BI shifts into the small and midsized business marketplace

BI isn't just for Fortune 1000 companies anymore. Thanks to pressure from regulation and the current business climate, SMBs are looking to BI to help them handle their data.

In a recent survey of 1,300 chief information officers (CIOs) conducted by Gartner Inc., business intelligence (BI) is rated the No. 2 technology initiative for 2005. (Security enhancements is No. 1.) In a shift from previous years, CIOs are focusing on business growth and results, not just internal efficiency and cost control.

Rick Sherman, Athena IT Solutions
Rick Sherman, Athena IT Solutions

Naturally, BI is big in Fortune 1000 companies. But now it's getting big in small and midsize businesses. SMBs need it, desire it and have the ability to do it.

The need for BI
The increased emphasis on growing businesses and examining performance means that business people have to be able to access and analyze data. Government regulations and the current business climate pressure companies to get a better handle on exactly what data is being used to make business decisions. Plus, they have to document and manage it better.

The desire for BI
You may have the need but not know it. You only have the desire for BI if you know what it is and how it can help you.

Small and midsize business executives know the end results they need: full knowledge and reporting of their business activities and performance so they can comply with government regulations and make the business grow. They know that they need to access and analyze data. But they might not know that BI is what they need to make these things happen. It's up to the CIO or chief financial officer to educate other executives that BI is the technology they want.

The ability to make BI happen
Implementing BI is not just for billion dollar companies. Sure, the big guys were the early adopters, who paid the higher prices for software and labor to be leaders. They experimented and learned how to effectively deploy these tools, leading to larger projects that needed more money, people and time.

Big companies paid the dues. Now smaller firms can benefit. Based on leveraging knowledge and best practices, BI projects should be quicker to implement, and resources should be more plentiful for small and midsize businesses. They should engage an experienced BI architect to help shape their BI efforts and keep them from "reinventing the wheel" by making the same mistakes others have made.

The high cost of BI tools can be a roadblock for small and midsize businesses trying to start a project and Fortune 1000 firms trying to expand BI. The cost of the tools, their licensing and using them all adds up. The latter involves the time IT people spend to learn, design, develop, deploy and maintain BI environments. It also includes the business people's time to learn to use the BI tools and incorporate them into their business processes.

Fortunately, four trends have emerged to improve this situation:

  1. Microsoft is coming. Microsoft Office tools offer business people great front ends to data -- especially through Microsoft Excel. In addition, SQL Server 2005 will include database, integration and BI technology. And Microsoft's technology offers a very cost- and resource-effective approach to implementing BI.
  2. Business people certainly are using Microsoft Office, even if you do not buy into Microsoft's back-end tools (database, integration, data warehousing and BI). In this case, many BI vendors are more closely linking their offerings to Office, in particular Excel. This greatly reduces the cost of technical deployment and almost eliminates the time business people need to use the BI solution.
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  3. Major BI vendors recognizing the size of the market are positioning their tools to serve the SMB market.
  4. Excellent BI, integration and data warehousing tools are increasingly available from smaller software vendors. Many of these firms' primary customers are small and midsize businesses, so they understand their customers' needs. In addition, several are partnering with software vendors that provide enterprise applications for the small and midsize business market. These partnerships often involve embedding their BI (or integration) tools into their partners' applications, thus making BI deployment very cost-effective.

    Since these applications are often industry-specific or oriented to specific business functions, embedding the BI and integration tools with the applications enables the reporting and data analysis that customers need. This approach is very resource-effective and more easily incorporates the BI environment into companies' business processes.

Thanks to better and less expensive BI tools, more experienced people, and lower deployment costs, small and midsize businesses can start taking advantage of BI to help grow their businesses and better measure performance.

About the author
Rick Sherman is the founder of Athena IT Solutions, a Boston-based consulting firm that provides data warehouse and business intelligence consulting, training and vendor services. In addition to over 20 years in the business, Sherman is also a published author of more than 50 articles, an industry speaker, a DM Review World Class Solution Awards judge and a data management expert at SearchDataManagement.com. Sherman can be found blogging at The Data Doghouse and can be reached at rsherman@athena-solutions.com.

 


This was first published in March 2005

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