SMEs enjoy business intelligence advantage

Small and medium-sized enterprises (SMEs) may be better able to harness the power of business intelligence (BI). That’s according to a new report showing smaller companies are more agile and closer to their customers than larger organizations.

The study from Dresner Advisory Services showed SME BI initiatives are more likely to be driven by executive management and the sales function, reported Enterprise Apps Today.

“SMEs have the advantage of agility and the ability to use BI as a competitive differentiator,” explained Howard Dresner, chief research officer at the firm behind the report.

“Because of the closeness of executives to the technology, business and customers, they have an edge against larger competitors.”

However, he points out that larger organizations have a lot more resources in terms of people and money, enabling them to invest in more long-term projects.

But while they may have an advantage when it comes to business intelligence resources, SMEs tend to face fewer operational challenges.

Larger organizations, says Dresner, can get “bloated with bureaucracy and process, forcing them to focus BI upon efficiency”. By contrast, smaller enterprises are more efficient and can focus externally.

This seems to go against a recent report from BI software vendor SAP, which warned this summer that SMEs struggle with data analysis.

In a blog, SAP noted how for really precise decisions, companies need lots of data, but speed and efficiency is a real issue: management simply doesn’t have time to wade through mountains of raw data when there are loads of other tasks to perform.

“Another aggravating factor is that the management depends on the cooperation of the IT department to deal with the issue. Many midsize companies tie up unnecessary resources with gathering data, and these resources then don’t get to do their core tasks,” said SAP.

This results in one major problem facing SMEs – lots of raw data that is merely presented and not analyzed or synthesized to be of any real value. Agile they may be, but SMEs need to find ways of maximizing their resources of they risk missing out on making sense of the data they are harvesting.

Big data opportunities for CFOs

Chief financial officers (CFOs) are at the heart of an organization’s operations. Holding the purse strings, everything done by the enterprise needs to come through them at some point.

This means a lot of control and oversight. But it also entails a huge volume of data that is relevant to the finance function. Monitoring, harvesting and assimilating this information is not an easy task, and one that CFOs recognise as a significant challenge.

Big data is seen as one of the major technology trends affecting the accounting profession, according to a recent report from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA). The global survey polled over 2,100 finance professionals from around the world.

Of the US respondents, 62 per cent said big data would be influential, compared with 91 per cent of Australian respondentsand only 47 per cent of respondents from Ireland. US participants also claimed big data will demand new skills, with 72 per cent responding that tools will be needed to support data modelling and analysis. Three-quarters (77 per cent) claimed they will need knowledge of data extraction tools to aid business intelligence.

US finance professionals seem a lot more clued up about big data than their British peers. Just 52 per cent of UK respondents said it would be impactful in the years ahead.

Whether in the US or the UK, however, it seems CFOs need to do more with big data, to understand it and harness it to their advantage.

Chris Gentle, head of research at Deloitte and a member of ACCA’s Accountancy Futures Academy, says accountants and financial professionals must be able to adapt to the changes created by big data. “The future will not be like the past, and we will all need to adapt,” he explains.

Raef Lawson, IMA vice president of research, adds: “US accountants and finance professionals are influential agents of change; they’re adept at using technology to advance their careers, their clients’ prospects and their own organizations.

“But they need to extend that influence to advising clients. Only 35 per cent of US respondents said they could influence their clients’ use of technology, compared to 80 per cent of respondents in Africa.”

The evolution of BI: Coming to the mainstream

Business Intelligence (BI) software has traditionally been the tool of the rich – seen in many circles as the magic wand for enterprises that they merely need wave in order to get insights into themselves, their customers and the wider market.

But in an ever-changing marketplace that is becoming more and more competitive, are BI software providers having to change their approach?

According to one expert, the tide is indeed starting to turn, with BI starting to become the plaything of midsized companies looking to gain a competitive advantage over their rivals.

Rick Robinson, writing for Midsize Insider, said the focus for BI providers has come through the advent of flexibility in the market and the growing need to make software more user freinly and accessible.

