In today's very competitive and changing business environment small to medium enterprises have to face high standards. A recession demands that all organizations have to be successful, be able to lift pressure by giving more for less to fulfil customers' expectations as they may struggle for survival. A better opportunity to achieve those goals and to get out of trouble during a crisis enables large corporations or smaller firms to invest in new technologies. One of those technologies is Business Intelligence (BI) - an analytical software and competitive advantage for effective decision making. Now small to medium sized enterprises (SMEs) cannot rely solely on their intuition or even the best guesses of owners or managers. The current data and detailed information supplied by BI are extremely important for them because it can increase profits, revenue, effectiveness and long term strategies of the company. But is Business Intelligence (BI) affordable for SMEs who are described as organizations with a narrow budget and limited amount of employees? Are web-based and hosted BI products more affordable and useful for SMEs?
Define Business Intelligence (BI) - their benefits and the advantages
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Business Intelligence (BI) hosts a wide group of applications, technologies, tools for collecting, filtering, sorting, integrating and analyzing. It supplies access to information and data to assist organization users in effective decision making and improving organization performance. Decisions taken by enterprises take place at all levels from organization strategy to operational processes. These are applications, query tools, data analysis, reporting etc.. These tools help organization users manage a wealth of data and filter accurate and needed information. BI is not sorting information (that is data warehouse); in addition it is more all-embracing than data mining. The main aim of BI it is to present and illustrate its up-to-the-minute real value (information, knowledge) in a required format (dashboards, reports, data mining, analytics or scorecards) conserving users' time. BI helps to connect users, employees with data in an easy-to-use method. People in a simple way can set targets, view outcomes and interpret the numbers. BI appliances can show everything that an organization requires like salaries, stock levels, outstanding client balances and even such things like average water, electrical usage or student absence at a university.
Business Intelligence (BI) is a computing industry's aid which has a beneficial impact on an organization performance. This tool highlights possible opportunities for a company and also recognizes their potential problems. Data Warehousing Institute on http://tdwi.org/ defines BI as 'the processes, technologies, and tools needed to turn data into information, information into knowledge, and knowledge into plans that drive profitable business action. This topic covers data warehousing, business analytic tools, and content/knowledge management.' Data is collected and analyzed into information; following this, information is sorted and organized into an appropriate model, and then the knowledge creates the Business Intelligence (BI) model for an organization.
Tools of Business Intelligence (BI) bring on faster, better, accurate business decisions across every department, make users' work much easier, beneficial and effective. It allows organizations to cut data management costs; also to understand and even predict the future. Balanced information and detailed analysis of organization data helps organizations to stay ahead of competitors with confidence. BI tools can help to give a clear vision of businesses goals (even advance their corporate goals), identify and analyze trends and opportunities that could be helpful and even help to identify threats. It can also help to take action about future growth.
In the market all kinds of enterprises can find a variety of BI products adapted and tailored for their businesses. Often encountered and chosen tools are: data warehouses, document warehouse, scorecarding, dashboards, business performance management, OLAP, text mining, data mining (or knowledge-discovery in databases) and data visualization. All information needed by a company is displayed by computer graphics (without having an access to software tools where that information is held).
The tools below are most often associated with Business Intelligence (BI).
OLAP (Online Analytical Processing) is an element of a wide group of Business Intelligence (BI) for analyzing and providing quick answers in a reporting system. The OLAP server plays an important role in that process and it is placed between a user and DBMS. This software is usually utilized in data mining.
Always on Time
Marked to Standard
Dashboards show real-time data. This information is simple, visual and easy to read for a user like graphics, tables or dials. It controls and keeps important information and data. Performance dashboards are very popular and common among large corporations.
Scorecards similarly like dashboards are a visual demonstration of important data to attain business knowledge, their goals, objectives, strategies or performance.
CRM is a tool which helps enterprises to organize the data and stored information connected with their clients. This software is responsible for collecting data, analyzing them and next making them accessable for users from all departments. CRM is considered as an expensive system, however, smaller enterprises can now purchase cheaper CRM applications tailored especially for their needs.
