Business Intelligence Still A Problem For Small And Medium Firms

An InformationWeek article released earlier today (US EDT) highlighted the struggles that small and medium size businesses still face in attempting to implement business intelligence (BI). The article, which quoted a survey by BI vendor LogiXML, noted that nearly half of all non-technical users polled were dissatisfied with their BI implementations. The main hurdles are cost and lack of IT staff, cited by 27 and 26 percent of respondents respectively. The 575 respondent firms polled by LogiXML were predominantly small and medium in size.

Mostly, the survey results are a rehash of the same tired story business intelligence professionals have been hearing for years: the seemingly eternal disconnect between the business and IT. The business says "IT doesn't listen to us" while IT says "the business doesn't know what it wants." In fact, there's more to both of these statements than meets the eye. Let's examine each.

"IT doesn't listen to us"

In my experience the IT analysts and developers generally don't set out to ignore the users (who are, after all, their customers). But just like a kid with a new toy, sometimes the IT team can get distracted by the bells and whistles the technology provides. Another problem is that the IT personnel may have an excellent technical background and may have taken some business coursework at university, but that doesn't mean they have a solid understanding of your business. This is especially true if they have come from a more traditional programmer or analyst background. They may be trying to listen, but may not know the right questions to ask. If there is a skilled business analyst in the mix this should not be a problem. But often, especially in a small business setting, "IT" is a bright, inexperienced person with solid technical skills but whose "soft" skills are still developing.

"The business doesn't know what it wants"

Of course the business knows what it wants: higher profits! If it's a small or medium size firm we can add robust sales and market share growth. The problem is that the business doesn't necessarily know how to translate those wants into requirements that IT can act on. Just like the IT folks the business can get distracted by the pretty pie, bar, and waterfall charts that a BI tool can pump out. They can lose sight of the basic business need and even begin to believe that "the tool" can solve their problems. The tool is a tool. Especially with a first-time implementation, unless you have a specific business-focused problem you're trying to solve (such as automating financials)  it's best to start with customers and products and move out from there. For more on this see my article on thinking BI(g).

The fallout of all of these problems is all too often that either the business rejects the solution IT offers and decides to go it alone. They quickly run into trouble because they lack the technical expertise to do the implementation themselves. Or the business brings in an outside consultant who sets up a BI system and then departs, leaving the business dependent on a now-adversarial IT group. Or the BI implementation simply never gets off the ground. In the end the best hope is for the business and technical staff to work together to try and plug as many holes in understanding as possible.

The cost problem is the other hurdle most likely cited by the LogiXML survey. So it's no surprise that Microsoft is way out in front with the small and midsized segment. After all, most BI vendors, such as IBM/Cognos, Oracle, Microstrategy, etc. feature a sales and marketing model that focuses on establishing a long-term solution selling relationship that they hope will grow (along with revenues and profits) as the customer grows. Microsoft's model is based on lower overall prices from version-to-version, and that seems to resonate well with smaller customers. If your Microsoft implementation doesn't work out, you're out a few thousand dollars. If the other vendor's implementation doesn't work out, you're out a few thousand dollars more and have the vendor rep pestering you until you cry uncle or go out of business.

Sadly, too many small businesses jump in the deep end of the pool and find themselves wishing they had dipped their toes in first. Take it slow, and remember: your business model should drive how you use your BI tools, not the other way around.