The 5 Top Things Smaller Businesses Don't Know About BIThe 5 Top Things Smaller Businesses Don't Know About BI

Not all BI projects start with an expensive and lengthy investment.

Many executives at smaller companies don't think they have the budget to invest in business intelligence applications, leaving the torturous task of pulling information from Excel spreadsheets or running analyses from transactional databases as the only option. BI vendors say once a company expands beyond a 10-person shop, it becomes a financial and practical necessity to analyze customer data to predict future trends.

Many vendors including IBM offer affordable servers preconfigured with BI software to help small companies get up and running quickly, sometimes within days. IBM Balanced Warehouse C Class for small companies starts at $15,000. For midsize businesses, Information Builders offers packages for companies that generate $500 million in annual revenue starting at $60,000.

The plug-and-go servers allow small and midsize companies to integrate data sources through the network into the business intelligence application. The vendors say the plug-in server minimizes the need for IT resources, accelerates deployment, and lowers costs for ongoing maintenance.

Data warehouses aren't required to build a successful business intelligence project.

Limited IT resources to build out a data warehouse and deploy business intelligence software often stop smaller businesses from even considering a system. While many large corporations begin both projects simultaneously because they have the budget and resources, it's not necessary.

Since transactional systems don't contain historic facts and figures, data warehouses are required only to analyze past sales information to estimate future trends. Smaller companies can get started by deploying the business intelligence software first and build out the data warehouse as the project matures. For instance, Caroline Seymour, Cognos' associate VP of midmarket strategy, says Cognos Now links to transactional systems through the data-integration capability, allowing companies to build out analytics stored in memory. This provides instant visibility to information.

Multibillion-dollar companies analyze only 20 percent of the data they collect and store. Small and midsize businesses can outperform much larger organizations by increasing that percentage.

Eastern Mountain Sports, an 80-store retail sporting-goods chain with 250 corporate employees, designs promotions based on real-time information from point-of-sale terminals by feeding the data back into its business intelligence system based on Information Builders' WebFocus and iWay software. If the retailer starts a promotion on Thursday afternoon, by Saturday morning it knows whether to continue with that promotion or switch gears.

For Eastern Mountain Sports, BI software provides the ability to drill down into the data, analyze each transaction, and increase the percentage of collected data that they analyze.

BI projects can transition into revenue-generating investments by designing reports and selling information to partners and customers.

BI applications give companies the option to build reports and sell information back to their clients. A Canadian credit-card company, Moneris Solutions, which processes transactions for retail stores, collects raw data on customer purchases, processing the information through BI software. It builds reports and populates them with customer data collected on behalf of the retailers, turning the BI expenditure into a means to generate revenue. The reports let retailers monitor the type of merchandise cardholders buy at their stores.

Companies that contract employees for temporary work can profit from a BI investment, too. One employment contractor, Administaff, bought a BI application and began running reports for business clients detailing the cost to hire temporary staff for specific departments within the companies. The project was so successful that the company set up a data feed from its human resources department to run analysis on all its employees, not just temporary staff.

Combining BI with service-oriented architecture (SOA) can streamline business processes and allow more people across a company to access and benefit from the data.

Consider the data that accounts payable gets from a report designed to determine potential revenue that could be generated from a particular customer over the next 10 years. Ideally, the marketing department could use that information to target special deals each time the customer visit the company's Web site.

For example, iWay Software says its client VP Buildings, a maker of steel buildings, worked with the company to create a real-time SOA project to bridge the gap between VP's custom-written Microsoft .NET automated shop-floor data-collection and manufacturing system and its PeopleSoft ERP suite. This allows shop-floor workers to receive or consume new inventory using the .NET application, but update the PeopleSoft inventory module in real time. The integration aims to streamline inventory, purchasing, and procurement requirements and the company uses a Web-services interface to transfer data. Ideally, the Web services interface will make the information processed and analyzed by the BI system easily available to others in the company.

Laurie Sullivan writes for several technology and business publications, including RFID-World.com, information, Marketing Daily, and Advertising Age.