The Business Intelligence (BI) Guide on www.thebusinessintelligenceguide.com/bi_solutions/index.php show the BI solutions by vendor. These are 'BusinessObjects [SAP], Cognos [IBM], Databeacon, Hyperion [Oracle], IBM Analytics, Information Builders, iQ4bis, LucidEra, Microstrategy [HP], Microsoft [incl Proclarity], NetSuite, Oracle BI, Pentaho, PivotLink, Quick Insights, PowerApp, Salesforce.com, Sales Intelligence, SAS, Teradata'.
Providers of BI help enterprises to achieve planned goals by providing applications. They explain how to use it, in other words they supply products essential to run successful, efficient, profitable and productive businesses. Those providers design unique solutions for a particular organisation tailored to their requirements by supplying cost-effective software. BI vendors know their products, they have experience with different sectors and they know which software is suitable for an interested enterprise.
The history of Business Intelligence (BI) dates back to 1958, when the access to data and information was not easily or widely available through computer databases. At that time all decisions, strategies or plans were based on speculation or intuition. However that term is a recent idea created to meet businesses' needs.
Luhn (1958) an IBM employee was one of first persons to use the phrase of Business Intelligence (BI). He defined BI as 'the ability to apprehend the inter-relationships of presented facts in such a way as to guide action towards a desired goal'. The government was the first institution who utilized Business Intelligence (BI). In 1989 Howard Dresner from The Garter Group coined this phrase and made it fashionable. Since that time BI has been associated with effective decision making by utilizing stored data and information.
The new technology process that is BI, is a system of collecting data which makes all data retrieval more user-friendly, better organized and readily-accessible for all users. Business Intelligence (BI) is widespread in every industry, every sector of business including all sizes of enterprises. BI applications provide organizations the confidence of knowing current, valuable, trusted information for only one version of a real fact. Accurate data gives more than an intuition. Businesses that would like to expand and improve winning strategies in confrontation with competitors and accumulation should invest in Business intelligence (BI). Compiled and synthesized information and data will ensure future success and economic advantage.
SMEs those are Micro, Small to Medium Sized Enterprises. The term of an enterprise is explained in the Annex of the European Commission Recommendation 2003/361/EC (2003, pp.36) as 'an enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form. This includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity.' That Annex also shows the definition of SMEs. According to the criteria (staff headcount, annual turnover and balance sheet) it can be shown that 'the category of micro, small and medium-sized enterprises (SMEs) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro. Within the SME category, a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million.'
SMEs constitute over 90 per cent of all businesses in most countries around the world. In the European Union in 2005 (25 countries) in both private and non-private sectors 23 million organizations were defined as SMEs. This is almost 99 percent of all businesses. This fact has been taken from the work of The European Commission (2005, pp.5). However, the European organizations in general are smaller than their equivalents in the USA.
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SMEs play a significant role in the global economy especially thanks to the size of their employment. In other words they contribute, affect and add value to the financial and economic growth of all countries. Those enterprises are the most typical and common type of businesses. That sector employs the greater part of all hired people. However, SMEs have more difficulties in staying and surviving on the marketplace particularly when those enterprises often have many imperfections and weaknesses. Those organizations usually do not have: a dominant position, possibility because of a lack of research, strong marketing and management structure like larger businesses. They have also problems in obtaining funds, credit, money, capital especially at the start up stage when forming a business. SMEs have less ability to obtain new technologies, new ideas or innovations than their bigger competitors.
According to Department for Business Innovation and Skills (2010) investment in research and development and innovation these are recent trends in SMEs industry. Those SMEs who are more innovative they are more likely to face and manage problems or potential barriers.
Maximise shareholder value, to grow in size and power that is the main goal of SMEs. That goal can be achieved by leading new ideas, new trends, new technologies, quality and cost control and optimising performance in the SMEs' marketplace. Those enterprises should also focus on people, on their effectiveness of motivation and management. SMEs with good human resources on one hand and a good technology and information base on the other hand are deemed to succeed. They have to sell superior products or service, recognize and invest into new markets and improve or reduce the costs. These acumens ensure the effectiveness and success of the business.
