SMBs Find the Beef in BI Deployments
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."
News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.
Four BI Vendors Crest the Forrester Wave
Forrester Wave '08: The latest report on enterprise business intelligence shows SAP's BusinessObjects property in a tight race with three other respected vendors.
Business Intelligence Comes Out of the Back Office
Information Builders Summit '08: Analysts weigh in on the BI industry and a changing market.
On-Demand Analytics Birsts Upon the Scene
Success Metrics releases Birst, a software-as-a-service business intelligence package with a free entry-level offering and a surprising focus on verticals.
Gartner Gives BI a High 5
The research giant unveils five predictions for business intelligence in 2009.
5 Common Snags in Your BI Strategy
Gartner Business Intelligence Summit '09: BI remains a top priority, but one that often conflicts with reality.
Worldwide BI Revenue Reached $8.8 Billion in 2008
Growth in business intelligence software continues despite economic pressures.
5 Tips to Prepare for the Recovery
If you want to make the most of the developing business environment, you better start now.
Open-Source Business Intelligence: 5 Times Bigger by 2012
Two research reports outline the drivers of growth for open-source business intelligence -- and what customers can expect as the market matures.
New Challengers Added to Gartner Magic Quadrant for Business Intelligence
Magic Quadrant for Business Intelligence '10: Smaller vendors gain traction, but 75 percent of the market remains controlled by the top five vendors, with Oracle on top yet again.