A recent Aberdeen Group research report presents an interesting conundrum: In today's challenging economic climate, organizations feel extreme pressure to cut costs and conserve - but they also want to remain profitable and grow with fewer resources. "Often, the tools and skill sets that drive profitability are the very same ones that are eliminated due to budget constraints," writes Michael Lock, Aberdeen Group analyst and author of the report, "BI for the SMB 2009." Lock states that thriving, or rather best-in-class" small-to-midsize businesses (SMBs) are thinking outside the box to unlock cost savings and to find pockets of profitability during tough times. Business intelligence (BI) solutions can tools to do so.
"Many companies, particularly smaller organizations, suffer from a lack of transparency when it comes to the key aspects of their business that drive performance," Lock writes. "As a result, data shows that SMBs are also turning to BI in order to improve visibility into these business processes." The author writes that SMBs often have fewer resources to manage BI; however they also tend to draw from fewer data sources, which can translate into lower levels of complexity. Additionally, it's faster to implement BI projects in a smaller organization. Lock reveals that the average BI project typically takes 89 days for small businesses, but up to 129 days and 163 days for large businesses.
To advise SMBs in their BI endeavors, Aberdeen outlines the actions of best-in-class (BIC) organizations. Laggards and industry-average performers can take note of BIC priorities and initiatives in order to improve their own BI projects.
According to Aberdeen, best-in-class SMBs maintain:
- 29 percent average year-over-year increase in operating profit;
- 4 percent average year-over-year decrease in BI cost per user;
- 99 percent deliver BI to end-users in a self-service capacity; and
- 14 days average deployment time of BI applications.
The analyst lists the top pressures driving BI investments for SMBs:
- Improve speed of access to relevant business data;
- Enhance user visibility into key business processes;
- Give business users more analytical capability;
- Replace "gut-feel" decisions in favor of "fact-based" decisions; and
- Take action on data related to more areas of the business.
Lock writes that BIC SMBs with BI investments see, on average, a 19 percent year-over-year increase in revenue. BIC companies are not only, deploying BI to act quickly upon company data, but they are doing without the traditional SMB methods for handling data and analysis.
Aberdeen reports that 68 percent of BIC SMBs use spreadsheets sparingly or not at all as a BI tool. However, only 22 percent of laggard SMBs could say the same. Expounding on the point that BIC SMBs are increasingly thinking outside the box, Lock writes that Aberdeen is seeing a ramp-up in best-in-class usage of open-source licensing for BI. Additionally, BIC businesses are spreading the BI adoption across the organization. According to the report, best-in-Class SMBs are far more likely than all other companies to have a pervasive deployments of BI or a heavy usage of BI within their organizations. "The fact that Laggard SMBs are more likely to be using BI on a point solution or project basis doesn't necessarily mean that these companies don't have the potential to reach Best-in-Class status," Lock writes. "In many cases the research shows that Industry Average and Laggard companies simply have a younger deployment of BI and are struggling to find the right balance of people, process, and technology to fully realize the benefit that these solutions offer."
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