A lot of owners or directors of SMEs think they have all the information and data they need to effective manage the organization and to make the right decisions. They tend to believe their firms do not need additional business tools like Business Intelligence (BI) to be successful. Unfortunately in a current competitive environment no one can remember all data or all facts about their organization. So is it right that all information is available for them and only what they have to do is- to ask? If the company puts emphasis on being successful the answer is- no. Those organizations should invest in innovation, new ideas and business tools. All businesses if they want to have a strong position on the market need to have an integrated view of their enterprises.
A lot of SMEs like larger corporations face a problem encountered with huge amounts of data. For those companies it is hard to decide what is important, what they can use to get more clients and what they should improve etc.. The solution to that problem are BI tools supplied by BI vendors.
On the other hand loads of small to medium sized enterprises (SMEs) believe they do not need those tools or that they cannot afford it. Is that right? Or maybe they need Business Intelligence (BI) to compete with their competitors in the marketplace or to achieve future growth. This research will help to answer all of those questions and doubts.
Usage of BI within SMEs
Until recently Business Intelligence (BI) was associated with high prices and with giant organizations. So far BI systems have been expensive, complex and require installation and maintenance. The tools for large enterprises require warehouses. However, this model of BI is not feasible for most SMEs. Until recently firms in the small to medium sized enterprise (SME) market could not to afford BI because of the high costs of installation and maintenance, therefore Business Intelligence (BI) suppliers decided to move into new sectors such as SMEs. They offer them web-based, hosted BI applications that serve data storage and reporting capacities without unnecessary, expensive installation and maintenance. This proposition can cost SMEs almost a half price of the traditional BI model. The vendors dropped their prices to a stage that is viable for small companies. It means that any size of business even a small one can use that kind of an analytical software. This is the next stage in a SMEs evaluation. It is a time to move from spreadsheets to analytical tools like Business Intelligence (BI) which are more powerful for them. However, it is still relatively new technology for SMEs. Utilizing this business aid can guarantee benefits for an organization. An important example of those benefits is a competitive advantage that will help to face a recession.
On the Business Intelligence (BI) market there are some BI vendors who offer licensed BI tools (run on a firm's servers). Some of them also supply Software-as-a-Service (SaaS) and 'on-demand' products (pay-per-use) where the provider hosts the BI applications on its own server. These pre-packaged tools (hardware and software) do not need high expenditure, a specialist knowledge and practical exertion. Employees can access their company's data, reports in their organisation using the web browsers or it can be emailed straight to users. That idea is very beneficial for SMEs. There are no hardware, installation or maintenance costs and it is easier for them if they want to get started working on BI tools. A lot of SMEs have begun using 'on-demand' BI. Particularly reporting tools and Microsoft queries have been very popular among SMEs. The main reasons for that are real-time data and only one version of relevant information obtained by these smaller companies.
Providers such as NetSuite Small Business, SaaS Solutions, Salesforce.com, Databeacon, In House Solutions and iQ4bis have put BI products on the market designed for SMEs. Despite the fact that BI tools are more available those companies have to meet stringent procedures such as security, functionality etc.. They are customer focused and they are always willing to meet special SMEs' needs (such as an easy to install product and a good customer support package). BI providers supply to SMEs a package of reporting and business analytics solutions. Their tools share a server with others across businesses. It is available for a single organization and many businesses, also for customers working on the same server, using together with others (multi-tenancy with a function of single sign-in). These BI suites are easily and quickly accessible for SMEs. Some BI suppliers design products especially for SMEs that are user-friendly and allow IT staff to manage them. They provide real-time reports, queries, dashboards, tables, menus and more (depending on what customers require). They are not complex and they add value to a business product or service. These solutions are not difficult to integrate with companies' hosted requirements, owing to the fact that it is a lightweight, frequently Java-based structure (it permits businesses to run quickly and easily). The technology is planned out to help thousands of named users accessing the server at the same time enabled by high-performance software.
Certain BI vendors like SAS or MicroStrategy designed the products especially for SMEs. For example MicroStrategy tool is for free for interested companies who would like to try their tool at no charge. The proposition of using Business Intelligence tools for free may help to convince previously undecided SMEs to BI software benefits.
