Small to medium-sized firms also need BI

Business intelligence (BI) has historically seemed to be the preserve of large, well-financed organisations. But smaller organisations also need the benefits of such software, says Aubrey Van Aswegen, MD, KID.

Small to medium-sized enterprises (SMEs) have tended to be at the end of the queue for suppliers of enterprise-class software. This has, to date, been true for almost every class of software. It's certainly been true of ERP software, and it's equally true of the BI market.

In considering SMEs, it's useful to draw a distinction: for the BI market, the dividing line is companies with revenues of R200 million and under. These companies have precisely the same pains and challenges as Global 10 000 companies:

* They struggle with data accuracy;
* They need insights into their operations;
* They need to understand which customers to target, and why they are losing customers to the competition;
* They need to be able to align strategy with insights into the business;
* They need to be able to give management near-time insights into the day-to-day activities of the business, so that corrective action can be taken when it still matters; and
* They need to be able to present this information to executives in an easy to understand manner, typically graphical in format, and ideally in a dashboard.

And they need all of this at a price-point way below that of Global 10 000 organisations. Such organisations can afford the R5 million required for a classic BI solution, but SMEs simply cannot cost-justify such an expense as a proportion of revenue.

To deliver BI to the SME market, then, will take innovation and flexibility. Here are a few examples of how innovation and a flexible attitude can bring enterprise-class BI to the SME market:

* Delivering BI in line with the software as a service (SaaS) paradigm. This highly successful model has succeeded where ASP (application service provision) failed, and is a huge hit worldwide with customers of all sizes - so much so that more than 5% of all software today is delivered in this way.

The popularity of the SaaS model derives from the fact that capital payments are avoided, expenses are deferred off balance-sheet, and risk is shared by the vendor. Hardware tends to be owned and managed by the vendor, allowing the customer to get on with his core business.

* Open source tools. Relational databases such as MySQL and Postgres, being marketed on the open source model, can help defer capital costs as there is no price tag associated with their acquisition.

In addition, there are suites such as Pentaho which have been developed on the open source model, and these can be used in conjunction with open source databases to deliver a full BI solution. In such a scenario, skills remain the missing piece of the puzzle.

* Standardising on Microsoft solutions. Microsoft has embedded much value-added BI functionality in its latest iterations of SQL Server, and with the acquisition of ProClarity, it offers SMEs, and even large customers, a great deal of functionality at a relatively low entry point.

* Implementing industry best-practice templates which can make for a fast start; reduce skills and implementation costs; and bring the business in line with the processes of far larger organisations.

These are just five approaches to bringing the benefits of BI to the SME market. No doubt further analysis and investigation will yield many more - proof that you don't have to be a billion-dollar organisation to enjoy the competitive advantage BI confers.