Cloud. Big Data. Predictive Analytics.  There are plenty of technology buzz words going around technology that promise to give your company a competitive edge.  But implementing one of these programs is no small undertaking: they require technical staff, hardware, software, time and effort.  Think of the companies that are known for doing this best.  Walmart knows an incoming hurricane means increased strawberry pop tart sales

[1].  Target might know a family member is pregnant before you do[2].  Big companies have the edge because they can invest large sums of money into combing through their data, building custom interfaces, and making speedy operational and pricing changes to capitalize on these trends.

In the 1990s and early 2000s, only the largest firms with the biggest competitive advantage to gain had the time or money to invest in IT infrastructure, data scientists, and software, and they reaped the benefits.  Since then, the amount of publicly and privately available data has expanded exponentially as evidenced by the correlated exponential growth in infographics describing the rise of big data[3].  As the amount of data has grown, collecting and storing that data has become cheaper and easier thanks to the rise of cloud computing.  However, the cost of IT and analytics professionals needed to maintain and derive value from the data that companies have painstakingly collected has not seen a corresponding decline.

The rise of specialized predictive analytics tools has begun to level the playing field for smaller and medium sized firms unable to get over the IT skill and investment hurdles to establish an analytics program. Predictive analytics tools can allow them to achieve similar benefits to what the big firms have but without incurring the upfront and ongoing IT infrastructure and staffing costs.  This also means less time maintaining IT systems, hiring staff, and producing strategic analytics to figure out where your business needs to go and more time helping it actually get there.


 

Sources:

[1] http://www.nytimes.com/2004/11/14/business/yourmoney/what-walmart-knows-about-customers-habits.html

[2] http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=1&_r=1&hp

[3] http://wikibon.org/blog/big-data-infographics/