Why shouldn’t SMEs benefit from Business Intelligence?

When it comes to Business Intelligence (BI), organisations of all sizes need it. The software can do so much more than spreadsheets. It can help spot market trends earlier, analyse the profitability of contracts and product lines, find ways to improve performance or make smarter decisions.

However, many big suppliers don’t know, or recognise, the needs of the middle market. They’re neglecting small and medium-sized enterprises (SMEs). Enter the Cloud.

With the world of cloud finally coming to maturity, with both Public and Private clouds now available, there are currently a number of opportunities for SMEs to break the barriers to BI such as cost, data quality and lack of awareness that there is actually a solution out there for them.

Peter Ruffley, Chairman at Zizo, discusses how the Cloud can make BI more affordable. Without the need to make big up-front investments in capital and staff, today’s SMEs can now reap the true rewards of BI by working with the right technology partner who can provide the full range of project management and technical expertise – all from the cloud.

Big budgets or big problems

In today’s digital world, information is power. But it’s of limited use unless it’s combined with intelligence and analysis.

That’s one reason why the market for business intelligence has grown strongly in the last five years, helping companies measure and improve their performance by analysing vast amounts of data on their finances, customer behaviour and the performance of business units.

If you’re a large company, there has been an abundance of BI solutions to suit extensive IT budgets. But for SMEs (which account for 99.3 per cent of private sector businesses in the UK, and 48 per cent of private-sector employment), the choice has to date been far more limited.

For most SMEs BI software is just too expensive, with the license fee and the hidden cost of training staff on the software. Plus, it can be difficult and time-consuming to install. So why not look to new vendors and solutions, but also to the ever maturing cloud market?

Priced out of the market

Recent research on the affordability of BI for SME’s found that a “small system” (100GB of data, 50m rows with 50+ users and daily or weekly updates) stored on the customer’s premises had an average total cost of ownership of $328,880.

For medium-sized BI systems (1TB, 250m rows, with 200+ users and daily updates) the total cost was $900,720. For large ones (10TB, 1bn rows with 100+ users and daily or intra-day updates) it was $1,137,660.

However, the total cost of ownership (which includes the license or monthly fee, training and maintenance/service charges) would be significantly lower if most suppliers didn’t cram in so many unnecessary features to the software. This is one reason why much BI software is over-priced, over complex and unwieldy: customers have to pay extra for technology to extract BI data, weed out errors from the data, recruit more database specialists and find people who understand the business objectives of the BI, not just IT objectives.

The price of BI is also kept higher than it should be because the technology’s origins are in analysing and linking to old and complicated databases and enterprise resource planning software owned by large companies with large IT departments and budgets.

No wonder many SMEs under-estimate the total cost of BI and struggle to make a business case for it. It’s just not as simple as just buying the software and database and plugging them in.

However, there is a silver lining. Some BI is good value, particularly licences for cloud-based software. For example, the research found that the licence for a small BI system costs an average of $525 per month. Over three years that’d cost $18,900. And for medium-sized BI systems in the cloud, licences range from $1,140 per month to $6,185, averaging just over $3,000. That’s a good deal.

The good news is that there is now an affordable, end-to-end solution for the mid-market, delivered either on premise or in the cloud. It’s time for SMEs to be able to access the many benefits of business intelligence without the big budget price tag.

Outsourcing business intelligence

Most SMEs probably don’t have data scientists, or can’t afford them. But by outsourcing the running and maintenance of BI and then putting it on the cloud, a small business can let their suppliers do the tricky and lengthy work of “cleansing” data, with minimal overhead. This work often includes spotting errors in customer names and addresses in different IT systems to give a single view of a customer; a priority for organisations of all types and sizes.

Traditional approaches such as spreadsheets are fine for basic tasks but as businesses grow they often reach a point where these can’t be automated, analyse a growing amount of data and turn it into formats that managers can easily understand.

Furthermore, collating data from multiple data sets isn’t easy if you haven’t done it before and don’t have a large IT budget - and lots of experts in system integration and data analysis.

SMEs want their solutions built and deployed quickly and the right partner should be able to build a prototype version of the BI software within a couple of weeks, and then work collaboratively to adapt it in line with the customer’s specific needs. A cloud environment makes this approach incredibly easy, with the ability to deploy and provision hardware and software at will and with very little overhead in terms of cost and time.

Contrast this speedy installation with some large and complex BI projects at large companies, which can drag on for a couple of years.

Indeed, a smarter and far more agile approach is to start small then go big. A retailer, for example, could use a new BI system for certain products or stores – analysing the cost of internal fraud of some stores or the profitability of others. This further proves that by using a cloud based approach, you can have a truly amazing cost paradigm.

After it’s working well, roll it out across the business. In our experience this approach makes return on investment quicker and easier to calculate.

Conclusion

Advances in business intelligence have been one of the most important trends in corporate IT. But until recently SMEs have been let down by suppliers, which have mainly designed their solutions around large companies with large IT budgets and large workforces.

Now, with the ever maturing cloud, SMEs have access to affordable BI that can be installed gradually and will give them a good return on investment.

And the result is that they no longer have to sit back and admire what their larger competitors are able to do with their BI but reap the rewards of having their own data insight, backed up by a flexible, adaptable and affordable solution.

Image source: Shutterstock/Sergey Nivens