Challenges & Benefits of BI for Small Businesses

Business intelligence is seen largely as the domain of large organizations, yet any size business can benefit greatly from BI tools. To date, the cost of BI technology has been too high for small businesses, but with SaaS models now offering BI on Demand, BI is available to any size business.

Challenges of BI For SMEs

The key challenges for small business are:

1. Aggregating data - many small businesses only have accounting and order management packages that hold data in proprietary format. However, any business should have a back up of data offsite, and using a batch upgrade or real time feed of data to a datamart held as part of an on-demand BI solution kills two birds with one stone. The data can be cleansed and converted to the format required by the BI application and provide access to it using BI tools.
2. Simple Dashboards - one mistake common in large businesess adopting business intelligence is that they try to measure and monitor too many key performance indicators. The maximum number of KPI's should not exceed 18-20. In a small business, the same KPI are relevant, but many start out with only 6-8 KPI relating to the sales conversion funnel and delivery process.
3. Trying Too Many New Things at Once - the key to business performance is to change one element of the process or marketing, measure it for impact, then change one more thing. If you attempt to change too many things at once, you cannot be sure which change caused the impact - good or bad.
4. Lack of visibility of real performance - without BI, it is very easy to believe that performance is boosted or constrained by the wrong driver. BI tells it as it is, not as it is interpreted.

Benefits of BI For SMEs

Small businesses today often run on thin margins, so using BI can make a significant difference to the profitability and ongoing sustainability.

Low cost rapid implementation - Web-based, hosted BI solutions provide a rapid implementation with a lower total cost of ownership [TCO]. This means - no hardware or software to purchase, install or maintain, and no complex upgrades to worry about over time. Some reports indicate that as much as 90% of the cost of software relates managing it after it’s installed.

Easy access anywhere - Access is provided anywhere through an internet connection - there is no client software needed. Business owners can keep track of business performance when on vacation and travelling abroad.

Better security - It also means your data is held in a highly secure data environment - far beyond that provided by your average small business office server. For more about onDemand software as a service [SaaS] solutions.

Ventana Research advises "smaller organizations to examine flexible, easy to install and cost effective BI offerings that both inform and empower employees to be effective in their roles and responsibilities".

SME BI Solutions

Next: Selecting BI Tools For Small Businesses

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BI for SME Index | Challenges & Benefits | Analysis | SME BI Solutions