Does your small business need to use business intelligence software? Yes.
Times like this, I wish English had a version of “Jein,” a useful German word that means “yes and no.” Can your small business benefit from Business Intelligence software? Jein.
Allow me to clarify, since right now I sound like a one-man version of the duck-season-rabbit-season argument.
You don’t need the jargon-laden, enterprise-level business intelligence (BI) it takes a statistician to understand. You do need the nitty-gritty business intelligence you’ve probably been doing for years.
If you came to this page to learn about business intelligence (or closely related things like business analytics, big data, and data analytics), good news: you know more than you think you do.
For example, have you ever checked your sales figures to figure out why they’re higher in June than July? Do you keep a list of what specific clients like, and need, even just in your head? Have you ever recommended a technician take a shorter route to reduce fuel spend?
If you’ve ever saved money from this kind of analysis, you’ve used business intelligence.
Business intelligence, to paraphrase Wikipedia’s definition, is just “a technology-driven process for analyzing data” to help you make more actionable, “more informed business decisions.” So don’t be put off by BI because it seems complicated or enterprise-level. You’ve probably already used it.
However, BI can seem so complex that you may experience FOBO, or fear of being overwhelmed. You’ve probably heard of FOBO’s cousin, FOMO, fear of missing out. Admittedly, BI is a big subject, and if you jump in the wabbit rabbit hole, you might get lost at Albuquerque.
Consider this article a road map of terms you need to know, and benefits you can get from BI software. Consider it also a reminder that you probably know more of the sites on that map than you think.
Read on to figure out how to make that left turn at Albuquerque, and not miss out on how BI can help you get better at what you already do.
Two Approaches To Business Intelligence
The difference between enterprise-level BI and the BI a small business needs is like the difference between training for a medal and training for health. You don’t need a personal trainer — or high-tech software that analyzes every stride — to get in shape for that 10K. But an app like MapMyWalk that charts your pace per mile can help. Small business BI is like that. You may not be Usain Bolt, but analytics can still help you. And, lucky for you, a lot of what it can help you do is optimize the best practices you’ve already got.
Christian Ofori-Boateng, CEO of ChristianSteven software, describes the public perceptions surrounding the two approaches to business intelligence. “There’s what people are talking about, and what’s actually happening. IoT, big data, and that sort of stuff is talked about, but it doesn’t affect a lot of businesses.” Many of those businesses are SMBs.
The sort of helpful information small businesses will get from BI software is information they’ve been using for years. “We called them reports in the old days,” he says about the information delivered by BI solutions. Business intelligence is “just the regular info you have, like contacts, birthdays, etc.” BI software “puts that statistical stuff together in a visual way you can understand. If you’ve got that, you’ve got business intelligence.”
Self-Service Business Intelligence
Self-service is a leading trend in BI, both on the enterprise and small-business level.
It’s also a great example of you knowing more than you think you do.
For example, if you have ever charted sales figures in Excel, or jotted down how much landscaping work was done by neighborhood, you were doing self-service BI. A business intelligence app just makes serving yourself easier. Rather than adding up sales figures month by month, column by column, BI software can do that for you automatically, then encapsulate that information into an image.
Self-service BI apps are those that allow you to organize your business data into those images– usually charts and graphs (called “visualizations” in BI-lingo)– in real time. If calling that sort of an app “self-service” seems redundant, keep in mind that BI used to be done by specialists.
IT departments and BI firms used to do the basic work of writing reports, and organizing the data into visualizations like pie charts or line graphs. The end product took days, weeks or months to produce. Self-service apps shorten that time to seconds with automated processes.
The Value-Add Of Self-Service Apps
What benefits can self-service offer you?
For one, you don’t need an IT department or a third-party BI firm. Given how many SMBs lack a large IT budget, a free or reasonably priced self-service BI app can be a hand-in-glove SMB opportunity. For instance, InetSoft offers a free version of its Style Scope software that provides a range of visualizations, from traditional bar graphs to thought-provoking new representations.
Another benefit of business intelligence is actionable info.
Cindy Bates of Microsoft describes how BI software can tell you “how much money you’ve made on a certain product or a certain service,” or “how much you sell during peak times.” Data like this is the first step in understanding, say, why replacement sales flopped in Q2, but soared in Q3. Figure that out and Q4’s outlook gets a lot brighter.
Modern vs. Traditional Business Intelligence
If self-service vs. outsourced is one important BI pair, modern vs. traditional BI platforms is another. And, again, if you’ve been analyzing your own data, you’ve technically been doing what a modern BI platform does.
Modern BI platforms (that is, software and apps) are defined by the fact that they’re self-service. The approach to data is decentralized: whomever wants data access has it at any time.
