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Until recently the software, hardware and, more crucially, the staff needed to run business intelligence (BI) put it firmly outside the reach of small and medium-sized companies.
But a whole range of BI products specifically designed for mid-market organisations is now coming onto the market. Their makers, which include industry leaders such as Microsoft, SAP and Oracle, are pitching BI as a recession-beating technology that can produce a fast enough return on investment to make it a no-brainer for companies struggling to grow or simply to survive in today's tough times.
According to analyst firm Gartner, "BI is truly for everybody because there is no company or role without information needs that cannot be described as BI. Mid-market and even smaller companies do all benefit from BI. However, they often don't know what is out there beyond spreadsheets, have no idea what technology can do today, don't manage their information properly, and, therefore, miss the big picture."
In the current climate, small and medium-sized companies have an even greater need for fast and accurate information on their businesses than larger players.
"There has never been a more critical time for the mid-market to embrace BI," says Microsoft BI manager David Hobbs-Mallyon. "It allows companies to have access to the right information when they need it and makes them far more agile."
He adds, "There are two key reasons why BI was the preserve of large organisations. The first was you needed someone with a doctorate to perform the data mining required and the second was the need for a small IT department to run BI. Today, however, it is actually far easier for a smaller company to have BI than it is for a larger one."
Hobbs-Mallyon explains that larger organisations are split into different and frequently highly autonomous departments, whereas staff in smaller companies tend to work more closely together. This makes it easier to clarify objectives and terms of reference. In a big company, for example, the finance department might have a different definition of customer to that held by the sales team.
Microsoft's latest BI solution aimed at the mid-market is the SQL Server 2008 R2, which is due to ship on 21 April 2010. This is designed to allow users to generate instant reports and analyses from information already in their Excel spreadsheet as well as linking to ad hoc information.
Management consultant Cognisco, which uses Server 2008 to deliver its own in-house analysis, now analyses 10,000 employee assessment reports every six minutes, compared with every 22 hours previously.
"We are now harnessing the full power of BI, having migrated largely manual systems to real-time reporting," says Cognisco's chief technology officer John Katterhorn. "Preparation for a trend analysis meeting with a customer used to take three or four days - now it takes three hours."
SAP is also aggressively targeting the mid-market for BI and recently launched SAP BusinessObjects BI OnDemand. The product has been designed to allow casual users to tap into both their on-premise and on-demand data to get a better insight into their organisation and securely share reports on desktop dashboards with employees, customers and partners. SAP claims that the system enables even people with no prior BI training to get up and running.
According to James Thomas, vice president of project management for SAP BusinessObjects, "Increasingly, companies are deploying a combination of on-demand and on-premise applications to adopt a hybrid approach."
SAP plans to sell SAP BusinessObjects BI OnDemand through all available channels. With direct sales currently in the process of being enabled and SAP PartnerEdge channel partners will be able to offer the solution in the first half of 2010.
SAP is currently working on a formalised engagement model for channel partners, which is targeted for release in the second quarter of 2010.
SAP believes its BI offering represents a key revenue opportunity for partners in the ability to "double-dip" by selling On-Demand to their existing on-premise customers or offer "hybrid" deals that combine both on-premise and on-demand BI.
Oracle also offers a BI solution priced to appeal to mid-market companies. Oracle Business Intelligence Standard Edition also provides everything needed to create highly formatted reports and operational dashboards that also include ad hoc data.
Oracle's BI interactive dashboards provide a web browser interface enabling the user to see gauges and tickers that it claims enables the user to "take the pulse of the business".
Users can also easily and quickly create their own queries and then drill, analyse, visualise and embed the results in personalised dashboards or deliver them to a variety of formats and channels via BI Publisher, which is designed to deliver everything a medium-sized company needs.
But, despite the firm belief of developers such as Microsoft, SAP and Oracle, it is yet to be seen whether the mid-market will snap up the new product offerings in the belief that they are a must-have in a time of recession. Telling an entrepreneur he or she needs specialist software in order to learn about how their business runs could sound condescending.
IT companies like those mentioned above say that BI can, for example, instantly identify a company's most profitable product or service. Many chief executives of SMEs may not feel they need a complicated dashboard to help them navigate their way around a company they built from the ground up with hard work and gut instincts.
Such an executive would be more likely to be tempted by the way BI can help monitor costs and make sure the company is getting the most bang for its bucks in these testing times. Microsoft suggests that mid-sized organisations should start BI with a relatively restricted project such as marketing.
