Do small businesses need BI?
Not just for large enterprises, anymore
Published: 7 July 2009 12:06 GMT by Danny Bradbury
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Is business intelligence too much bother for smaller organisations? Danny Bradbury looks at how analytics can work for all sizes.
When your business costs nine pounds per minute to run, it is imperative that you maximise your revenues. Luckily, David Wilkinson, the IT director at York Minster, is also the assistant to the chief accountant, so he understands how technology can help managers to find potential improvement in the business.
Wilkinson uses a business intelligence tool called QlikView to help the cathedral analyse employee performance and sales in a bid to buoy up revenues.
This is one example of a small business that is using business intelligence software - a technology that has historically been viewed as a tool for larger enterprises.
"The majority of our funds come from the tills," Wilkinson says, recalling that the Minster, which receives no state aid, eventually had to begin charging admission rather than relying on voluntary donations. The cathedral wanted more information than its existing accounting packages were able to give it about the operation of the tills.
"One of the main things was employee performance in terms of how well they pushed GiftAid," Wilkinson says. GiftAid enables the Minster to claim tax back on purchases if customers provide their name and address.
This still represents a far simpler data set than many business intelligence deployments. When many people think of business intelligence, they think of multidimensional data cubes, complex analytics and extensive data warehouses. But the product category spans different levels of sophistication, argues Andreas Bitterer, research vice president at Gartner.
"These are not global companies, so there's a skills difference, there are fewer users, generally, and less sophistication," he says of small businesses. "The main difference I see is that the tool set that a mid-market company would use is more reporting focused, and less involved in high-level analytics with global data warehouses."
Boris Evelson, a principal analyst at Forrester research, says that for many smaller organisations, these reporting tools can often be built directly into the line of business software that they are already using, such as an ERP or CRM package.
"If your entire business is run on a single package, then you don't really need a separate business intelligence application," he says. "For example, I work with NetSuite sometimes, and the reports that they produce out of the box are pretty good. I probably don't need to go anywhere else."
For many small businesses, working with one application may even be preferable, because trying to generate a single view of data across multiple sources may be too ambitious.
York Minster's Wilkinson took the opposite approach. He avoided the reporting tools in the Sage accounting system he was already using and opted for the separate business intelligence tool. "We needed more information than Sage was giving us," he explains. "We evaluated several services, including the one that Sage was offering themselves."
QlikView is offered as an online service, an alternative to a product hosted on the premises. With many small businesses turning to software as a service, could this be a way to simplify deployment and make it cheaper?
Wilkinson chose not to run the app online, instead running it directly on his Sage server.
Gartner's Bitterer is sceptical about online business intelligence. "While it may be a great option for mid-market companies, the challenge is how we get the data from our applications into the cloud. There may even be legal issues associated with that," he warns.
Another way for small businesses to minimise the cost of business intelligence is to use open source tools such as Jaspersoft or Pentaho.
Just remember - the likelihood is that whether an SME chooses proprietary or open source products, they will have to take on the same data integration work necessary to get information from their line of business applications into the business intelligence tool. This is unlikely to be something that skills-challenged small businesses can take on themselves. Wilkinson used a third-party service provider for that process.
So did BI pay off at York Minster?
Wilkinson doesn't have return on investment figures for the administration, although in 2008/9, the organisation did double the amount it claimed on GiftAid compared to the previous year.
"Traditionally, we haven't looked at ROI," he says. "Generally, if we've invested in something, we've seen more esoteric benefits like getting the job done and encouraging employee performance."
Perhaps for many small businesses wanting to leverage the benefits of business intelligence, this might be the best way to measure their success.
Reader Comments (1)
Jennifer Cloer Tue 7 July, 2009 9:38pm
Hi Danny - this is an important story with a...