Traditional BI, by contrast, depends on IT teams or business intelligence firms to collect, build, and distribute data. Traditional platforms also depend on those same experts to create the visualizations, where modern BI can allow various users to make their own. For small businesses, this makes modern BI platforms a better choice.
The ascendancy of modern business intelligence is further fortunate for smaller firms, as modern BI is the wave of the future. Analytics firm Paxata’s CEO Prakash Nanduri predicts that the “head winds of self-service” dominating the business information industry will make “business-analyst-centric” software dominant, regardless of the buyer’s size.
Modern business intelligence platforms don’t completely dominate the market yet, but Gartner’s proprietary research notes that some are on the rise. It’s thus a good idea to think in terms of BI tools’ command of the market when buying software. That new market may look familiar.
As BI programs and apps continue to spread with the speed of a cold through a kindergarten classroom, the market they create will “bring the benefits of the app economy to software development,” and widen “access to thousands (if not millions) of available algorithms.” If you’ve been on the app store, and know how to parse a few choices to pick a program that works for you, you may already be familiar with what BI shopping will look like in the near future.
Dashboards are the next city on the map of basic BI facts and approaches. You may currently be keeping your information in Excel, or on a whiteboard at the office, or on notes in various places.
Those kinds of systems don’t work. I’m willing to bet I’m not the only person who considers pen-and-paper tracking tools disorganized.
In BI terms, your whiteboard and Excel sheets would be called your dashboard. A dashboard is any visual board or page, or collection of them, that organizes your various visualizations and graphs. Only, instead of having to truck the white board around with you, you’ve got that info available on your laptop and phone.
For Mark Flaherty of InetSoft, a dashboard’s value is in its superiority to Excel.
While many businesses use Excel to track revenue or sales figures, “the problem with Excel is that it’s not automatically updateable, it doesn’t give you interactive analysis, and you have to manually enter information.” Contrarily, with BI software you can “just import a spreadsheet or point the app to a database location and create an interactive chart that lets you look at trends.” Mining the trends and insights out of a spreadsheet — an unenviable, sometimes lengthy task — is reduced to a few clicks.
“BI lets people find insights they couldn’t regularly find, like if there’s an outlier in the customer profile, someone who’s generating much more or less revenue to them than average, that can stick out visually,” Flaherty observes. By comparison, “trying to find those insights that by staring at numbers in a spreadsheet” is a lengthier, more involved process.
Citizen Data Scientists
The outcome of the shift towards self-service is the emergence of a new character called the “citizen data scientist.” Though the citizen data scientist is a little outside the bounds of BI, his area — the related field of data analytics — can also help SMB owners.
In the ongoing story of self-service BI, the citizen data scientist is the new hero. He, or she, is anyone who uses smart data discovery software, which is the next generation of BI, to take on tasks traditionally reserved for data scientists. Gartner’s subscription-only research defines the citizen data scientist as one “whose primary job function is outside of the field of statistics and analytics,” but who still uses “predictive or prescriptive analytics” to solve their problems.
When enough people become citizen data scientists, it’ll make the traditionally inaccessible work of data science even more commonplace. Business intelligence was one step towards this, and the growing number of citizen data scientists is the next. It would create a situation sort of like that Ford “we are all champions” commercial, but substitute “we are all data consumers” for “we are all sprinters,” or “we all do customer segmentation” for “we are all weightlifters.”
Beyond that, citizen data scientists are also able to go beyond traditional analysis, performing “simple and moderately sophisticated analytic applications that would previously have required more expertise.” It’s also important to note that, while the citizen data scientist does things traditionally reserved for data scientists, they still collaborate with data scientists on advanced tasks that traditionally require a specialist.
Customer segmentation is an example of one of those previously inaccessible tasks. Platfora VP Peter Schlamp notes that such a task exceeds the skill of “your average Excel user.” A citizen data scientist armed with analytics tools, however, could figure out something like which demographic is most interested in a certain service.
Next Steps (For All Of Us)
I’ve written this post not just to demystify BI, but also to suggest that SMBs could be a major part of the BI marketplace. Even if a lot of online business intelligence chatter centers around enterprise-level concerns, there’s a world of discussions SMBs could be having about BI, too. It just requires finding ways to include the worries and concerns of SMBs.
SMB’s are poised to enter business intelligence with a lot of the basic building blocks in place. Better yet, the next building blocks are often problems for which they need solutions. This bodes well for BI software companies and their potential customers: customers are primed for the product– if companies know how to speak the customer’s language. The trick will be suggesting concrete
If you’re a small business who’s already used BI to increase revenue, I’d love if you’d share your experience in the comments below. I’d love even more if you’d enter reviews of the company you used on that company’s page in Capterra. If our blog posts help you here, think how much more the user reviews will give prospective buyers an idea of how they can benefit.