Findings from Gartner put sales of BI software in 2012 at some $13.1 billion worldwide, but with the demand starting to grow, how are companies starting to change what they offer to stay competitive?

The age of self service and bespoke packages

The rise of BI into the mainstream is facilitated in many ways by the increasing level of self service available in the sector, under which firms are able to choose what they need from their BI package rather than having to go the whole hog.

This rise of bespoke packages has made it much more affordable for many to get into the BI market, by letting them pick and choose things they want to focus on and discard elements that are really only of use for larger firms.

Input and output

In order to make BI more mainstream, the market has had to focus on the output. Companies using it want to know one thing – insights that will help them make important business decisions.

However, in the past it has been both hard to decipher things for those who are not perhaps IT trained or particularly tech savvy, and difficult to draw out the information required, which is the key area that the providers have had to focus on.

Mr Robinson said there is a need now more than ever to give flexible results pages that update in real time – more akin to Big Data – and that offers businesses the chance to simply pluck out the information they need without having to dig too deeply.

Affordability

One of the main problems that plagued many smaller and medium sized companies with the advent of BI was the fact that it was simply too expensive for them to implement in their operations.

However, the recent rise of a much more pick-and-choose nature in the sector has meant that it is now entirely possible for companies to choose elements of software to bring into their operation, which makes it not only simpler, but more affordable.

It saves companies from wasting large amounts of money on things they will not need, while still achieving the overall goal, and helps BI software reach a far greater number of users.

Big Data v BI: Where is the real winner?

Big Data is a relatively new revolution in the business world, used to analyse the vast amount of data that is constantly being thrown into the laps of companies at a rate that far exceeds anything businesses themselves are able to deal with.

It sits, however, in competition with Business Intelligence, a slightly older tool that leaders across the world make use of in order to turn the data that companies collect about their clients, customers and markets into something of a useful business strategy through.

Many people believe that the advent of Big Data and its widescale uptake will bring about the end of Business Intelligence, but does this really need to be the case? According to some experts, the answer is no, because the two operate on very different levels.

Analyse what?

Analysis is the key word whether you are making use of Business Intelligence or Big Data, which brings about a raft of comparisons between the two, but when we look at what they are actually doing, they offer something of a contrast.

While BI focuses on looking at historic trends of customers and their behaviour in order to develop a future strategy. It is based on the way people buy things and the way certain demographics act.

On the other hand, Big Data is used in real time, allowing companies far less time to react to what they learn, but much more of an ability to simply put into action something that will change the way something is being done.

Hence, the two methods require a very different set of skills in terms of IT, but also a much changed range of attitudes and approaches, with BI staff today starting to be able to offer a much more in depth understanding of the business, according to Sandeep Sachdeva, vice president in the global business information practice at Sogeti.

“In retail big data makes possible just-in-time advertising and just-in-time couponing to attract customers as they walk into – or past – a store,” Mr Sachdeva said.

All about the user

In addition to simply having a different approach to the technology though, there is also an inherent desire to use both BI and Big Data in any company because of BI’s much more user-oriented interface. Whereas Big Data requires little more than having a computer churning out results based on masses and masses of information the human mind could never hope to process, BI still has somewhat of a need for an end user to carry out the analysis.

Mr Sachdeva said that in the current market, there is still a degree of mistrust in numbers crunched purely by machines, and this means there will always be a need for the skills that BI analysts possess.

This was a theory backed by Lauren Sager Weinstein, head of analytics at Transport for London (TfL), who said that even though the company would have a far more reliable set of results from crunching the numbers of millions of annual fares, this is still not seen as being as “good” a source of information as the results of analysing surveys both online and through face-to-face interactions.

Trial and error: The creation of effective BI strategies

Business Intelligence is all about turning the data that companies collect about their clients, customers and markets into something of a useful business strategy through a series of theories, methodologies, processes, architectures, and technologies.

It is something that a number of companies around the world have bought into in recent years, thanks to the promises that it can help to develop all new business strategies and allows leaders to see insights that might never have been evident before its inception.

However, according to one company, the key to making the most of this is to develop a flawless strategy for its use, something that it says takes time and great care, as well as a level of trial and error, to achieve.

