When SAP launched their sports analytics division in 2013, they never dreamed that it would end up creating a whole new adjacent business: small business analytics. That's right: SAP's work with the NBA taught them how to sell into mom-and-pop businesses, a market they had previously never touched.
So how did they get from the NBA to SMB?
Consider the analytical experiment that is NBA.com/STATS and the Video Box Score--the system now captures every dribble. By working to document, process, and display virtually every imaginable statistic in basketball games, SAP is showing businesses of all kinds the seemingly endless variety of real-time analytics at their fingertips. And these solutions aren't relegated to sports alone.
“There's the business of sports--how much we make by selling analytics to the league or to the teams," says SAP CMO Jonathan Becher. "[Then] there's the transfer over to everybody else," he says--the rest of the small-to-medium business market that currently doesn't pay for data-driven business intelligence. Of course, that long tail is where the big money is. But SAP had a hard time selling their SMB customers--more than 80% of their business--on analytics.
Or did they?
Major sports franchises are huge brands, but compared to SAP's normal enterprise clients, they are actually relatively small businesses--often with front offices of less than 50 people. SAP recognized the parallels between teams and small businesses almost immediately. And while major leagues and professional sports franchises have graced the pages of SAP's portfolio for less than three years now, the commonalities they've discovered between sports business and your business might surprise you.
Generally, smaller businesses resist analytics. Believing they are too small to benefit from Big Data, many modestly sized companies rely on instinct and tactile experience. “They don't want to use analytics,” Becher says. “They tend to be more family owned, maybe even second or third generation and when you show them the data, they go, 'Yeah... I know where I need to put the next grocery store,' or, 'I know what item should go on the restaurant menu,' and I know all this because this is all I do and I don't care about the data.' You're going to launch a product, don't you wanna know the feedback in every state? Do people really want to supersize?' But if you go into these businesses and try applying analytics on day one, they don't want it.”
“What's really interesting is, when you show them that their gut, in sports, is not nearly as accurate as what the data says. [People] believe Kobe is the best at hitting the clutch shot, when in fact he's only in the top five, and they start going, 'Huh... Maybe all those close-held beliefs I have about my business are wrong. Maybe I need data as well,'” he says.
One of the first systems SAP built within the sports sphere was a drafting application for the San Francisco 49ers back in March 2013. Before SAP's involvement, the Niners--like most pro sports teams--drafted players annually based on performance in the college/pro-am ranks and a variety of dissociated and virtually unrelated physical tests at a combine.
“But those traditional statistics don't always translate, and sometimes they don't mean a thing. But that's how we draft people in business as well," says Becher. "Who's got the highest GPA from Harvard? Who's got the best SAT scores?"
So SAP built software that measured more meaningful and desirable traits, like team fit. “We're pulling that into our more traditional HR business as well. Now [non-sports] businesses are asking us for that,” he says.
Working with sports teams has taught SAP how to talk to all sorts of SMB proprietors on a new level, many of them fans. “Even though they're billion dollar businesses, [sports teams] don't get IT very often. So part of what we're trying to do is make things a lot simpler, and that has worked tremendously. Our sales of analytics to those companies that didn't really get it before [our involvement in sports] have skyrocketed,” says Becher.
[Image: Flickr user Håkan Dahlström]