The big boys’ game of business previously played only by large multinational corporates is opening its gates for smaller firms.
Deloitte information management partner Robert Hillard told the National Business Review that while it had been known for decades that information was the most valuable resource with a very real economic value for a business, only large corporations could afford to use it to their advantage.
“It used to be really really expensive to analyse a database: if I have access to 10,000 to 100,000 customers – to analyse that data was something that only a big company could have done, whereas nowadays all of the tools and storage capacity can exist on a laptop.”
With the cost of computer storage having dropped radically over the past decade, quantity of information kept on both small and large companies’databases had skyrocketed.
But techniques to manage this century’s trend in rapidly building quantities of information have not been able to keep up, leaving management at a loss.
Going forward, information must be treated as something that needs to be managed in its own right, said Mr Hillard, who recently published a book – The Information-Driven Business – aimed at anyone responsible for information within an organisation.
“Increasingly, information doesn’t provide a window on the business. It is the business.”
With plummeted costs of storage and new tools, which allow to analyse and manage information, small locally owned companies can now, for the first time, play the same game of business as large corporations.
It is truly a revolutionary turning point, which will change forever the fabric of the business world, Mr Hillard said.
Large companies are still in the winning seat as they have 20 years of experience on smaller firms, in collecting, storing, analysing and applying information to their business model.
“Big business may have been doing it for a long time but the techniques have evolved and they aren’t necessarily maximising the information to full advantage either.”
Mr Hillard said to ensure maximised benefits smaller companies should group together and share information – something that wasn’t possible just 10 years ago.
“Several small businesses can work together and actually put up a front that makes it look like a big business and share information.”
Information can be exchanged, bought or sold, and it can be about a company’s customers, product and how that product is used. While there is no set number of companies information can be shared with, Mr Hillard said the more it is used the less valuable and therefore expensive it becomes.
Over the past decade many firms have been sharing information without even realising it, Mr Hillard said. Information sharing is something, which in the near future will become a norm in the business world.
But to ensure most profitable outcomes, a strategic approach must be applied to its management.
Mr Hillard said there were four basic steps every business starting out should follow: firstly, to access what information it already has; secondly, to determine whether this information is being used effectively; thirdly, to establish who on the market could benefit from its database; and lastly, who has information your company can benefit from.
There is a perception that customers would not want their personal information to be shared with other parties and doing so would mean companies are exploiting their privilege.
“[But] it’s quite the opposite – customers are frustrated that their information is not shared, as long as its done in the way that they’ve got control and visibility of, Mr Hillard said.
“Most people have complicated lives and they are looking for some simplicity.”
But when sharing a customer database it is crucial to clearly communicate with stakeholders how the company is planning to use it and the stakeholders' permission must be obtained.
But simply accumulating information can’t ensure decreased spending and increased profits for a business. It has to be managed in a strategic and controlled way.
“The winners tailor their product to the needs of their market. Successful leaders have a deep insight into the running of their business. Such an insight can only come from accurate information,” Mr Hillard said.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- AUT's Brian Cusack explains why the government has much more work to do on cyber-security
- Pie Funds' Mike Taylor on this week's highs and lows
- Cameron Officer on whether Tesla's first electric truck will be the first on the market
- Tim Hunter is disappointed Vista Group is resorting to a stock split
- NBR Radio: The best interviews, with Grant Walker – updated daily