely new sector.
Mid-market firms have the benefit of sitting on technologies and information that are prime for opening up fresh revenue streams
A textiles manufacturer, meanwhile, integrated mobile technologies into all their retail outlets to engage both staff and clients. “They used mobile to create camaraderie among their remote working staff and to tap into bespoke online e-learning platforms to provide on-site training, ultimately driving staff retention,” says Ms Frater. “Alongside this they also look at using mobile devices to drive on-site purchases with clients, backed up by a clear data strategy.
“If an existing product is out of stock, they are capturing the sale with the client at the point of contact. As the system develops, the data analysis means the organisation can intuitively know which products are more popular.”
Such anecdotal evidence is positive. But for mid-market firms to truly thrive using technology and the data it creates, more of them would be wise to adopt such progressive approaches, ones that look to mould the business with the future in mind rather than the past. “Today’s needs are far more for predictive capabilities so the business can re-align itself as needed, rather than be forever fighting fires,” Mr Longbottom concludes.
BIG DATA FOR MID-MARKET
London-based Cognia sits right in the middle of the big data world. On the one hand, as a provider of voice recording solutions to a range of industries, it’s giving companies the infrastructure they need to collect telephony information and probe it for insight. There are various patterns that can be gleaned from the masses of data coming into and out of call centres and offices via the telephone, whether it’s a standard or internet-connected line.
Sales staff are constantly on the phone and though businesses know how well they perform in terms of deals sealed, they have limited understanding of why they succeed or fail. This is where Cognia’s cloud-based big data service comes in handy, collecting every word said and then attempting to correlate certain phrases with wins and losses. This form of emotional analysis has been used to help businesses tweak their sales training so they can determine when a contact is either interested or needs more enticing, creating a kind of virtuous cycle.
Cognia has also helped on projects to determine what typical spikes in activity are likely following TV advertising. By collecting big buckets of data and throwing them up to the cloud, it was able to help customers predict upticks and downticks in traffic.
The company’s vice president of technology Nick Hills says most mid-market firms he sees doing big data are looking to the cloud. “On-premise can be hugely expensive – a lot of firms can’t afford to do that,” he says. “It doesn’t make economic sense for them to do it.”
Meanwhile, Cognia is itself a user of big data services. Just recently, it’s been using services from big data provider Splunk to combine weather data with call information. After some analytics work, it found more calls were coming in from its customers on sunny days. They determined that many were taking time during extended breaks in the sunshine to make calls on their mobile. This has now helped it alter operational process to ensure it has the right capacity when the lines get busy.