John Wanamaker, an American businessman who died in 1922 at the age of 84 and is regarded by many as the father of modern advertising, once famously remarked, "Half the money I spend on advertising is wasted: the trouble is I don't know which half."
BI enables a company to track, day by day, the effect of its marketing campaigns on sales. It can also be used to perform functions that can have a direct and powerful appeal to the hard-pressed finance directors of mid-market companies.
Most mid-market finance directors have two often opposing objectives. They must reduce costs by streamlining financial processes while boosting their organisation's performance by improving the quality on information they supply to support better decision-making by managers.
An immediate benefit of BI is it gives instant access to all data transferred from the accounting system without having to refer to the hard-pressed IT department and wait for their response. Information can be more detailed than was the case before BI.
According to Microsoft, "The beauty of BI software is that it is quick and easy to produce and distribute a summary report. If this raises questions, users can drill down through the numbers to the raw data behind it to get an answer without writing numerous extra reports or having to wait for an expert."
Microsoft quotes the example of a European financial planning analyst who spent hours each month to do a gross product analysis by downloading all the data from Navision and analysing 17,000 lines. Now it comes straight out at the push of a button. The company has also seen major productivity gains in retyping numbers, manually preparing reports, reconciling figures and automatically generating cash flow, as well as eliminating disputes.
It is also relatively easy for a mid-market company to set up dashboards that are essentially motivational tools. One organisation, for example, has created employee dashboards that include sales trends, top 10 customers, top 10 best-selling products and top 10 best-performing sales staff.
Potential mid-market customers can also benefit from learning how larger organisations have used BI to improve their profitability. Business intelligence is, for example, now crucial to Allied Bakeries, known for its Sunblest and Kingsmill bread brands. The company delivers bread, rolls, tea cakes and muffins to 12,500 stores every day. Most of the products are baked the night before delivery and have a short shelf life.
The company's 4,500 staff work from numerous manufacturing sites and depots across the UK and Ireland. The challenge was to try and keep track of operations when each location held and managed its data separately.
"Our exiting system had been in place for many years and it remained a manually intensive process to compile information to produce reports or track our order fulfilment," says Tony Jaskeren, head of business intelligence at Allied Bakeries.
The company needed to pay IT specialists to define and manipulate the source data to produce reports. This kind of analytical information is crucial as it allows Allied to gauge industry fluctuations and monitor the supply chain and sales growth.
Jaskeren chose to work with Microsoft partner Edenbrook to develop a BI system that delivers tailored analysis to allow managers and senior staff to track customers' orders against delivery figures. Local managers are also provided with easy-to-use tools to enable them to use BI in their everyday jobs. The BI reports also measure key performance indicators, helping managers to evaluate the progress made by individual sites.
"Detailed information is now readily available. Managers can use [BI] to identify trends and act on them faster. Our delivery accuracy and, more importantly, our service delivery to our customers, have improved significantly," says Jaskeren.
This type of flexibility is very important to a large-scale operation such as Allied Bakeries in ensuring long-term growth and flexibility. But it is even more essential to small companies which need business agility simply to survive.
According to research carried out by Aberdeen Research, SMEs that have achieved 'best-in-class' performance have typically adopted BI. Aberdeen conducted a survey of 530 SMEs worldwide. The study found that the best-in-class companies achieved a 29% average year-on-year increase in operating profit.
Aberdeen reports that these companies were willing to think outside the box to create an analytical culture and infrastructure that delivered value at the lowest cost.
The BI capabilities delivered included automated report generation and delivery to the user. Aberdeen found that this established an information culture within the SME that values timely delivery of data, monitoring the number of users accessing the BI system and using cross-functional teams for faster deployment to BI tools.
The study found that companies with the highest performing operations took steps to identify areas of the business that would deliver the most tangible and rapid return on investment from BI. They used BI to create reporting and analysis tools, data integration tools, performance reporting dashboards and operational dashboards.
A wide range of organisations are now starting to follow the example of companies such as Allied Bakeries and are using BI. The Institute of Technology Tallaght (ITT) in Dublin, for instance, has adopted BI to give the president, registrar and department and school heads instant real-time analysis of key performance indicators together with statistics on student demographics and course popularity. ITT Dublin has some 4,000 students and offers career-focused courses. It has implemented Oracle Business Intelligence Standard Edition One.
But there are still a vast number of potential users of BI among mid-market companies which have yet to adopt it. Analysts believe many are as yet unaware of the advantages it can offer them.
According to analyst Gartner, "There are millions of users out there that have never seen a live dashboard that shows critical metrics relevant to their particular jobs, let alone some of the more innovative visualisation techniques and mash-ups."