Small to medium sized enterprises (SMEs) are characterized by narrow budgets and impoverished resources. However, keeping that in mind some tools are especially created and designed for that market. Those applications are simple and affordable for those small to medium businesses. SMEs used to utilize Excel spreadsheets or manual processes as main decision support software and an organization performance tool. However, most organizations continue to develop and the above tools may not be sufficient for them, in addition in some cases this would be dangerous for well-managed businesses.
A lot of people who manage SMEs believe they do not need BI applications. They think they have enough data and information to effectively run their businesses or those records are available if they need them. Unfortunately this belief is not true. If an owner employs a dozen or so people that person is not likely to know all important and detailed information about their business. In practice managers do not have enough time during a day, a week, or a year to check and remember all details of a firm.
Many BI users still think that it is difficult to find an affordable, cost-effective Business Intelligence (BI) which is easy to use and beneficial for them. Undoubtedly some of SMEs will use tools like Excel thinking that this is what they need. But for a growing organization that opinion could be dangerous for their business especially as some mistakes could go unnoticed or unchanged.
In some cases SMEs owners could still decide that their business requires larger and more expensive BI because the web-based applications are not enough for them. But in most instances reporting capacities and data storage software are sufficient for SMEs. Those BI tools can grow simultaneously with the business.
A lot of enterprises have started using performance dashboards as a first advance analytical application. This source of BI gives these companies a way of controlling, managing, keeping track and deriving profits
The larger corporations have different budgets to support Business Intelligence (BI). The smaller enterprises and these larger organizations require different BI applications to successfully run their business. Small and medium sized companies usually have limited IT resources. One of the software-oriented BI solutions for SME is DecisionCentricÂ® or Decision AnalyzerÂ® produced by Decision Technology Inc. These tools allow BI users to create needed reports, to analyze significant data and next to export information to Microsoft Office applications such as Word, Excel and also to Acrobat. It is optimized especially for SMEs because of EII engine. This enables enterprises to get to any existing data warehouse. Additionally, to make BI users' work easier, the software program provides the offer of a free-form reporting application and BI users do not have to design reports themselves.
Some of Business Intelligence (BI) providers offer applications, tools for small to medium sized enterprises (SMEs). Those products are designed especially for them to meet their needs and expectations. Those solutions, which large corporations enjoy, provide versatile BI (from dashboards, reports to performance management and data integration) with cheaper prices and packaged especially for SMEs. These suppliers recommend their tools via a web-based, hosted solutions and platforms. These applications allow employees to carry out real-time analytics, direct response on all requests based on current data or findings, allowing them to take instant action without incurring high costs.
Employees in SMEs can access important data from anywhere. But enterprises can share their data with BI providers only if their security and privacy is guaranteed and the access to private data is controlled.
Many organizations in the small to medium sized enterprises (SME) marketplace face a problem with too much data much like their larger competitors. The problem can be noticed for example in the ERP system. Sometimes is very hard to find what is extremely important and what is not.
Theoretically every kind of business is suitable for Business Intelligence (BI), but large corporations need different tools than their smaller competitors. SMEs can save lots of money using BI tools created especially for smaller businesses. They can save on licences, span services, BI servers, filters for viruses or BI infrastructure for documents etc..
Appropriate information is very important in that competitive world. That is why Business Information tools are used by almost all sectors. We can say that in some areas such as healthcare the fact of having current, real-time data can save somebody's life. The company Google designed the project called The Google Flu Trends (http://www.google.org/flutrends/). That search uses interactive intelligence to provide current information about the flu activity to healthcare professionals. This data can be obtained two weeks faster than from surveys. BI tools are also being used in the publishing sector. Some companies offer around a hundred thousand ebooks and without BI applications managing this staggering amount of data the situation would be chaotic. Most would find it very hard, almost impossible for a growing firm. Those enterprises need time to run their businesses, not to run calculations, to do analysis by hand and so on. Now employees can see what items are selling best and what is the most effective. It is easier for them to make decisions about their future. Basically Business Intelligence (BI) is used by all industries. Those applications if effectively incorporated into processes can help an enterprise meet its planed goals, obtain new clients, increase customer satisfaction, improve sales outcomes, and in some sectors save lives by supplying appropriate medical interventions, it can also identify the possibility of an epidemic at an early stage.
