BI and the SMB

Published: September 20th, 2005

What does business intelligence mean to an SMB, and how do I take advantage of it to work smarter?

This question cannot be answered without a definition of business intelligence (BI), which simply means turning your data into information that is useful to make decisions.

SMBs, just like larger companies, need BI. Most organizations don’t get the information they want from their existing computer systems without going through hoops, and these hoops are usually Excel spreadsheets. Spreadsheets are inefficient and unreliable; errors can creep in anytime through re-keying or calculation mistakes. There is no audit trail on changes, so errors may go undetected. To make matters worse, spreadsheets are not updated as things change in the real world, so decisions are sometimes made based on old data.

Another problem shared by both small and large organizations is that decisions are not just based on the data in an accounting or enterprise resource planning (ERP) system. What about operational data about customer satisfaction or operational efficiency? This information could be collected through surveys that are outside of any business system you have, and still be critical to decision making. It should be included.

BI is supposed to take the mechanics out of certain processes. It can be a report on your desk every Monday morning that has exactly the information you need, or a dashboard-like presentation of key information that is available every day when you turn on your computer. Often BI is considered synonymous with On-Line Analytical Processing (OLAP). With OLAP, you can slice and dice the data any way you want to without asking for help. OLAP allows you to view your operations from multiple dimensions such as customer type, region, product type, or by salesman. You could drill down for details or graph the results easily. OLAP has so far been implemented mostly at the larger organizations and OLAP vendors are still able to charge the big bucks to these companies. But you can expect prices to fall as competition heats up and the larger companies are saturated with the technology.

Answering how one might take advantage of BI is tough. First, you need to know what information is important to make decisions. This information should address your critical success factors (CSFs) – what you must do very well in order to be successful. And you need to have measurements that tell you whether you are achieving your CSFs. People are also naturally motivated to perform well when results are being measured. Although defining CSFs and their measurements sounds easy, this is where most companies fail in taking advantage of BI.

Now all you need are tools to get the required information efficiently and effectively. You want the information to be integrated with your existing systems so you should probably turn to your current solution provider and ask them for assistance. If they can’t help or the costs are outrageous, it’s time to look for help from another solution provider. That’s not business intelligence, just common sense.

Michael Burns, MBA, CA, is president of <A HREF= http://www.180systems.com 180 Systems, which provides independent consulting advice including business process review, business case development and system selection. Michael can be reached at 416-485-2200 or by e-mail at mburns@180systems.com

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