Why Small and Medium Businesses Are Missing Out on the Full Benefits Data Can Provide

In a world where organizations and consumers generate data non-stop, many small and medium-sized businesses (SMBs) have more information than they know what to do with. While many SMBs like yours have begun to move this data to the cloud, much of it remains largely siloed and disconnected. This means the data can provide only a piece of the picture, rather than a complete view. The full potential of the data is unrealized, leaving businesses with missed opportunities.

To drive innovation, empower better decision-making, and reduce costs, all data must be centralized—or connected across the business. By migrating to the cloud, businesses of all sizes—not just large enterprises—can access the right tools to analyze data and gain fresh insights.

Amazon Web Services surveyed more than 800 C-suite executives, VPs, and directors from SMBs across the globe to understand how they are using data. Results from the survey indicated that SMBs face several challenges when it comes to managing and analyzing data, but also have huge opportunities to gain insights and take their businesses to the next level. View infographic for visual representation.

What’s preventing SMBs from getting more value out of their business data?

Our study revealed there are three possible reasons why SMBs are not using data to its fullest potential. Let’s explore the most common challenges non-technical business leaders are facing:

1. They lack data education

According to the survey, more than half of SMBs don’t have the knowledge or the experience to use data to drive growth, leaving them stuck wondering what to do. SMBs have data but often lack experience in data management and don’t know what tools can convert information into insights. SMBs are also inundated by multiple types of data, including customer data, operational data, and product data, provided in both structured formats (ex: spreadsheets) and unstructured ones (ex: images, videos, and chat conversations). Without the right knowledge, experience, or tools connecting all of this data, deriving value from it is a challenge.

2. They are storing data but not using it

While many SMBs are migrating data to the cloud, we found that only 35 percent of them also use cloud-based analytics—revealing a huge gap between storing data and extracting value from it. Migrating to the cloud is an essential first step, but the cloud is so much more than storage. With the right tools, the cloud provides an opportunity to first collect, then convert data across the company into powerful insights.

3. They don’t understand how their data can help their business

More than half of SMBs struggle with comprehending what is available to them. Our survey found that 53 percent of respondents don’t know what insights their data could provide, and 52 percent don’t understand the ROI that analytical tools could deliver. Without understanding the value of data, it’s difficult for organizations to use it.

Using data to drive SMB growth and scale: a missed opportunity

Although most (90 percent) of our survey respondents say they are modernizing their approach to data management, only 42 percent are investing in data to drive growth. This presents both a huge gap and an opportunity for the 58 percent who aren’t yet investing in data as a growth-driver to learn from those who already are.

Here are the top areas of focus for the SMBs who are investing in data to drive growth:

• Developing new products, services, and markets (57 percent)
• Improving existing products and services (55 percent)
• Improving productivity and efficiency (52 percent)
• Driving business growth in new markets (51 percent)
• Driving sales and marketing (49 percent)
• Reducing costs (35 percent)

A large percentage of these businesses are prioritizing product and service development, while traditional growth-drivers such as sales, marketing, and new market entry are lower on the list. And by developing new products or improving existing ones, businesses can maintain a loyal customer base that grows as they acquire new ones.

Alternatively, businesses that aren’t using data to drive growth are at a competitive disadvantage. With fewer insights, these businesses face more uncertainty. And while experimentation can be a great way to start a business—to test a hypothesis, fail fast, and learn quickly—it is not a sustainable way to grow.

This is where data can add the most value. It gives businesses the insights to make better decisions around lowering costs, improving agility, and fast-tracking innovation.

Why migrating data to the cloud is the first step for SMBs

Businesses can start to gain valuable insights from data by migrating and analyzing data in the cloud. But they shouldn’t stop there. Working with a technology partner that provides the capabilities for an end-to-end data strategy can help businesses meet their needs—now and in the future. Removing the burden of managing complex sets of data means teams can spend less time organizing information and more time getting value from it.

How a tech partner helps solve data challenges if you lack in-house IT staff

The right technology partner can provide businesses of all sizes with the right tools to generate insights from data. If you’re like most SMBs, you outsource your technology needs to a managed services provider or hire consultants as needed. AWS offers a variety of integrated services to help you address growth challenges:

1. Providing practical knowledge

Businesses should work with a technology partner who can provide the practical knowledge and expertise that their teams need to move forward and accomplish their goals. At AWS, we offer a variety of engagement plans depending on your needs whether they’re long- or short-term. For example, if you need support for a quick cloud data project, you can hire an AWS Certified freelancer within your budget and pay them through your AWS account. We also provide ongoing expertise, including self-paced training courses and free immersion programs for SMBs.

2. Making it easy to store and use data

In addition to data storage, businesses should work with a technology partner that also offers advanced data analytics capabilities. For example, Machine Learning can help organizations identify data patterns and automate decision-making across large, complex data sets efficiently and affordably, compared to traditional data analysis methods. Pattern-led predictions—such as estimated spend per order—can improve business decisions and reduce costs associated with customer retention, while driving more personalized user experiences.

3. Improving visibility across the business and revealing new opportunities

A unified data infrastructure can help businesses gather and store data, and make it accessible across the organization. Connected, accessible data improves visibility into a company’s products, processes, and services. As a result, companies can more quickly develop and release products, identify ways to improve efficiency and save costs, uncover new revenue streams, and improve the customer experience.

A great example of a company doing exactly that is FreeCast, a medium-sized content platform combining more than 500 free television channels and over 500,000 TV shows and movies. AWS helped FreeCast centralize its data infrastructure, allowing it to merge customer segment data with site click data in an AWS Data Lake—a centralized repository that stores structured and unstructured data. The result? Better visibility into ad revenue attribution, and the ability to perform customer lifetime value analysis to increase revenue from their dynamic ad insertion platform. Now, FreeCast can also personalize content, increase subscribers, and reducing churn.

Conclusion

More data isn’t better data—until it’s connected and accessible. Unless businesses move data to the cloud and connect it, they are operating at a disadvantage.

Fortunately, with the cloud and the support of a strong tech partner like AWS, businesses of all sizes can access the right tools to gain insights from data. Whether your business is considering moving to the cloud or is already using cloud technology to store data, AWS can help turn data into value and growth opportunities.

By tapping into our team of experts, solutions, and free learning resources, you can bridge your team’s skills gap and connect data across the business.

To learn more about using data to drive growth, please visit AWS Smart Business.