According to Schiff (2008) BI can be used in SMEs to: 'determine the inventory level of a product or part. Identify its best selling products, and see if this holds true in all of its retail outlets. Identify customers that are cutting back on their purchases so that special inducements can be offered to retain them. Implement dashboards and scorecards so that executives and supervisors can quickly recognize operational exceptions, or when expenses are likely to exceed budget. Establish and monitor performance metrics and take corrective actions if they are in danger of not being met. Compare departmental turnover to identify potential morale problems. Compare year-to-date sales for this year with last year's, and forecast what sales are likely to be for the entire year. Track customer orders and desired ship dates against finished goods inventory, and adjust the manufacturing production cycle and supply chain logistics to reduce inventory carrying costs. Integrate operational, spreadsheet, and historic data for analysis purposes, while helping to stamp out "spreadsheet chaos"-to provide consistency and "a single version of the truth" for the organization. Provide business users with the ability to perform their own ad hoc analysis, without having to tie up scarce IT resources. Be better able to understand and analyze their own operations and their interactions with their customer, in order to gain a competitive edge over their competitors. Align daily operations with strategic objectives and quickly recognize when they are not in agreement.'
There are a few BI solution models depending on organizations' needs. BI applications designed for SMEs can be obtained online or in traditional licensing way. Two most recommended technologies for SMEs are Software as a Service (SaaS) and Cloud Computing. The above are more suitable for SMEs, because of time and money saving designed software. Previously for SMEs costs of BI implementation and licence have been too high and unattainable. Now there are flexible low cost and low maintenance models especially created for smaller businesses which are available and affordable.
To conclude the main factors that make BI more affordable for SMEs are reduced costs of installation and maintenance, reduced complexity, improved scalability and understanding of BI technology and professional usage of these tools.
Business Intelligence (BI) in SMEs is not a guarantee of success, but it helps to better understand the business. Those enterprises who do not utilize BI are more likely to be unsuccessful, fail or squander business opportunity.
Software as a Service (SaaS) and Cloud Computing.
Business Intelligence (BI) provided by Software as a Service (SaaS) is a solution where users via the Internet and a standard browser can use BI applications and receive information from a secure data centre. It is necessary to install the tool on the user's own computer. These solutions are flexible, powerful, readily available and at a low-cost for businesses. In other words these tools help organizations to keep costs down (firms only pay for what they require without licensing costs) and they allow enterprises to concentrate on core functionality.
In other words SaaS is called- the Web application. People can access and run this service on a supplier's cloud through a browser. However among other things these applications are characterize by minimal user's management effort- this person does not have to organize, monitor and control the resources connected to these applications such as servers, network, storage etc. Examples for that can be popular Facebook or provided by Google- Gmail.
Companies have to decide which products they wish to include (report server, analytics etc.) and determine which support model they want. This is known as an open source portal (uncomplicated to set up and easy-access) which employees can download and combine with BI software. SaaS is more beneficial and affordable for SMEs. These tools have no costs of buying hardware. There is no requirement to hire an IT professional. These factors are favourable for SMEs because they do not have the funds or the resources or the infrastructure to use whole BI services.
According to Gomez (2009) 'there are three main categories of cloud services: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). Infrastructure as a Service (IaaS) this is a virtualized blank page upon which you may build the underlying platform and every element or application required in your infrastructure. Platform as a Service (PaaS) here the underlying infrastructure is abstracted out, and you're given an on-demand development environment upon which to build your applications. Software as a Service (SaaS) this cloud option provides turnkey applications on-demand, usually accessible via a Web browser.'
