AWS Smart Business Blog
Data-Driven SMBs Financially Outperform Their Competitors—and the Gap Is Widening
Small and medium-sized businesses (SMBs) are engines of innovation, capable of doing a lot with very little, and they’re always looking for new ways to gain a competitive edge. In hotly contested markets, the success of any business relies on its ability to differentiate itself. It’s why excitement around artificial intelligence (AI)—especially generative AI—has reached fever pitch.
For SMBs, the pull of generative AI-powered tools like conversational chatbots and coding companions is strong. The promise of empowered, productive teams, happy customers, and continual innovation is enough to attract the interest of any ambitious small business owner. But any AI solution is only going to be as strong as the data quality it’s trained on. SMBs that are eager to adopt AI should first consider how to build a mature data foundation, backed by a well-defined data strategy.
Becoming more data-driven is its own reward, delivering organization-wide benefits beyond the acceleration of AI adoption. Highly data-driven SMBs consistently financially outperform their competitors—and the gap is widening.
A recent study by S&P Market Intelligence, commissioned by Amazon Web Services (AWS), revealed by just how much. Here are some of the key findings:
Most highly data-driven SMBs financially outperform their peers
Data helps SMBs remain profitable and cost-efficient in the face of uncertainty, market turbulence, and evolving customer expectations. 65 percent of highly data-driven SMBs financially outperform their competitors. That’s almost twice as much as less data-driven SMBs (33 percent).
SMBs that make data a strategic priority gain a competitive edge because they can make decisions based on evidence, not intuition or guesswork. For example, they can anticipate customer needs and deliver more personalized experiences, plan for the future with accurate forecasting, and automatically detect security threats.
When SMBs let data flow through their organization, and make sure those that need it can access it, the benefits are profound. The study found that highly data-driven SMBs are roughly twice as likely to experience positive impact from data across key business outcomes than less data-driven competitors: Customer satisfaction (69 percent compared to 37 percent); revenue (65 percent compared to 34 percent); process efficiency (65 percent compared to 32 percent); marketing (61 percent compared to 27 percent); cost reduction (55 percent compared to 25 percent); and reduced risk (50 percent compared to 20 percent).
Highly data-driven SMBs will lead the pack for the foreseeable future
Highly data-driven SMBs forecast far more positive impact across the same key business outcomes than their less data-driven competitors. For example, 65 percent of highly data-driven SMBs anticipate data positively impacting marketing in the next two years, compared to just 33 percent of less data-driven SMBs.
Exactly how much value an SMB receives from its data directly correlates to its level of data maturity.
A mature data strategy is a potent competitive advantage
Sixty percent of organizations with a mature and comprehensive data strategy financially outperform their competitors. Only 24 percent of those still in the early stages of developing their strategy can make the same claim.
SMBs with a high-level of data maturity can harness their data more effectively, empowering both data managers and data consumers alike. A robust data strategy is a key component of data maturity, and directly impacts an SMB’s likelihood of outperforming competitors.
In addition, a mature data strategy is an essential part of building a data-driven culture that encourages cross-team collaboration. It also means more robust data governance and compliance, reducing risk. Plus, SMBs that have more historical data to work with benefit from more accurate forecasting and customer segmentation.
Highly data-driven SMBs adopt AI at twice the rate of less data-driven competitors
AI delivers transformative benefits for SMBs, with key areas of value being customer satisfaction and experience, IT operations and security, and content creation and data analysis.
Fifty-two percent of highly data-driven SMBs are using AI to keep their business secure through automation. For example, communication analysis can automatically detect and remediate threats like phishing.
Highly data-driven SMBs are also using AI to enhance marketing and advertising (41 percent), as well as content creation (53 percent). AI can significantly improve personalization and customer segmentation, and generative AI greatly accelerates content generation—be it articles, social posts, images, and more.
48-57 percent of data-driven SMBs report moderate to high positive impact from AI across the following key areas: process efficiency, marketing, market share, revenue, customer satisfaction, cost reduction, and risk. Only 21 percent of less data-driven SMBs could make the same claim.
Put simply, SMBs with a high level of data maturity that have invested in AI adoption yield approximately 30 percent more value from the technology.
Becoming data-driven is an opportunity most SMBs are yet to seize
As hype around AI rumbles on, it can be tempting for SMBs to race towards implementation—but that’s rarely the best course of action. As the report shows, investing in becoming highly data-driven delivers significant value across key business outcomes, and leaves SMBs in a strong position to adopt AI when the time is right.
Yet only 19 percent of SMBs consider themselves highly data-driven, despite the quantifiable value it delivers. That means the majority of SMBs risk missing an opportunity to outperform their competitors, differentiate their business, and significantly improve decision-making.
There’s never been a better time to start building data maturity. Affordable access to the cloud infrastructure, tools, and services is enabling SMBs to develop comprehensive data strategies, backed by modern architectures like data lakes. With a strong data foundation in place, SMBs can take full advantage of exciting technologies like generative AI and transform how they operate, sell, and innovate.
Data is the differentiator for SMBs, building data maturity is worth the investment, and for the majority of SMBs, is an opportunity waiting to be capitalized on.