SMALL companies should learn to leverage data analytics to make better decisions to grow their business.
While SMEs are becoming more aware of the need to go digital, Fusionex International group chief executive officer Datuk Seri Ivan Teh notes that they are not moving fast enough in terms of utilising data to improve their business models to keep up with the times.
In the digital era, the use of technology enables companies, particularly retailers, to collect all kinds of data including customer preferences, purchasing behaviour and buying appetite.
The right use of data can help them better retarget products for their customers and employ the right strategies to increase performance.
“You can see what worked for them in the past. But there could be a hybrid model that strengthens the whole business model altogether such as adding on subscriptions, deferred payment, rental models, having online channels and online payments.
“All these things can come together as a perfect storm for companies who want to take advantage of this new era and opportunities,” he says.
Fusionex, a data technology provider, helps companies unlock value and derive insights from data.
According to Teh, data is growing at 650% over the next few years. And in Malaysia, there is good potential for local businesses to step up their game with data given the reasonable infrastructure here and our strong broadband and mobile phone penetration.
Citing an example from its own portfolio of clients, Teh explains that data can help a company reach out to its customers more effectively.
“We worked with an apparel store, which said they have lots of members. But where are your members? They are names on pieces of paper. You can’t engage with them that way.
“So we provided them with a platform where their customers can transact, pay and collect points online. This will allow you to market to your customers. And within the first six months, we helped them go from zero digital footprint to a proper customer database with 350,000 members.
“But collecting data is only the first step. Then, you go into a situation where there are records on some excel sheets or some paper somewhere. That’s not data. That’s raw data. So we gave them a proper system to do it. So now, when I have a product, I can analyse what these customers buy online, whether they like colourful clothes or formal wear and so on and I can offer them relevant products. So you can analyse the behaviour of your consumers, you know the frequency of their visit to your website and their recency.
“And through this, we helped them increase their revenue by almost 80% just on repeat customers. That’s a huge revenue increase for them just by talking to existing customers and by reaching out to them effectively. We don’t know how they were engaging with their customers in the past, but now we know that they are getting the eyeballs of 350,000 members online,” he shares.
Notably, it is not always easy to convince SMEs to invest in technology as there is a concern about cost.
Fusionex is trying to create awareness among small businesses that investing in technology need not necessarily cost an arm and a leg. If you embrace technology in an appropriate way, you can reap benefits from it, says Teh.
Fusionex recently launched its SME ForYou platform to encourage SMEs to adopt Big Data analytics and kick-starting their e-commerce plans, enabling them to promote their brands and products to more than 8 million customers from local and international markets.
Another concern from SMEs is that they don’t have the team or skillsets needed to handle data analytics.
“But these are things we can overcome, with training, knowledge transfer and partnerships. Malaysia has SMEs that are willing to embrace this. If we can give them the training, they will find a team to do.
“Funding, technical skillset and know-how are key. And we’re not just talking about data analytical skills. With digital, there’s also new ways of marketing and payments,” he adds.
Although it has been working with big corporations in the past, Fusionex is moving its focus to help SMEs up their ante. Teh hopes to share its experience and expertise with more small players.
“In the past, even without all this explosion of data, SMEs were already having problems coping with data on excel sheets. Now, there’s different types of data. You have videos, unstructured data, photos, marketing data, e-commerce, IoT (Internet of Things), apps. How do you think they are going to cope with that? It is a big problem,” he notes.
Additionally, companies will also need to look into elements such as cyber-security, hacking and data protection.
While it may sound like a lot for small companies, there is little choice for them other than to use technology in order to reach out globally.
“Our role is to see how we can help up the game for SMEs, to scale up, to increase visibility in the market and to increase their quality,” Teh says.
“Our hope and aspirations is to provide them with technology, do the knowledge transfer with them, provide them with the right training - almost handhold them for a period of time - then we hope they will be self-sufficient in three to six months. But there are some who prefer to outsource the data analysis and tracking to us while they focus on production,” he adds.
Increasingly, the government as well as other players in the business ecosystem play a role in pushing SMEs to adopt big data analytics before they get gobbled up by the global brands.
As Teh likes to put it: data is the new crude oil.