Cloud computing is a relatively new solution, quite fast it was called 'the next big thing' in the computing industry and it is not installed within an organization's offices. It supplies IT capabilities as a service using the Internet to their clients in the desired format. The idea for the name is derived from a sign from the Internet used in the computing industry. Cloud computing provides a way of supplying Information Technology for small to medium sized enterprises (SMEs). Instead of buying and installing software and hardware it allows users to run it over the Internet ('The Cloud'). Its key attribute is Software as a Service (SaaS). It also allows delivery to external users and because cloud computing is using Internet technologies; users can develop and improve their delivery of service. These attributes of Cloud computing thanks to low costs enable businesses (such as SMEs) easier entry, fast development and growth. This service helps to save money and time, allows freedom of access, protection from unexpected events and built-in elasticity. These benefits are important for SMEs in a changing business environment. Companies like HP, IBM, Amazon Web Services or Google Apps and many others are already in Cloud.
SaaS and Cloud Computing have many strengths and benefits. First of all they are created not only for SMEs; they can also be used by any organization. This service (BI provided by SaaS) has started being well-liked by enterprises. The opinion that SaaS is mainly adapted and appropriate by Small to Medium Enterprises (SMEs) is far from the truth. This is because among large companies Software as a Service (SaaS) has been accepted and used.
These two solutions are easy to use and much faster to implement. It takes approximately four weeks, when the standard BI implementation for a large corporation takes from six to twelve months. Business Intelligence (BI) clients do not have to buy expensive hardware or licences; do not have to commit money to purchasing and maintaining their own server- it helps to save unnecessary and additional costs. Solutions such as SaaS and Cloud Computing are easy to use and do not demand IT knowledge from their users. These tools are highly regarded by users and they are now considered as the future of the IT industry. Software as a Service and Cloud Computing tools are the software application which can be obtained by monthly payments or even by a single free. This solution is particularly fitted, adapted to SMEs, because this services is not complex.
An independent market research organization called OpinionMatters in December 2009 conducted a primary research for Easynet Connect about the interest in Cloud Computing and their usage by SMEs. Easynet Connect (2010) in their recent research paper found that 73 per cent of those polled within 5 years are planning to use Cloud Computing in their businesses. That number had increased from 47 per cent in 2008 to 73 per cent in 2009. Also these enterprises gained more benefits from using Cloud Computing such as help in saving money and in business growth (from 35 per cent to 51 per cent). 43 per cent of respondents thought that the new system allowed employees to work from home. The research showed that in SMEs there is a higher demand for Cloud Computing and there is also a tendency for increased interest in the future. Some sectors such as marketing, sale and media have demonstrated a bigger requirement for the use of Cloud Computing than other sectors. 30 per cent of interested sectors already have the Cloud system and almost 40 per cent who do not yet have it are planning to use it. In the UK, London is the region where almost 70 per cent of SMEs are planning to or are already using Cloud Computing whereas only 17 per cent have never considered it. The research showed that the usage of the Cloud system by large corporations such as Motorola or Jaguar do not have an influence on SMEs (only about 20 per cent of larger businesses have an impact). The study demonstrates that there are few negative views about Cloud Computing (only 13 per cent of those polled complained about the systems security and 9 per cent on reliability). Stening (2010) managing director of Easynet Connect states that 'by the end of 2010, half of SMEs in the UK will be using cloud computing in some form or another. This is a complete reversal from just over a year ago when nearly the same proportion (53%) said they would never adopt the cloud. Either businesses have changed their minds very quickly or the benefits of cloud computing are more clear than they were. (â€¦)The next challenge is for SMEs to ensure they have a formal strategy in place for adopting the cloud.' He also mentioned benefits of the Cloud system, he said that 'with a cloud-based solution there is less strain on internal systems and installing updates and tailoring the platform happens much more quickly and easily than systems managed in-house. It has dramatically helped us improve the way we work, giving us a single view of our customers and improving our customer response times and first time fix rates. For us, moving into the cloud was a big move which is certainly paying off'. Easynet Connect's (2010) research provides some advice for SMEs. They should enter into discussions with Cloud providers: in relation to their current situation, which may impact in their ability to use the service. Their discussion should include the availability of the service and components of Cloud that they require especially if they wish to change their business model into that Cloud service. They should also consider the proportion of their organization that will be affected and the number of staff who will access the service before any negotiation takes place with a software vendor.
