Business Intelligence: The Crystal Ball of Champions

By Lena West | Posted April 11, 2006

Any small business owner knows that competition is tough, but he or she may not be able to pinpoint exactly what changes are needed in order to get to the top. Conducting business as usual may no longer suffice. How can small businesses identify noteworthy trends and make better decisions faster? Answer: business intelligence.

Business intelligence (BI) software is one of the most strategic investments that a business can make. Using data mining, reporting and querying, BI helps businesses understand, monitor, manage and respond to specified metrics. This type of software empowers decision-makers — and staff — to connect the dots around key business numbers in a way previously unimaginable. BI helps you figure out:

  • Which customers are profitable?
  • Which customers appear profitable but aren't?
  • Are you close to — or far from — reaching critical milestones?
  • When is the best time to launch a marketing campaign?
  • What was the best performing product or service last quarter?

Simply put, business intelligence is the crystal ball of the 21st century.

The Cobbler's Son Needs Shoes
Paul Lumpkin, president of Plexus Scientific Corporation — a science-and-technology consulting firm based in Alexandria, Virginia — was tasked to find a real-time reporting tool for a client. He needed a tool that could gather, store and analyze the client's disparate, seemingly unrelated bits of corporate data to help them determine their current situation and to paint a picture of their future. No small feat.

Lumpkin not only found software to do the job but also put together a procedure for using it. However, soon after they implemented the solution, the software company that had developed the product went out of business. That was when Lumpkin decided to make lemonade. In a bold move, he purchased the failed software manufacturer simply because he believed in the product, the value of business intelligence and its results.

Lumpkin wryly recalls the period after he bought the BI company but before Plexus had started using the BI software itself. "We would suggest the software to prospective clients, and they would ask if we were using it. We decided that the cobbler's son needed shoes, and we implemented the BI process in-house."

He also says that companies get to a point where walking down the hall and sharing your business vision with employees just doesn't cut it any more. "Eventually, you need to capture and communicate your strategy and put it into a format that anyone can understand," says Lumpkin.

Before he made BI a cornerstone of the business process at Plexus, Lumpkin suspected that the company suffered from informal cliques that were almost usurping the formal business structure. He had no idea how right he was. During the implementation, management realized the informal structure really had a toehold, and it was holding them back from achieving critical goals. The "us versus them" mindset had to be rooted out before it began to cause serious damage.

No Walk in the Park
With all its benefits, implementing BI is not a simple matter. There are cultural shifts and procedural transitions that need to be kept on the radar when considering a BI rollout.

In addition, the rollout itself can take anywhere from two weeks to six months. Then there's training and support to consider. Lumpkin advises, "Get someone in to facilitate the initial strategy session; it's inexpensive and invaluable. And the sooner you do it the better. It's hard to maintain a calm atmosphere when processes are in flux. So get it done."

Lumpkin also notes that while he thought he had a handle on Plexus' business strategy, he soon found out otherwise. Putting the new strategy into plain English took a lot more effort than originally thought. The company started out with what appeared to be 16 solid goals, but at the completion of the BI strategy session many of the goals couldn't pass muster. Plexus wrapped up the review process with nine tight, clear goals effectively cutting their areas of focus almost in half.

The Silver Lining
Although there were plenty of surprises in rolling out their BI initiative, Lumpkin reports Plexus has, "increased in size by 50 percent over the past couple of years."

He also notes that company divisions are working together in a way they never had before. "The new level of understanding that divisions have about each other is amazing," says Lumpkin. The result is that Plexus delivers better organizational planning services and can help clients develop even better solutions.

Additionally, Plexus has increased both its level of sophistication and its capability to secure results from management. "Today everyone is concerned with ROI — the return on investment. At Plexus we're concerned with ROM — the return on management. In a world where talented managers are as scarce as hen's teeth, you need to maximize the return on your management's time," says Lumpkin.

Other Players
Major player SAS has realized the value of the small business market and offers its product, Enterprise BI Server. SAS is a giant company that provides services for big businesses, hence the word "enterprise" in the product name. However, SAS does serve small companies, using parts of the same software they offer big companies.

"We provide solutions that help companies tackle the most difficult business decisions they face. They need to have a better forward-looking view of their business. Which is why we offer software that is available in components so that small businesses can tackle what they need to focus on first," says SAS Lead BI Strategist, Christina McKeon.

However, a section of a Web site does not a committed small business vendor make. Ali Jani of Everest Software, Inc , feels that his company has a bead on the small business market. "With over 3,500 customers using Everest's BI software every day, our product was specially built for the small business market in 1994 and we're devoted to making improvements as necessary," he says.

While McKeon says the SAS solution "works well for basically any company type," Jani notes that "Everest works best for companies that have anywhere from 10 to 75 employees."

Jani sums up the reality facing many small businesses. "The market has forced small businesses to act like big businesses. Doing status quo business no longer works, and Internet advances provide increased opportunities. Small businesses have to either invest in a BI solution or suffer and limit their growth."

Lena L. West is the CEO of xynoMedia Technology. XynoMedia helps small businesses that are tired of technology being a pain in the assets. You can reach her at contact@xynoMedia.com.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!


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