Why should SMBs take advantage of new business intelligence tools?
More than any other sector, small and medium-sized businesses understand that they must spend their time concentrating on running their businesses, not trying to make their technology work. SMBs don’t just want to add bells and whistles to their existing systems, they demand that their technology solves business problems.
As such, SMBs are looking at ways to use business intelligence (BI) to help make some sense of all the information in their organizations, including data that is often not immediately available, or at least not in the proper format to support smart decision-making. In fact, a 2006 survey of 1,300 SMBs conducted by Braun Research found that BI was one of the respondents’ top five priorities for technology investment.
The University of British Columbia’s Sauder School of Business defines BI as a broad category of application programs and technologies for gathering, storing, analyzing, and providing access to data to help enterprise users make better business decisions. The term implies having a comprehensive knowledge of all of the factors that affect your business, including knowledge about your customers, competitors, business partners, economic environment and internal operations, so you can make effective and good quality business decisions.
But BI has evolved to include two other meanings.
One is strategic and relates to the applications and technology that are used to access and analyze data. This includes the tools as well as the way they fit together to create an enterprise view for decision-makers.
The second meaning relates to operational business intelligence, which is about having information available to assist you in your tactical day-to-day decision-making.
Today, technology is being designed specifically for the SMB market. These products and services use open computing standards to allow businesses to connect and exchange information with partners, suppliers and customers. As a result, they help create the extended relationships that are the lifeblood of any small business.
New technology tools include dashboards, which provide relevant information to operate a business. Dashboards take their names from cars, because all relevant information is at your fingertips. By using a dashboard to provide BI, the framework can:
- Help improve productivity by managing relevant information to achieve objectives.
- Simplify organization and management of performance indicators.
- Communicate goals and metrics consistently to everyone in the organization.
- Capitalize on existing technology investments through fast, flexible access to a variety of data sources.
- Help save resources by automating information for use throughout an organization.
- Provide access to documents, contracts, spreadsheets, project plans, scanned images, audio, video, e-mail and other correspondence to provide valuable context for business decisions.
- Identify and extract specific business information from “unstructured” data, such as comments and descriptions that customers may type in when accessing common business applications — problems with a specific business transaction, for example.
- Display reports, scorecards and other relevant analysis with other content as a result of user search requests. In an advanced form, BI can provide in-depth analysis of data, extracting specific information, analyzing the content of the request and even interpreting what the user intended to ask in order to deliver relevant search results.
- Provide real-time monitoring of forecasts to catch issues before they become a problem.
- Help align actions to company strategy.
For SMBs, another concept to think about is the need for “right-time” data versus the expense of having “real-time” data.
Right-time decisions are critical in making BI work for an organization. Front-end tools make information available to users through portals tailored to individual needs or through commonly used applications. This lets users gain access to the right information at the right time.
But, to get the best value out of BI, businesses first must make a judgment about what right-time data means to them. Real-time data is achievable, but its costs may take it out of reach. Right-time data balances the cost of timeliness with the business benefit(s).
For example, a retailer putting certain products on sale must ensure that it has sufficient inventory of the related items commonly purchased alongside these sale items. BI can illustrate purchasing patterns so that the retailer can be well stocked with both the items on sale and the complementary merchandise. This kind of data must be relevant, but does not have to be real-time. Right-time data is sufficient to make these types of decisions.
The goal of BI is to integrate, analyze and optimize data from across an organization to create business insight and, with it, business value. SMBs with this capability can respond to customers, business partners and employees with information on demand, which leads to better decision making, higher sales and enhanced customer loyalty.
Cindy Taylor is information management executive at IBM Canada Ltd.
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