Data is power and creates new opportunities for small business owners, but responsible values are key to maximizing this power, said Dr. Kendra Vant, executive general manager of data at cloud-based accounting software company, Xero.
Consumers are becoming increasingly aware of and interested in the fact that their data is now a valuable product which they are leaving behind as they use multiple online tools, and which they realize is being used in multiple different ways, said Dr. Vant. She added that small business owners that are transitioning to the cloud, post-pandemic, need to understand the rights and responsibilities they have, both in using data as consumers would expect them to, and as a genuinely important part of being a company “that is here for a long time, and not a good time”.
To be comfortable with responsible data collection, Dr. Vant encouraged small business owners to educate themselves using the resources available both at Xero, such as its Responsible Data Use Advisory Council, launched in June 2021, and elsewhere online. She said, “take advantage of that extraordinary efficiency that can come by having that seamless in real time conversation with your advisor.”
Moreover, Vant said that collection and use of data needs to align with the specific service that business owners deliver, hence making it “less challenging and less risky for [business owners] to make sure that they are keeping up with regulation, because they’ve only collected the data that they really need to for a customer to complete a transaction”.
While small business owners need to be educated on the responsible use of data, they also need a framework to confidently share their own data with tech providers, a 2021 study by market research firm Perceptive, on behalf of Xero, found. A majority of small business owners (54 per cent) do not share their data, often expressing nervousness or a lack of knowledge about how tech companies use it. Only 17 per cent of business owners understand what tech providers do with their data, highlighting a need for education on responsible data use, the study added.
Out of the 2620 small business owners that Perceptive spoke to, including 340 in Canada, 24 per cent of data sharing respondents said they benefit from improved technology and stronger insights on the best products to develop. Twenty-three per cent said they gain a better understanding of their customers and how their business operates by sharing data.
However, responsible sharing and using data can also be reinforced by encouraging data literacy at grassroot levels, said Dr. Vant in a blog post. She affirmed that data literacy should be in everyone’s job description, noting, “The exponential growth in the amount of data in the world isn’t slowing down anytime soon. And as these digital breadcrumbs generated by day-to-day activity become ubiquitous in our everyday experience, data and the conclusions we draw from it is also becoming easier and easier for bad actors to manipulate.”