That’s a great question. Business Intelligence, Analytics, Data warehousing, Performance Management, KPIs, Dashboards and Scorecards are all terminologies that once were restricted to the domain of large organisations. There was and probably still is a perception that “only” large organisations need such tools due to the complexity of their businesses. Likewise it is also perceived that small businesses are small and not so complicated and almost always run on tight cash flows. Therefore they do not need business intelligence tools.
In reality, business people have been using business intelligence since the beginning of business itself. For example, an Indian street side mobile snack bar vendor noticed that he gets twice as many customers just by moving his cart a few metres under a tree and setting up a few low chairs for customers to sit and cool off from the hot weather. It was extremely inconvenient for him to lug around those chairs and more so because the ground wasn’t flat enough to park his cart easily. But it helps his business and so he goes through the trouble of setting up his cart with pegs to support the sloping land surface and put up a few chairs every single day. As a result, he experienced a significant increase in revenue and profits. Fast forward a few years and today he owns a few restaurants of his own.
You’d say, that’s very smart. Today we call it Business Intelligence at the most simplistic level. It’s just taking a good look at data to make smarter business decisions that help grow the business.
In days past, most business owners did very much the same. They were more dependent on “observational” data as opposed to “real” data. As a result, not all of their intuitive and gut feel business decisions actually worked. Some did and they were fortunate, but many didn’t and went the wrong way.
But today, most small businesses have easy access to “real” data and yet most business owners still rely on gut feel and intuition when they don’t “have to”. The data remains mere “information”. The “information” doesn’t translate into “ammunition” for better business decisions. I believe this is one of the bottle necks that choke the potential of small businesses and prevent them from growing and becoming a formidable competitor to the larger ones. Much of this has got to do with the mind-set that business intelligence tools are too expensive for small businesses and the ongoing consulting services are unaffordable. One other reason is also a lack of ambition to grow and compete with the larger players. What is often neglected is the fact that the larger players didn’t get large without making smart business decisions along the way.
Reasons Small Businesses Should Invest In Business Intelligence
- The first most important reason small businesses should invest in BI is because it can help them compete with the larger players and even potentially become a formidable competitor with increased market share and revenues. When implemented correctly, the existing data can provide valuable insights into business trends and potentially untapped opportunities that otherwise can’t be seen. The tool can also provide insights into how operational costs are directly related to customer gains and losses.
- The analytical information derived out of the BI tool can help maintain a much healthier cash flow which is critical for small businesses. The budgeting tool within a good BI solution can help monitor the spend trends and automatically adjust the budgets on an ongoing basis to maintain the bottom-line at an acceptable level.
- Accomplished leadership mentors often times say “Whatever can be measured should be measured”. This is all the more true for small businesses because cash flow is critical. The more a small business is able to minimize wastage, the more the opportunity for growth. Wastage could be in terms of unnecessary duplication of tasks, unwise investment of man hours, non-working marketing strategies, unwise purchases of raw material and much more. A good BI tool can help you gain insight into areas of unnecessary wastage and keep the organisation on track with strategic goals and key performance indicators.
- Contrary to popular perception, Business Intelligence software’s are not very expensive. Yes, “expensive” is a relative term. But many small businesses have invested in “business coaches” which also cost a lot, and they have seen amazing results. There are several options for Business Intelligence solutions with costs varying from very low to very high. Surely there is one out there you can easily afford. It actually costs you more “not to have” one.
- Again contrary to popular perception, consulting services are not expensive either. There are good BI solutions that are designed with the end user in mind. This means, its self-service style with zero programming or coding required. A simple drag and drop tool kit enables you to extract intelligent information from your data when you need it and where you need it. A few days of training is all that is required.
In conclusion, if you are a small business owner and are still sceptical about investing in a business intelligence solution, let me encourage you to contact any vendor near you and request for a no obligation demo. Have a look at what it can do, analyse the costs and begin to dream. Take a few weeks if required to just mull over the possibilities. Find out if you can implement it in a phased manner or maybe through a monthly subscription mode which you can cancel at any time. Even better, request for a Proof of Concept implementation and try it out. Surely you can do that and test it out for 3-6 months. I believe with conviction that Business Intelligence is something absolutely necessary for any small business that is ambitious and intends to grow.
There are some small businesses out there who are content with where they are at and have no ambition to do anything different or even to expand. Well……but you sure aren’t one of those….because you took the time the read this blog.
Santosh Chandran is the Business Development Manager for BOARD Management Intelligence at Olympic Software. He regularly blogs about business intelligence and corporate performance management. You can follow him on Twitter or on LinkedIn. Please contact him directly if you would like to find out how BOARD can improve your business results through better decision making, phone 09 980 3964 or email: firstname.lastname@example.org