Are Small Businesses More Intelligent?

Business intelligence (BI) tools have very low penetration among small and medium-sized businesses, with many relying on spreadsheets for CRM and other BI uses, according to a new survey from New York-based research firm Access Markets International (AMI) Partners. Even more surprising is that the penetration of BI as a software-as-a-service (SaaS) tool is much lower among medium-sized businesses (about 1 percent) than small businesses (about 5 percent), according to Nichelle McKenzie, a research analyst at the firm.

About 16 percent of small businesses (SB)--and 22 percent of medium businesses (MB)--in the U.S. said they use BI or data mining in forecasting and financial planning as part of an ERP/SCM module. Wholesale and retail are the dominant sectors. "This makes sense, considering the volume of e-commerce and email data that is collected daily," McKenzie says. "However, for MBs we see a different pattern,where 30 percent are using BI as part of ERP/SCM and professional business service is the dominant sector."

More than 25 percent of SBs that use BI separate from a larger module feel that it is important to study and use e-commerce data to drive sales and revenue, according to McKenzie, who added that SBs are using CRM data to deploy BI software. "However, we still see the need for awareness of BI and the positive impact that it can have on SBs. Most SBs in the U.S. use BI as part of the ERP/CRM module," McKenzie adds. One factor driving SBs to adopt BI is the feeling that the existing software is no longer adequate.

Since current penetration is so low among SMBs, McKenzie expects increased sales in this market in the next year, though she isn�t forecasting what that increase might be. McKenzie says that there is no dominant market leader in the BI space, so the opportunity to make a mark is huge. BI vendors hoping to take advantage of this opportunity need to revamp their marketing messages to inform target customers of the CRM, marketing and other benefits that BI can offer, according to McKenzie.

"There is a need for MBs to realize that they can do more with BI than just put it into [a spreadsheet]," McKenzie says, explaining the reluctance to use more comprehensive BI tools that enable a firm to improve CRM, increase sales through better customer segmentation and provide other benefits. "These companies are sticking to what they know."

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

The 9 Fatal Flaws of Business Intelligence

A recent Gartner report bemoans the fact that "companies tend to view business intelligence as [just] a bunch of technology."

Building on BI with Predictive Analytics

Information Builders Summit '08: Information Builders strengthens its WebFOCUS platform, delivering on cost-effectiveness and demands for analytics.

Business Intelligence Comes Out of the Back Office

Information Builders Summit '08: Analysts weigh in on the BI industry and a changing market.

Ongoing Demand for On-Demand BI

TDWI Spring '08: Real-time (or near-real-time) business intelligence continues to improve.

The Full Promise of Business Intelligence

The core of rock-solid BI turns questions answers.

The BI Tools Bonanza

Simple, rewarding BI tools have been developed over the past three years, quietly accelerating marketers' ability to see and hear.

BI Tools Market Shows Continued Growth

A study by IDC reveals that BI software is both popular and necessary; Business Objects and SAS continue to lead the field.

Dashboards for Customer-Facing BI

User-friendly visuals provide customers with a way to manage all their data.

MicroStrategy and Microsoft Move Up in Gartner's BI Magic Quadrant

Magic Quadrant '08: The research firm's assessment of the business intelligence sector shows the two vendors joining SAS Institute, Oracle, Cognos, and Business Objects in the top segment.

Business Intelligence Is Mission-Critical, for CRM and Others

Gartner Business Intelligence Summit '08: By 2009, 90 percent of mission-critical projects will depend on data warehouse information to drive higher revenues or lower costs.

Intelligent CRM Requires Business Intelligence

Gartner Business Intelligence Summit '08: The need for better CRM is one of the factors driving growth in the BI marketplace.