Williams (2009) states that 'since the emergence of application service providers (ASP) ten years ago, managed services, network-based services, software as a service and infrastructure as a service have all added to customers' confusion - for simplicity, we can refer to all of these terms as 'cloud computing services'. What these services have in common is that they have become the responsibility of the provider, rather than the customer. For example, the software no longer resides on the customer's PC or server and instead resides in the provider's network, and in services involving 'infrastructure as a service' the server may reside in the provider's data centre.' Williams presents information that the phrase 'Cloud Computing' has become very popular during the last 12 months and an interest in it is high. This is because this service helps to decrease risk of investment, prevent software licences and helps businesses to be successful during a recession. He says 'in the past 12 to 18 months a large number of operators and their ICT arms, such as AT&T, Fujitsu, Orange Business Services, T-Systems and Verizon Business, have launched a whole range of cloud computing services. Entering a market already served by companies like Amazon, Gogrid, Google, Flexiscale, salesforce.com and many others is not going to be easy. It is a new domain for operators and requires a different sales skill set compared to voice and data, which is also the case for above and below the line marketing, which has already been mastered by the likes of salesforce.com.'
If a company is not sure they need BI tools, firstly that firm should look at the time, money and costs spent on retrieving important data. Business Intelligence (BI) in a fast way supplies integrated methods of data retrieval and allows an enterprise to run successfully and grow their business without unnecessary costs and frustration. Organisations without BI tools are more likely to be beaten by rivals during a recession and fail.
BI barriers and potential problems
Almost all businesses during a recession experience stages of struggle for survival, to periods of calm which allow them to prepare for future opportunities and challenges. For some organizations it is too hard to handle such adversities and many of them collapse during such a crisis. However, even successful businesses have to face unplanned barriers and problems.
Adoption of Business Intelligence (BI) by SMEs usually meets a few barriers such software or maintenance costs and complexity. Canes (2009) states that 'the SME faces additional hurdles, such as tighter budgets, less sophistication and organizational knowledge, technology hurdles and fewer people, meaning less time to spend on planning and analysis.'
Some enterprises wrestle with problems such as cash flow, receiving a loan or investment credit, lack of new clients, lack of new contracts etc., but other businesses are much more successful. Those organizations know how to lessen the negative effects of the crisis and how to identify and use the opportunities and threats in a positive way. In other words they found ways of resolving problems caused by the recession and look after their cash flow and their future growth. Different enterprises have different ideas of how to do that, but all of them rely on the new technology and IT. These solutions help to beat the downturn and competitors. One of the ways how to get though the crisis, how to survive and in addition make bigger profit and achieve a stronger position on the market is Business Intelligence (BI).
Companies in the small to medium sized enterprises (SMEs) market still have a demand for analytical software.This tool should be: simple to use, implement, administer and user friendly. The technology cannot be too difficult and must not be too expenisve. If these requirements are not met then this can discourage enterprises from BI.
These BI solutions can help SMEs enlarge their modest resources and it can help to create and design new ways for success, profitability, effectiveness and what is very important during a recession, the knowledge of how to survive.
Potential problems can be found if an SME does not have clear requirements. It means that this organization has problems in defining their business. If you know your business and what you need it is easier to find the appropriate tools. The company should have clear specified future goals. If they know where they want to be in the future, by using the appropriate BI tools, it is likely they will be able to achieve this and the system can adapt with them.
The most important factor for SMEs is their budget. Lack of budget causes problems and the inability for growth. It is very important for those businesses to buy the best package that they can afford. Unfortunately many SMEs do not have a budget to advertise themselves or to invest in costly new technologies. A good solution to this for SMEs is BI. These tools may be a little expensive, but it would be far more costly to have incomplete data and therefore make wrong and risky decisions. For some SMEs the cost of implementation of BI may be too high. The solution for those enterprises is online BI software, which is affordable and can cut their costs. Business Intelligence (BI) helps organizations analyze information and data that they receive allowing them to make new decisions about prices, investments, sales opportunities etc..
Some SMEs may find the technology of BI software too difficult for them. Users who find difficulty with this software usually give up very fast in frustration with failures. The solution to this is user friendly graphics. These tools are of a simple design to help the BI user.