The most common problems

In order to develop the perfect strategy for the use of BI, you need to realise what the most common pitfalls of the technology are in order that you do not fall victim to these.

According to Matillion, the main issue that leads to problems with BI strategies is the fact that people will put their focus on not only the wrong elements, but also in the wrong order.

It said the very best strategies are focused, benefit-led, and affordable.

Another issue that can rear its head in the use of this technology is that some companies will fail to adapt.

BI is a relatively new technology, and as a result it is always adapting and changing to meet demands and make the most of raw data available. The use of BI now is different to how it was ten years ago, and vastly different to how it will be in ten years, and a failure to realise this can be one of the biggest hurdles.

Getting the right people

This applies partially to the last of the main problems that can come to the fore in the use of BI.

Many firms will make the mistake of not putting enough money into this part of their operation because they are as yet convinced. A lack of anecdotal evidence on the promised returns on investment makes them nervous, and stops them from spending all out on its implementation.

However, by putting money into hiring the right people who know how to make it work, and more importantly how to move with the times, who can focus all of their time to the task, they will have a much improved chance of success.

Always stay affordable

One of the biggest failures of BI, according to Matillion, is the fact that companies will abandon dreamed up strategies if it looks like they may not get out of it what they dreamed.

Some will devise wonderful and long winded approaches to the use of the technology, but do so without checking they can afford to follow through.

It is important then to keep checking strategies throughout the process so you don’t find you have wasted time and money on something you can’t even use in the long run.

Big Data: Not the be all and end all of business

Big Data has become something of a buzzword in the business world in the last few years, seen by many as something of a magic tool that can help them devise all-conquering strategies and give them a competitive advantage they could only dream of in the past.

However, it should not be seen as a wand that can just be waved to cure all problems and create the perfect operational structure, according to one leading voice in the use of the technology.

Speaking at the IAB’s Engage Event, Bryan Melmed, director of insights at Exponential, a company that promises “to turn ‘big data’ into advertising intelligence”, said that Big Data shouldn’t be viewed by anyone as the answer to all their prayers.

“Data is not going to solve every problem”. Data is only human, he said. “It’s touchy, so beware of putting your full faith and trust in big data.”

He said that one of the biggest problems comes when the technology used in the analysis of data on this massive scale comes into contact, there is always a degree of distortion, and it is here that most care must be taken to ensure that problems are kept to a minimum.

Mr Melmed described the notion as being “very messy”, adding: “This is where the human element comes in. Humans live in an analogue world, and when you’re dealing with analogue data, there is a signal-to-noise ratio – and the more you listen the more you get confused.”

But is this where one of the main strengths of Big Data comes in? The sheer amount of data that we handle when we are looking at Big Data almost defies human logic. We use it because it allows us to analyse far larger amounts of information than we ever have in the past, and it is this that develops all new strategies.

It almost forces leaders to abandon the way they have seen customers in the past, and instead look at aspects beyond the stereotypes.

While in the past we may have targetted products at the 18-25 year old sports fan, or the 30 year old mother, we can now look far deeper, ignore the previous ways of thinking and devise a strategy based on more than logic – it has brought about the age of true reason.

“Our brains are designed to create patterns and shortcuts, but that does a huge disservice to every single person we deal with, who is not easily summarised by 30 or so demographic characteristics,” Mr Melmed added.

The best tool, however, he concluded in his speech, is reality. It is important to know that it has limits to what it can achieve in reality.

“No, it’s not going to predict terrorist attacks before they happen,” said Melmed. “It’s not going to cure cancer. And we are not going to solve Wanamaker’s problem of figuring out how much of our advertising is wasted,” he quipped.

Once businesses recognise that there are limits to what Big Data can achieve though, it is possible to realise the true potential that it has to assist us in bringing a new dawn to how we advertise and who we target.

How can BI help your operation grow?

Business Intelligence (BI) software is becoming increasingly popular across some of the largest businesses in the world. It allows managers and leaders the chance to make more informed decisions than ever before, as well as helping them reach an increasingly larger audience.

