BI shifts into the SMB marketplace

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.

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

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

SMB 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. Large enterprises are usually the early adopters, who understand the benefits of adopting BI technology to gain competitive advantage.

Based on leveraging knowledge and best practices, BI projects should be quicker to implement, and resources should be more plentiful for SMBs. 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.

SMBs often view BI technology as a high cost especially as a proportion of their IT budgets. This can often be a stumbling block to even considering BI. However, due to the quick tangible returns from implementing BI technology, many SMBs have already realised their return on investment several times over.

A good BI technology will mean a better view of the business. Unprofitable product lines can be eliminated, resources can be moved to more profitable areas of the business and reporting is speeded up. The last point, speed of reporting is particularly important when you think about how agile an SMB needs to be in a highly competitive environment.

Businesses, especially SMBs in the region, must protect their IT systems. According to Gartner research, 50 per cent of all SMBs (small and medium businesses) will go out of business within three years if they can't retrieve their data in 24 hours.

Most SMBs in the Middle East are revamping their existing ERP systems and are going in for, typically, tier two solutions. IT spend has increased 30-50 per cent this year over 2005 and business intelligence is the one of the areas companies are focusing on. While tier two ERP solutions deliver some reports, to build and generate more reports, companies are increasing using business intelligence applications.

Major BI vendors recognizing the size of the market are positioning their tools to serve the SMB market. The already hotly contested battle is heating up.

Excellent BI, integration and data warehousing tools are increasingly available from smaller software vendors. Many of these firms' primary customers are SMBs, so they understand their customers' needs. In addition, several are partnering with software vendors that provide enterprise applications for the SMB 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, SMBs can start taking advantage of BI to help grow their businesses and better measure performance.