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December 19, 2012

BI and Midmarket: Overcoming the Identity Challenge

By Stefanie Hoffman

Enterprises recognized early on the potential ROI and benefits of business intelligence and analytics solutions and have since become some of its most ardent adopters. And, these large organizations, with their unique, high-value demands for specialized software, database tuning and other niche systems, are the only ones with enough resources, scale and reach to justify a costly and time-consuming BI investment. Right?

Not really. Recent research indicates the SMB, while lagging behind, is making more assertive investments in BI solutions.

But what about that murky, undefined sector between these two market segments?

The midmarket, once perceived as a larger, more unwieldy extension of the SMB, is recognizing a pent-up demand to detect market trends, serve their customers and differentiate themselves in the market. The sector is surrendering its spreadsheets and manual processes for intelligence-based solutions that extract actionable insight on their unique needs.

It’s a trend that’s picking up steam — albeit in fits and starts — and will gain momentum. The need for BI in the midmarket is starting to be unearthed. According to an IBM CIO study, 83 percent of midmarket CIOs cite analytics as their top priority for future IT investment.

The survey finds that 72 percent of CIOs at mid-sized companies plan to integrate business and technology to drive innovation. These CIOs say deeper insight and intelligence (77 percent), people skills (68 percent) and client intimacy (67 percent) will top their priority lists over the next five years. They say they use or intend to transform data into actionable information using tools like data warehousing (64 percent), visual dashboards (64 percent), master data management (63 percent) and client analytics (63 percent).

Competition in the space is fierce. Midmarket businesses, along with small enterprises, are responsible for 65 percent of the global GDP, represent more than 90 percent of all business and employ more than 90 percent of the global workforce, according to IBM. Perhaps more than any other segment, the midmarket faces enormous identity challenges, making it imperative for its players to distinguish themselves in the marketplace.

The midmarket’s gravitational pull toward BI isn’t surprising. Mid-sized companies are strapped with greater headcount and increased infrastructure costs without the same resources and budget as their enterprise counterparts. But, of the 630,000-plus companies that constitute the midmarket segment, only a third have deployed BI solutions. While most see BI as critical, the majority have yet to do anything about it.

It’s a conundrum that will likely change in the future, as BI solutions become more accessible, more scalable and easier to deploy – and once a critical mass of BI vendors makes a concerted effort to hone in on the midmarket’s unique needs.

Until then, the midmarket will accelerate its BI investment one baby step at a time.

For more on this succession, 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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