“Knowledge will increase.” Three simple words at the end of a once-famous chronicle dating back to ancient Babylon, spoke of a distant future that looks a lot like now. Today’s exponential explosion of data is historically unprecedented, and shows no sign of abating. Some say that new data is doubling every year; some predict it will double every 12 hours. Whether or not they are right, the current measured increase is staggering. For the average small or medium-sized business, this is pretty daunting stuff. So, are we going to drown, or should we dive in?
The Global Datasphere Prediction
The numbers are mind-blowing. Vastly greater computing power has led to greater data generation and processing, which has fed demand for ever-more-powerful computers. Data is now being collected not just by humans and businesses, but by machines and sensors – at 50 times the pace. In 2017, International Data Corporation predicted that the global datasphere would rise from 16.1 zetabytes (a trillion gigabytes) to 163 zetabytes by 2025 – a ten-fold increase in nine years. It’s hard to fathom figures like this, as there seems to be little else around us to compare them with. Again, it’s daunting; what do we do with it?
Responding to the Oceans of Data
A quick reaction is that this is something only the big players can do. This is for the Googles, Facebooks and Amazons of the world to manage, and only they can collect, store, analyze and respond to the signals that these vast oceans of data are sending out. True, they and those like them have invested heavily in systems to collect the vast amounts of data flowing through their networks. True again, they have armies of analysts poring over the data, or alternatively, creating processes that process the data and produce insights through correlation and regression analyses – it’s a data geek’s paradise.
Knowledge is Power
If knowledge is power, then it seems that the large players indeed have a scale advantage that will inexorably increase corporate concentration, and ultimately give rise to knowledge monopolies that exclude and ultimately eliminate smaller players without the means to keep up or catch up. Some clearly believe that the Fourth Revolution will have a lot of casualties that fit this very description. Is this a sad inevitability, or is there a way that even small businesses can harness the changes?
Answering that question will take more than this missive’s single page, but here are some top-line things to think about. First, everyone wants to own a monopoly; kids experience this early on playing the game of the same name. Your firm’s data is your monopoly; nobody else owns it unless you want them to. It is your unique window on the world, and the more you have, the more insight is available for decision-making.
Second, proactively collecting this unique data is a strategic decision. It has never been easier to do, but data gathering can often be a decision that is easy to put off, in favour of more urgent, immediate business issues. Often the data is already there, and simply needs to be organized. However, data is increasingly being collected by smarter machines. Failing to invest continually in technologically up-to-date machinery cheats companies out of valuable feedback that is likely critical to operational planning. Social media is also a huge data inlet.
Third, it’s not enough to collect the data; it’s also imperative to invest in processing it. This can be outsourced, but there’s a risk of leaking out the secret sauce of the future. Increasingly there are tools that enable processing, leading to the determination of ‘next-level’ business and market trends. As time progresses, it will be more necessary – and lucrative – to onboard effective data analysis tools.
Fourth, when the insights pour in, experimentation is likely the next step. Larger companies are trying new things out all the time in an effort to prove or disprove market movements. Not all experiments will succeed, but there is no doubt that with practice, a ‘digital read’ of the marketplace will grow. Finally, it stands that successful experiments need a good execution plan.
The Bottom Line?
Among the assets belonging to a firm, data rarely makes it onto the balance sheet. Whether the accountants agree or not, data is fast becoming one of the most important business assets, as it increasingly holds the keys to future relevance. Big firms of the future already have a data strategy – and with today’s technology, it’s never been cheaper to do.