It used to be that only well-funded corporate types had access to business intelligence (BI) and data analytics tools. By helping to turn mountains of impenetrable data into insightful and actionable business information, these tools allow large businesses to monitor the performance of their internal business processes, to spot customer trends, and to adjust their strategies accordingly.
Today, small business owners can get in on the act, thanks in large part to cloud-based BI software.
[Learn more about data analytics: Is Your Small Business Ready for Cloud Analytics?]
Affordable and user-friendly, the current crop of BI products "helps SMEs [small and midsized enterprises] level the playing field," Howard Dresner, founder and chief research officer at Dresner Advisory Services, told Small Business Computing. Whereas the corner shop may have been "limited to Excel" to make sense of its data in the past, the latest breed of BI tools for small business are "far more sophisticated," and they can deliver many of the same insights that help large enterprises remain adaptable to changing market conditions.
Dresner Advisory Services recently released the 2016 edition of its Small and Mid-Sized Enterprise Business Intelligence Market Study, which reveals what entrepreneurs look for in analytics tools and how they are finding success implementing BI. You can access the full report here(paid registration required). Keep reading for some highlights.
The BI "Nuts and Bolts"
Dresner's findings indicate that SMEs—it defines a small enterprise as an organization with one to 100 employees and a medium enterprise as one with 101 to 1,000 workers—prioritize basic "nuts and bolts" BI technologies, like dashboards.
Packed with informative data and visualizations, dashboards can offer insights about the inner workings of customer relationships, business processes, and other factors that affect the bottom line. "Everyone cares about dashboards," Dresner said. Similarly, SMEs are flocking to data discovery and reporting tools that helps unearth and demystify business data.
In terms of technology, small businesses prioritize the cloud, open source, and social media analysis. Conversely, large companies typically seek out enterprise-grade data warehousing, data mining, planning and governance solutions, reflecting their hefty reporting requirements.
Looking Outward and a Little Inward
By and large, small organizations are "more externally focused," with their BI objectives. They direct their efforts on their customers, growing their businesses, and gaining a competitive advantage. Big businesses tend to put more of an emphasis on operational efficiency.
This year, Dresner observed SMEs having "more of an operational focus than in previous years," he said. Although small organizations typically focus their efforts on external-facing parts of their business, they are increasingly discovering the value of using BI tools to get a clearer picture of their internal activities. This lets small business leaders make "many more small decisions on a regular and recurring basis," actions that bubble up over time and have a major impact on their organizations, Dresner said.
Compared to large businesses, SME executives and other top leaders are more likely to be the captains steering their organizations' BI initiatives. With fewer middle managers in the ranks, SME BI use rises to the top, giving some smaller organizations somewhat of an advantage. "The most senior levels of management are engaged [in driving BI]," said Dresner.
Because many SMEs are privately-held, Dresner says that the company's president or owner (often one and the same) frequently experiences transformational effects of data-driven decision making first. In a classic case of "follow the leader," the rank-and-file then fall in line and get to work on fulfilling the promise of BI.
Early (BI Adopter) Bird Gets the Worm
When it comes to today's data analytics and BI technologies, SMEs are upending conventional wisdom. Not only are smaller organizations more likely to employ BI solutions sooner, they are reporting high levels of successful implementations.
"Generally, we find small organizations are early adopters of business intelligence and have the highest estimates of BI success," said Dresner, in a statement. "We also see that the current BI penetration is much higher, with more aggressive future plans, at small compared to large organizations."
This year, most SMEs (more than 80 percent) somewhat or completely agree that their BI initiatives are a success.
Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.
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