Why Big Data is Bad for Small Business

Improvement Insights Blog

Why Big Data is Bad for Small Business

There’s a lot of hype about Big Data, but approximately three-quarters of the money spent had no return on investment. There’s big profits in small data. Here’s what to do differently.

“Hi, this is Jay Arthur, author of “Lean Six Sigma Demystified” and the QI Macros [software].

“Big Data is actually bad for small business. Now, there was a lot of hype around Big Data, but it kind of crested about 2011-2012 and it’s falling down now because people are discovering that Big Data doesn’t always give you the answers you want. What you need [is] small data, and there’s big profits in small data.

“So if you have a little bit of data about the type of defects, mistakes and errors that occur in your business: The what, where, when, why, how of what happened, then you can use something like the QI Macros Data Mining Wizard to come up with an improvement story. In very short order you can build an entire improvement project right on your computer just like that.

“Start with small data, start doing some data analysis. Forget about Big Data. Even in big companies you should forget about Big Data unless you’re trying to figure out how to market more stuff to more people, right? All you need is a little bit of defect data and you can pinpoint what needs to be fixed. You don’t need data about all the defects because the patterns will exist in the smaller sample; maybe a couple hundred data points (a thousand maximum.) I’ve worked with as many as 47,000 and I’ve worked with a few hundred. The patterns still show up in the smaller sample, so you don’t need Big Data to start making big improvements and saving lots of money.

“Small data, big profits. That’s my Improvement Insight for this week.”