Selecting BI Solutions for Small Businesses

Small businesses have the advantage of all the mistakes made by large businesses in selecting and implementing BI solutions.

Overall, many of the problems stemmed from far too much attention being given to the whizz-bang functionality of the technology instead of understanding exactly HOW the technology solves business issues and improves business performance.

Today, BI technology is more mature and sophisticated than five or ten years ago. In spite of this, not enough businesspeople understand what the technology can do. One critical thing to realise is that BI tools are just that - tools. They need to be effectively incorporated into business processes and methodologies.

For instance:

Corporate Performance Management - incorporating dashboards into a methodology used to deploy and measure performance to strategic objectives is known as 'Balanced Scorecard'

Lean Six Sigma - a methodology to increase efficiency and lower costs in business also uses BI tools to monitor performance, and in some instances activate automatic decision making.

Beyond Budgeting - is a budgeting methodology that can be incorporated into the process, supported by BI Budgeting tools.

Thus, BI tools are the quintessential planning, measuring and monitoring, performance management and trouble shooting tools. But they rely on the business knowing how to use them to best effect for their true and complete value to be unleashed.

BI tools do far more than standard reporting packages. Reporting only tells you what has happened and when. BI tools can identify exactly where it happened, why it happened and helps you decide what to do in the future.

Can I Use My Current Software for BI?

Systems companies use for accounting and managing transactions are not very good at reporting, let alone attempting to do BI tasks. For a start, the database they use is not structured in a way that can be used for analysis or data mining.

Another issue is performance. BI queries are a lot more complex, and therefore larger than simply adding a sales transaction or looking up customer or product data. Transaction systems are designed to perform a large volume of small file queries every second. BI queries, being larger, require more processing power. This can impact the performance of your transaction systems and cause problems for both you and your customers.

Hence, BI tools need to run on their own database, with the data structured in a way to support BI queries. In a small business, these are often known as data marts - where only the data required for business intelligence purposes is loaded.

New types of data warehouses, known as data warehouse appliances, and active data warehouses enable data applications to run directly on the database but these are generally only used in larger businesses, due to the higher cost of the technology.

A newer, increasingly popular alternative is to have the BI data set uploaded to a remote data center hosting BI on Demand solutions.

Considerations

BI answers business questions such as who are your most profitable customers and products, and what impact a particular event may have on cash flow and earnings over the next five years.

BI helps small business owners better understand the drivers of profitability and to perform what-if analysis based on scenarios such as opening a new branch, developing and launching a new product, penetrating new markets etc.

The analytics tools help business users answer really difficult questions, by providing reliable data that gives the real truth, not some subjective opinion.

They also ensure that your business performance is measured and monitored by the right drivers - giving you more insight into what helps and what hinders your business success.

BI tools are not just reporting finanical performance. They also report operational performance, and are extremely valuable in isolating process efficiency problems.

As databases are becoming more powerful and standard business applications more sophisticated, SME's can expect BI capabilities to become more available embedded in standard operating software.

The key is to ensure you understand exactly what BI can do for your business - and this is often quite difficult for most business people [from both large and small businesses] to grasp. If you don't understand the technology, how can you understand what it can do for you - and most technology people don't understand your business.

It's really up to you - the best advice I can give you is to get hold of a copy of "The Logical Organization". This book walks you through all the essential elements of BI tools and how to pick the right BI solution for your needs. It also outlines in detail exactly how BI can be used in your business.

SME BI Solutions

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