Big Data for Small Business

Last week a friend called me for some help. He’s working on some 401k reporting requirements, and the data the provider needs from him is fairly detailed. In prior years, we could have pulled some quick reports from the accounting system and gotten everything plugged in after some love sessions with a keyboard. However, the newly implemented accounting/recordkeeping system seems to think that actually running reports and gathering data insights is a “nice to have” versus a “must have.”

This got me thinking pretty hard about the importance of test driving new solutions before settling on a provider. If the selection team had been aware of the flaws in the system, including glaring ones where people can’t get data reporting that they really need, then they might have chosen another tool entirely.

As it turns out, there is limited reporting functionality, but it’s so incredibly complex that only one person is able to accomplish the task, and that’s only after an hour or more of trial and error. Yeah, not very efficient.

The economist says

If you’ve been around here for a while, you probably know that I like the Freakonomics podcast. I’m an economics nut, and I always thought if/when I got my master’s degree that I might like to teach economics as an adjunct professor. Yeah, livin’ the dream! :-)

Anyway, in a recent show, the two economists were talking about making business better, big data, etc. One of them, Steve Levitt, consults with different organizations to solve business problems. He mentioned that until he actually got into the businesses, he never realized that the problem of big data, analytics, and actually getting actionable information out of existing data would be driven (or limited by) the IT infrastructure.

That comment, combined with the experiences above, are probably a reality for many of you out there. Thinking back, I used Excel as my HRIS for some organizations, because we were too small to need anything else. That didn’t really allow for analysis or anything fancy–it was just a recordkeeping system.

MINOLTA DIGITAL CAMERAPayroll runs the show

Now there are providers out there that offer services to small companies to help them transition away from spreadsheets to a cloud-based system for HR needs, but many companies, especially smaller ones, wouldn’t want to have an HR system and a payroll system. That decision is usually driven by payroll, since that’s a critical business task. For many smaller organizations, keeping the HR records straight isn’t considered that critical. There are a few reasons for that:

  • HR is usually carried out by a non-HR person in really small organizations
  • Even when the company has an HR person as they grow, the compliance requirements still aren’t too difficult
  • Payroll is more important than virtually every other internal business activity (don’t believe it? Try not doing it once and see what happens…)

Big data, little data

A few years ago I worked for a company with about 600 employees, all located within 100 miles of the corporate headquarters. The company had a problem with turnover. Majorly. We weren’t food service or anything like that, and yet we had approximately 50% turnover year after year for as far back as I could find records. So I decided to try to get some insights into what was going on. I snagged the data from the past five years, dumped it into a spreadsheet, and started manipulating the information.

Within a few hours I had some great insights that pointed toward the problems, and I crafted a few potential solutions to help ease or even solve the problems we were facing.

When I presented my findings, I was told, “You didn’t have time to worry about things like that. Go process your 25 terminations and 15 new hires and leave this alone.”

In my example, we had the data and the potential solutions, but we lacked the one thing needed for action: leadership support.

Closing thoughts

I don’ t know that we broke any new ground here today, but I’ll leave you with a few takeaways from my perspective:

  1. If you’re looking at a system any time soon, run it through the paces that you’ll have to in your daily work. It’s important to know now the limits before you’re in the thick of things and trying to do something the system simply can’t.
  2. If you’re watching all this “big data” talk and thinking that it’s for larger organizations, it can certainly be implemented, even if on a smaller scale, at organizations with fewer people.
  3. Get the support of your leaders early. I think one of my mistakes was presenting the data without creating a need for solution first.

2 thoughts on “Big Data for Small Business

  1. Ben,

    Recently went to the TLNT Hi-Po conference and it is true that some of the big players there have amazing resources doing quite a bit more with big data than our non-profit. However, I came away with a renewed focus for this fiscal year to spend more time on data analysis, to ask the right questions and get to the root cause of some of our issues. Your last bullet of getting leadership support early is right on point! Find the pressure points and then help find the solution.

  2. Pingback: Performance I Create Captures My Attention!

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