Big Data Offers Huge Potential for Smaller Companies, Intuit SaysAdded on Dec 18, 2012 by
'Tis the season for prognostications. Staring into the big data crystal ball one thing seems clear: We can expect to see the continuing growth of the Internet; wireless networks; social media; and the number of mobile devices, sensors and other digital technology that is flooding us with new data every minute of every day.
Analysts agree that organizations able to harness data stand to gain a competitive advantage. Web 2.0 companies like Google and Facebook have led the charge into the big data era--data is undeniably their bread and butter, and they have helped to create much of the technology that makes leveraging big data possible. Large enterprises, too, are poised to use big data to take their businesses to new heights. Demand forecasting, targeted marketing, fraud detection, medical research--the list of potential uses is seemingly endless.
"The growing access to this massive volume of information--and the ability to refine and analyze it--makes it a new type of raw material, on par with capital and labor," Emergent Technology and Intuit (maker of QuickBooks, Quicken and TurboTax) write in a new research report that forecasts data trends for the next seven years. "Advanced analytics will move from the domain of specialists to everyday users. Data will be a key driver of global economic growth in the 21st century digital economy, with a profound effect on all aspects of society--business, science, health care, finance, government and entertainment."
Will Big Data Create a New Digital Divide?
But what about the little guy? What about small businesses that do not have the resources to harness big data technology like their large enterprise competitors do? Will big data create a new form of digital divide?
No, says Intuit President and CEO Brad Smith. Instead, Smith says that (with Intuit's help) big data enables a new "data democracy" that will help small business owners and consumers use data as effectively as their large competitors.
"Big data has long been seen as a big opportunity for big business," he says. "We actually think that the biggest opportunity is giving consumers and small businesses the power of data. We look forward to a new era where big data benefits the little guy."
The report, The New Data Democracy: How Big Data Will Revolutionize the Lives of Small Businesses and Consumers, supports Smith's belief.
Big Data Will Help Consumers Save Time and Money
In the report, Emergent Technologies and Intuit note that the past few decades have increasingly seen risk management responsibilities shift from institutions to individuals--a trend that is likely to continue. At the same time, insurance, health care, retirement and other financial issues are growing more intricate.
"Data-driven solutions will come to the rescue, helping simplify--and even make--these decisions," the report says. "Over the next five to seven years, emerging technologies and new analytical tools will convert daunting data streams into actionable information that will ease personal decision making, reduce uncertainty and save individuals both time and money."
"These analytical tools will store, organize and analyze life's data feeds for us, aggregating anonymous information from large numbers of people to provide individuals with personalized comparisons and insights," the report adds. "Used on their own or in conjunction with advisors such as accountants, financial planners and health specialists, these data-driven tools will demystify the complexity associated with the business of life."
As early indicators of the trend, the report points to three companies that are already tapping into the new data resource to help consumers:
- Financial Engines. This firm uses cloud technologies, large financial data sets and advanced data analytics tools to help people navigate the complexities of retirement planning.
- Exmobaby. This firm creates baby pajamas with built-in biosensors that collect health and wellness data to help parents monitor their babies. The company hopes to aggregate the information into large databases on infant health and wellness.
- Parchment. This startup analyzes a large database of student profiles, including grade point averages, SAT scores and acceptance data to help students choose and apply for colleges by assessing a student's likelihood of admission to a specific school. It can also determine what a student can do to improve acceptance chances.
"Data empowers consumers," Smith says. "Navigating the maze of modern life is becoming increasingly complex. Data is going to help. Data and the analytical tools that come with it will enable individuals and households to make smarter and more informed decisions."
Big Data Will Help SMBs Know Their Customers
For businesses, Smith believes that digital data will help spark a return to the era when neighborhood merchants knew their customers and could anticipate their needs.
"We believe data is the Moneyball for small business," Smith says, referring to the book by Michael Lewis, recently released as a movie starring Brad Pitt. "It levels the playing field. It'll bring back the days of the local merchant who knew everything about you and was able to greet you by name with special recommendations based on your purchase habits. It's going to help small businesses operate more efficiently and enable local entrepreneurs to compete effectively with a company of any size anywhere around the globe."
Smith says Intuit is in a good position to help make this happen. After all, he says, it provides business and financial management services to small and mid-sized businesses, financial institutions like banks and credit unions, consumers and accounting professionals. About 25 percent of the U.S. economy moves through its products, Smith says, and Intuit users have opted to share that data with the company.
It has transactional data, behavioral data (drawn from products like TurboTax Online and Mint), user-generated data and even social data drawn from social networks and Twitter. By aggregating and anonymizing the data, Intuit is creating a massive data store that can be accessed and used by customers.
This data could be used in lots of different ways, from comparing what businesses similar to yours are paying in wages to a new hire, to finding the most cost-effective vendor for your raw materials.
"We're able to take an individual's small business and with a dashboard compare them to other small businesses that are like them," Smith says. "If you're a two-employee florist shop in Boston, we can compare you with other two-employee florist shops in Boston and around the country."
As Smith notes, Intuit has already begun the process of transforming its products to help small businesses and consumers harness the new era of big data. Examples include the following:
- QuickBooks Online's Trends feature. This feature anonymously aggregates customer data, allowing small businesses to see how their income and expenses stack up against similar businesses.
- Intuit Loan Finder. This service is a loan matchmaking service that analyzes a small business's data through QuickBooks, helping to "derisk" a loan decision for banks.
- Mint. Mint helps customers manage their financial data. It's Ways to Save engine analyzes that data and other data at Intuit's disposal to find ways to help customers save money on everything from lower credit card fees to better mortgage rates.
Thor Olavsrud covers IT Security, Big Data, Open Source, Microsoft Tools and Servers for CIO.com. Follow Thor on Twitter @ThorOlavsrud. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Thor at firstname.lastname@example.org
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