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November 14, 2012

BI and the SMB

By Stefanie Hoffman

Once upon a time, business intelligence and analytics tools were relegated to large-scale enterprises with cash to burn and an army of data scientists standing by to translate the raw data into actionable information.

But not anymore. Over the last few years, SMBs and lower-market verticals have increasingly adopted BI and analytics tools to create efficiencies, improve operations, maximize profits and achieve a competitive edge against industry peers.

That fact was underscored in a survey issued by analyst firm Techaisle that indicated BI used by SMBs will more than double by next year. According to the results, 22 percent of SMBs currently use BI, while another 27 percent are planning to adopt BI within the next year.

The numbers reflect BI adoption growth in larger enterprises. The 2011 Business Analytics and Optimization, a survey conducted by IBM Institute for Business Value and the MIT Sloan Management Review, shows 58 percent of large organizations rely on analytics to create a competitive advantage, a figure up from 38 percent a year ago. However, SMBs are faced with vastly different challenges than their enterprise counterparts – among them being limited resources, a lack of expertise and qualified IT staff, time constraints and glaring awareness gaps.

Despite these limitations, SMBs are gravitating toward analytics in record numbers, attributed to a variety of factors. For one, tools have become more streamlined, intuitive and user-friendly. It stands to reason that Gartner’s 2011 and 2012 BI Magic Quadrant surveys hail “ease-of-use” as the number one purchase consideration for BI platforms.

It’s an attractive selling point for cash-strapped SMBs often restricted by limited budgets and lack of IT staff. SMBs might not necessarily need to keep expensive data analysts on the payroll, but instead cand leverage dedicated analytics tools to conduct analysis and turn data into actionable information via an intuitive user interface.

Technologies such as the cloud have also eased the road for BI adoption in the SMB. In general, SMB adoption of cloud-based services has skyrocketed because of ease of use, scalability, less infrastructure requirements and significant cost savings. Many SMBs are also turning to cloud-based BI usage, according to TechAisle.

Cloud-based BI is anticipated to experience significant growth, according to TechAisle, which found that 47 percent of respondents are planning to shift from spreadsheets to cloud, representing a 59 percent increase from last year. And IDC projects the software-as-a-service BI market will experience double to triple growth, expanding at a CAGR of 22.4 percent through 2013.

The rising tide of mobile applications, which gives users the ability to access BI via mobile devices, has propelled adoption of BI in general. Those mobile BI trends have gained traction in SMB markets, which have benefitted from the explosion of smartphones and tablets.

SMBs are adopting BI for the same reasons as enterprises: They want to achieve a competitive edge, make significant market gains, find inefficiencies, accelerate productivity and track down security threats. And perhaps above all else, they want to reduce costs and increase their overall ROI. BI and analytics will help them get there.

For more information on the SMB trend with BI, keep an eye on the IBM Cognos TechTalk Intelligence Center. It’s as dynamic as the data, applications and processes it serves to advocate. We encourage you to check it out today by clicking here.

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