Companies using this software can look at their competition, stakeholders, customer satisfaction and other external impacts. They also can check internal factors such as income, sales, composition, organization's demand, and plans for the future by analyzing the correct information.
Another problem can appear if BI tools are not aligned with the vision and strategic plans of the company. If an organization is going to develop itself they should choose the BI tool which will help them to achieve that in the future and will grow with them.
The BI vendors by cutting prices, making tools less complexity (user friendly) - they are getting close to SMEs and they are reducing barriers between them.
To conclude costs of implementation and maintenance, costs of use of Business Intelligence tools, complexity these are major difficulties in its adoption by smaller companies. BI suppliers have notice the wish and the need to utilize these applications by SMEs. The BI vendors have developed and produced the products especially for SMEs to meet their needs and allow them to be a part of such customers.
Future of usage of BI in SMEs
look for new ways and means to improve their bottom lines and stay ahead of competition in a slow economy.
People from the computing industry predict that over the next few years the number of SMEs using BI tools will increase. Those suggestions are based on good results achieved by SMEs. Companies who use BI think that BI is positive and beneficial for their organizations. They have noticed that they do not have to take the risk of making ineffective and bad decisions which relied on inappropriate information or data.
The Gartner Group it is a leading information technology research organisation. According to this company two out of the ten top predicted trends for the computing future are Business Intelligence (BI) and Cloud Computing. The company Gartner (2008) says that BI has a capacity for improvement, performance and development of businesses by making right decisions. Because of a predicted economic crisis through 2012 many global companies will make wrong decisions about important changes. The main reasons for that are lack of information and the lack of analytical tools which could have a significant effect on those companies. People who are responsible for those decisions will try to find some help from analytic devices to improve their business. Garter says 'by 2010, 20 percent of organisations will have an industry-specific analytic application delivered via Software-as-a-Service (SaaS) as a standard component of their Business Intelligence (BI) portfolio'(Gartner, 2008). Cloud Computing provides many benefits for SMEs. One of them is 'built-in elasticity and scalability, which not only reduce barriers to entry, but also enable these companies to grow quickly' (Gartner, 2008). However, the world's leading IT research and advisory organization also state 'caution is advised since significant privacy and security issues exist. Cloud computing is not appropriate for the full spectrum of enterprise applications.' This company has notice that security and scalability would be the most challenges factors of on-demand BI service. BI vendors have to work on security and scalability to meet customers' needs and expectations.
Probably over the next few years we will be eyewitnesses to an increasing amount of small to medium enterprises (SMEs) implementing BI technology. It will be web-based with no costs for licences, implementation or maintenance. Those companies who decide to use this analytical software will derive measurable advantages and visible profits.
In a next few years open source tools and particularly SaaS will arouse organizations' interest and, following on from this sale of "entry-level" BI tools should increase. For BI vendors social networking will be a significant aspect of their future goals. Additionally in the future most of software designed for enterprises will be delivered through the SaaS-based applications. All of the enterprises would have worked on a minimum one SaaS architecture.
A lot of BI vendors are cognisant of SMEs barriers and fears. With this in mind they will make an effort to meet SMEs' needs by offering them 'try before you buy' BI products.
Throughtout the world around 90% of all businesses are small to medium sized enterprises (SMEs). Some of them are at the beginning of their development. As they expand nationally and internationally some of them may become huge corporations. Probably most of these businesses will stay as an SME. Whatever aspirations, plans and goals SMEs may have, Business Intelligence (BI) can help them to stay in good shape during a recession, compete successfully against their competitors in the market place and make sure that critical data is not missed or is not indiscernible.
The key for SMEs is to choose integrated, web-based BI applications than more expensive systems designed for large corporations which are too complex and which require installation and maintenance. This web-based tool supplies data storage and reporting capabilities. This system also allows end users to have access to important information from all departments and gives them the capability to check for potential opportunities or problems. These BI applications will open new doors to SMEs' sucessful future, developing innovation, growing by allowing them to make right decisions.
Businness Intelligence (BI) solutions are now accessible and also affordable for small businesses. These are hosted and web-based. SMEs can take advantage of BI tools without investing in systems which are too complex or too expensive.