Research Question: How does implementation of Big Data analytics influence SMEs performance in the United States?
In the recent past, big data has received significant attention due to its ability to influence the quality of the decision-making process. The modern technological–oriented world presents unlimited opportunities that play a critical role in enhancing decision-making capabilities and increasing a firm’s competitive advantage (Shahbaz et al., 2020). While technological innovation has presented a firm with unlimited data, the ability of the firm to disseminate the data and identify hidden patterns, market trends, and user preferences is identified as the most critical aspect. By definition, big data refers to combining unstructured and structured data collected by a business that grows exponentially (Ram et al., 2016). Therefore, big data analytics is analyzing big data collected through various sources such as videos, sales entries, social media content, and sensors. Though big data analytics has unlimited benefits, most companies, especially SMEs, fail to successfully implement analytical and technological frameworks to harness the potential benefits possessed by big data. This paper will seek to establish the influence of big data analytics in the performance of SMEs in the united states.
Today, big data is not a monopoly of organizations with massive budgets. Small businesses can take advantage of the considerable offline and online information to make strategic data-driven decisions that guarantee their business growth. Although most studies in big data revolve around big enterprises with access to resources needed in the implementation, such as research firms and data scientists, SMEs can also collect, analyze, and disseminate the available data (Sen et al., 2016). As such, SMEs should consider various factor when selecting their big data analytic solution, including flexibility, simplicity, and cost (Coleman, 2016):
- Big data analytics for small businesses should allow businesses to select the functional capabilities and optimize on already installed systems.
- Besides, the big data solutions for SMEs need to ease the implementation and application process. The system should not require extensive training to equip employees with the necessary skills.
- The cost is a critical factor in selecting the right big data solution for SMEs.
The available big data remedies that can ensure optimal performance of SMEs include Canopy labs, IBM’s Watson Analytics, InsightSquared, Google Analytics,
Big data analytics can help organizations exploit Big data capabilities to enhance customer satisfaction, optimize supply chain management, improve competitive advantage, and provide the updated insight necessary in making crucial business decisions. According to Tankard (2012), small-scale retailers that use big data can achieve a 60% increase in their operating profit margins by using customer data to influence customer choices to increase market share. There are five primary benefits of SMEs implementing big data analytics. Firstly, the technology increases business visibility as it makes data more accessible. Second, it supports performance enhancement by ensuring accurate collection and analysis of data; Besides, the technology helps businesses identify the actual needs of their customers. Third, it also generates new business models, services, and products. Finally, it uses automatic algorithms to create significant insights that complement the small business owners’ decision-making process. Indeed, one of the essential uses of big data analytics is the creation of knowledge and the cultivation of new management and economic principles.
Big data analytics can enhance the management of various aspects of the supply chain, such as supply chain planning, supply chain effectiveness, risk management, inventory control, real-time customized service, and market intelligence (Ram et al., 2016). Besides, big data can stimulate innovations in the supply chain and enhance collaboration between sub-firms to optimize operations cost-effectively. SMEs can use big data solutions to generate accurate market and industrial forecast. It assists firms obtain new insights into their consumer needs and behaviour. The technology, enables small businesses to disseminate customer behavior and experiences collected using various electronic devices such as laptops, tablets, and smartphones (University of Sandiego, 2020). A small company owner may increase the success of their marketing strategy by analyzing performance data and identifying actions that create the most income and sales. Furthermore, through big data analytics, small businesses can convert social media information into revenue.
Although big data analytics can assist organizations in attaining competitive advantage over the competition, opposers outline several challenges that limit the application of the technology. Notably, studies indicate that more than 50% of small business owners believe in big data in organizational transformation; however, only 45 percent use the technology (University of Sandiego, 2020). The most vital challenge cited by opposers of big data includes the resource shortage, particularly among SMEs (Ram et al., 2016). Indeed, limited financial resources are a significant barrier that increases SMEs’ cautiousness toward innovations.
Similarly, the increasing shortage of qualified data analysts in the modern labor market is also a significant challenge that makes big data analytics inaccessible to SMEs. Indeed, studies show that, unlike large corporations that can afford the high salaries demanded by scientists, SMEs cannot afford such wages, which is a significant challenge in implementing big data analytics (Coleman, 2016). Furthermore, there are concerns about the technology’s security and privacy issues (Ram et al., 2016). However, small businesses can overcome the challenges and reap the benefits of Big data. According to statistics, 60 percent of SMEs implemented Big Data solution in 2018 an increase from 19 percent in 2015, indicating that business owners have realized the technology’s unlocked capabilities (University of Sandiego, 2020). Moreover, big data solutions are cheap to implement in today’s market and do not require highly trained data scientists for analysis. Besides, modern cybersecurity guarantees the security and privacy of the data.
Big data analytics provide small business owners with multiple opportunities that can enhance productivity and business value. It enables SMEs to detect new elements through data analysis and identifying patterns, trends correlations impossible to locate without technology. Despite the considerable cost needed in the implementation, the modern innovations present SMEs with flexible and cost-friendly solutions.
