A new report from Dresner Advisory Services finds that small and mid-sized enterprises (SMEs) have some unique characteristics when it comes to how they leverage business intelligence (BI). One key finding: When compared to large enterprises, SME BI initiatives are more likely to be driven by executive management and the sales function.
"SMEs have the advantage of agility and the ability to use BI as a competitive differentiator," says Howard Dresner, chief research officer at Dresner Advisory Services. "Because of the closeness of executives to the technology, business and customers, they have an edge against larger competitors. However, larger organizations have many more resources -- people and money -- enabling them to invest in more long-term endeavors."
While larger enterprises may have an advantage when it comes to business intelligence resources, SMEs tend to face fewer operational challenges than their large competitors.
"Larger organizations get bloated with bureaucracy and process, forcing them to focus BI upon efficiency," says Dresner. "In contrast, smaller enterprises are, by definition, more efficient and can focus externally -- enabling them to take market share from larger players."
Big BI Expectations
When looking out over a 12-month time frame, the report, a breakout from Dresner's flagship 2013 Wisdom of Crowds Business Intelligence Market Study, also found that SMEs' expectations for business intelligence outstrip those of larger enterprises.
"Specific to BI, this seems to be SMEs' 'moment'," says Dresner. "Through a confluence of need, awareness and product focused on SME needs, they appear to be rising to the occasion and taking advantage of the opportunity that BI presents."
This would not have been as feasible five to 10 years ago. Now, SMEs not only see the advantage of business intelligence, they also report greater satisfaction than their larger counterparts.
"I believe that smaller organizations have a better understanding of the business, of customers, and of what BI can do for them," says Dresner. "As a result they're able to execute quickly to achieve meaningful results."
SMEs did not report the same length of experience as larger enterprises: About one-third of small and more than 20 percent of mid-sized enterprises reported having a year's experience or less with business intelligence.
This is perhaps not surprising, given that BI vendors initially focused on larger enterprise customers in client-server environments. The nimbleness and flexibility of business intelligence delivered as software-as-a-service (SaaS) for SMEs makes more and smaller deals a reasonable value proposition, as opposed to fewer slam dunks.
"Of course, larger enterprises continue to generate the big deals, but they are far fewer in number than SME deals," says Dresner. "SME is a growth segment for vendors which most -- if not all -- recognize and are investing in. Getting to these SME opportunities requires a different sales model as they tend to be lower value deals. So, a strong channel program is often needed."
The report found growing interest not only in SaaS, but also in mobile device support and dashboards. These are trends that Dresner expects will continue.
"SMEs tend to be more nomadic than their larger counterparts, so mobile is very natural for them," he says. "Cloud is also a natural fit, which goes hand in glove with mobile -- enabling readily-implemented and consumed solutions at a price point that enterprise software can't approach. And everyone loves dashboards."
Looking at BI Vendors
Dresner Advisory Services divides the business intelligence market into three categories: the "titans" (IBM/Cognos, Infor, Microsoft, Oracle and SAP/BusinessObjects); well established "pure plays" (Actuate, Information Builders and QlikTech); and "specialized" players, which tend to be small and have a vertical industry focus (Dimensional Insight, Dundas, Panopticon, and Phocus). Then there are "high growth" business intelligence vendors (Logi Analytics, Pentaho, Tableau and Tibco Spotfire) and the "emerging" crowd (Birst, iDashboards Jaspersoft, Jedox, and Yellowfin).
There is room for all of these players, Dresner says. The report indicates that larger organizations are continuing to invest in BI, at both an enterprise and departmental level. However, these big customers are somewhat hampered by legacy solutions, which may lead them away from open source.
"Open source is a very different approach to software development, which is not well understood - least of all by business users" says Dresner. "I think it will still have a strong following within the ranks of developers, but not with business management or end users."
As for industry focus, the report shows the technology vertical being the largest business intelligence adopter, at 23 percent, though Dresner doesn't believe that BI should necessarily have greater application in any one vertical.
"BI tends to be horizontal," he says. "It can and should be applied to all verticals and all functions."
A graduate of McGill University, Timothy Wilson joined IDC Canada in Toronto as a research analyst in 1997. In 2000, he began T Wilson Associates and continued to consult for research companies, as well as working directly with large vendors such as Microsoft and SAP. Throughout his career Timothy has contributed to the IT, trade and mainstream press. He has lived and worked in Latin America and is proficient in Spanish.