However, while there is a greater level of uptake in BI use across the business world, for many people who are thinking about starting a business, the term will still be alien, and it is up to firms providing the software to let them know how BI can benefit them.

According to Nathan Robertson, writing for Business2Community, there are three main benefits that can be seen for companies from the use of BI.

The main goal

The business sector, and any number of the different markets therein, can be difficult to negotiate. The rapidly rising levels of data in recent years have also made it harder to analyse information available and adapt businesses accordingly.

However, BI software makes it easier to gather, analyse and dissect much much larger amounts of data and make decisions based on this.

It means that decision makers in any company are able to have a far easier time of seeing current market trends and customer bases, as well as the way they react, improving their own operation to meet the demands of consumers.

The range of information available can also be changeable, with some firms choosing to see a wide cross section of the data available, and others choosing to focus on key areas and the information pertaining to this to make more targeted decisions.

Accessibility

It used to be the case that BI was a big project with a focus on the largest companies in the world, but this is no longer the case as the market has diversified and adapted.

It is now the case that smaller firms can also benefit, with bespoke BI packages allowing them to find something that is less all-encompassing, and fits not only their needs better, but also their budget.

They can now find software that is function specific, broader intelligence solution suites that have been pre-programmed, solutions that are automatically integrated, software-as-a-service solutions as standard, whereas these all might have been out of reach to them in the past.

The bottom line

At the end of the day, when it comes to any business, the bottom line and the profits are the most important factors to consider.

According to Business2Community, this is an issue that is already being addressed with many firms, with some starting to report an increase in the obvious signs of success that exist for their own operation through the use of BI software. For many, it allows them to create contingency plans and safely manage their business goals.

The expert also said that while many smaller companies may not immediately see the benefits of BI over the likes of ad-hoc analysis and the use of the more traditional spreadsheets, the use of it now is a very useful tactic so they are aware of it when it does start to have positive effects when they start to grow.

Cloud computing: The benefits for staff retention

In an ever-changing business world that is dominated by technology and the advances therein, it’s often tempting for businesses to follow the agenda and make alterations to what they are doing without thinking about why.

Examples of this can include issues such as cloud computing, which has become ever more popular for remote storage and the ability to lower cost through a lack of physical hard drives and other hardware.

However, there are also other benefits to such an advancement, and firms need to be aware of these when they look into cloud adoption.

For example, one of the biggest benefits cloud computing has brought to companies across the world is the ability to allow people to work from any location as long as they have internet access, giving them instant access to files and emails from anywhere.

Not only is this preferential to businesses, which can reduce office sizes and lower overhead costs, but it is also a vital consideration for staff. This can mean cloud computing is key for companies to retaining the very best members of their staff.

According to a report published by recruitment firm Office Angels, some 59 per cent of staff would simply consider walking away from their current job if the chance to work flexibly and from remote locations was not available.

And this is an issue that becomes even more prevalent as staff become more experienced and potentially more valuable to the firms they work for. Some 70 per cent of people aged between 25 and 34 – the age at which many will start families – would find a new job if they could not work flexibly.

However, this is not a notion often recognised by businesses, and of those firms that were questioned for the survey, only some 24 per cent said flexible working is something they are looking to implement in the future.

Angela Smith, managing director of Office Angels, said: “Flexible working is clearly more important to employees than ever before, and childcare is not the main driver.

“It is clear that a working culture that can adapt to a worker’s lifestyle is becoming increasingly important, with employees wanting to achieve the optimum work-life balance.

“However, opportunities to work flexibly should be clearly and transparently communicated to employees, with a working model in place that can be adapted. The right balance needs to be struck.”

Cloud computing does not come without its risks though, and this is something that bosses should also be aware of when it comes to adoption to please staff.

While they can risk losing some of their best workers by not employing cloud computing, they can risk their entire operation by failing to implement proper security systems.

Staff who are to work from home should be trained entirely on the problems that can be caused by failing to be as resilient and resistant as possible to the dangers of hacking, data loss and data breaches, before they are allowed to do so.