For many small and midsized businesses (SMBs) IT budgets have traditionally been allotted to security, disaster recovery and PC upgrades. Business intelligence (BI) tools seem like an extravagance that can only be justified by companies engaged in research or other highly analytical ventures.


But more SMBs are now discovering they need the fact-based decision-making that BI brings and wondering how to incorporate it in an organization that might have just one IT staff member and an equally small budget. Managers ask: “Will we recoup our costs? Can we find user-friendly products that still provide strong analysis and reporting capabilities? Can we get the kind of analytical power without requiring a lot of IT support? Will BI tools seamlessly work in our Microsoft Office productivity environment so decision-making can drive the business?”


The good news is that, increasingly, tools and solutions once available only to large companies are now scaleable for SMBs. BI, after all, is about bringing reporting, querying and analytics capabilities that were once the domain of trained programmers and statisticians to a business users' desktop with minimal IT support. And, the ROI for a BI initiative is impressive enough to make even the smallest companies see the value.


Making the case for BI


SMBs accustomed to reading about BI for big companies are likely to believe it's too costly. Sure, implementing BI at a Fortune 500 company requires a significant budget, but now BI is very scaleable. Pricing models from vendors are more flexible to meet the SMB budget without providing a watered-down solution. It's more important to focus on the ROI. The following are a few examples of what SMBs have been able to accomplish using a BI solution:

  • An energy trading company uses a BI solution for its staffers to generate predictions on what the electricity and gas purchased today will sell for when it is sold to the consumer months later. The intelligence is supplied to traders in a cleaner, faster and more accurate fashion than before.
  • A collection agency can analyze the bad debt it is interested in buying before making a purchase, increasing cash flows and improving upon the previous method in which staff members tried to buy debt for as little as possible and hoped to collect successfully.
  • A midsized marketing firm helps drug manufacturers create more effective campaigns by knowing how, when and why doctors prescribe medication.

Why Analyzing with Excel Isn't Enough


Many SMBs have a person on staff who is a whiz with Excel. That person has no doubt wooed management with charts and graphs that purport to analyze whatever it is the staffer thinks the company needs for decision purposes. Excel is an important tool, but it presents numbers. It doesn't facilitate in-depth analysis. The charts are static and users cannot unearth important relationships, yet it is the tool that many business users are most comfortable with. A strong BI solution allows the results to be shared in Excel. This is critical to avoiding the "multiple versions of the truth" problem where a group working with Excel and another working with an analysis tool, come up with different numbers.


How does BI unearth relationships? One example is that it allows companies to visualize the impact that higher gas prices have on certain inventories over a period of time. Likewise, it can reveal that a customer is an outlier in purchase data, implying they're ready to leave for a competitor.


IT's Critical Role


It is common to hear that IT staff isn't sure what to make of BI. If an SMB's IT department has been creating reports for users, the department might feel proprietary about the data and be hesitant to let others use it. BI has the ability to transform the role of IT, however. Instead of devoting hours to running reports, IT is freed to look at the big picture and focus on issues like data quality, cost-effective infrastructure growth and other strategic initiatives. With BI, companies can set up security parameters around data, and the right BI tool also works well with legacy systems. The right BI provider can work with IT to come up with ways to store and access legacy data that saves IT time and money.


SMBs Unique Advantage in Incorporating BI


When a large company decides to build a roadmap for incorporating BI, it seems as if it has to create an interstate highway system from scratch. Its data quality issues can be quite complex, resistance from IT extreme, and building a business case is complex and daunting.


SMBs don't have nearly the level of infrastructure or legacy systems and can more quickly identify a project with the potential for strong ROI to experiment with before rolling out a more comprehensive BI approach. The power of BI is available to SMBs at reasonable prices and with the potential for tremendous results. It can free up an IT department and drive key business decisions that will make the company competitive with those 10 times its size. Today's BI solutions are flexible, affordable and more extendable than ever. What are you waiting for? 

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