Business Intelligence on the rise among small businesses

More SMBs (small and medium businesses, or companies with up to 999 employees) in the United States are seriously considering using BI (business intelligence) software tools to help them better understand market drivers for sales and forecasting, and for increasing their profit margins. There are about 6.3 million SMBs in the U.S., with about 98 percent of them being SBs (small businesses, or companies with up to 99 staff).

These findings emerge from a recent survey on US SB & MB IT assessment trends by New York-based Access Markets International (AMI) Partners, Inc. Companies go through a large volume of consumer data and BI helps make sense to data-mine that information to drive sales and better position marketing and messaging.

About 9 percent of PC-enabled SBs in the U.S. are currently using BI in the form of packaged software compared to 37 percent of MBs. Five percent of PC SBs are using BI as part of an online software as a service tool for 2008. However, PC MBs, not as much: a mere 1 percent.

"PC-enabled SBs in the U.S. are interested in running BI on their consumer data to drive and monitor performance against the competition," says Nichelle McKenzie, New York-based Research Analyst at AMI-Partners. "The payoff is rapid innovation, new marketing ads, and new channels to boost their profit margins. Almost 80 percent of SBs try to understand TCO (total cost of ownership) before purchasing BI products/services. That's because they want these purchases to be a part of their overall IT strategy."

About 16 percent of SBs – and 22 percent of MBs – in the U.S. said they use BI or data mining and forecasting financial planning as part of an ERP/SCM module. Wholesale and retail are the dominant sectors. "This makes sense, considering the volume of e-commerce and e-mail data that is collected daily," says McKenzie. "However, for MBs we see a different pattern, where 30 percent are using BI as part of ERP/SCM and professional business service is the dominant sector."

More than 25 percent of SBs that use BI separate from a larger module feel that it is important to study and use e-commerce data to drive sales and revenue. "SBs are using CRM data to deploy BI software," says McKenzie. "However, we still see the need for awareness of BI and the positive impact that it can have on SBs. Most SBs in the US use BI as part of the ERP/CRM module."

One factor driving SBs to adopt BI is the feeling that the existing software is no longer adequate. The chart below highlights the current brand usage for BI software applications among SMBs in the U.S. BI usage among brands is low but BI is a growing area for vendor investment in 2009. There is no dominant market leader in the BI space, so the opportunity to make a mark is huge.

 

BI and data mining software tools help companies gather and interpret data to make better business decisions and to optimize business processes. It involves the use of statistical forecasting, predictive modeling and problem solving methods to provide strategic information for business positioning.

About the Study

AMI's 2007 U.S. Small Business Overview and Comprehensive Market Opportunity Assessment and 2007 U.S. Medium Business Overview and Comprehensive Market Opportunity Assessment studies highlight these and other major trends in the context of current/planned IT, Internet, and communications usage and spending. Products and services covered include established and emerging hardware, software, applications, and business process solutions. Based on AMI's annual surveys of SMBs across U.S., the studies track a broad spectrum of issues pertaining to budgets, purchase behaviors, decision influencers, channel preferences, outsourcing, service and support. Also covered are detailed firmographics and critically important technology attitudes and strategic planning priorities. This data points to key opportunities and messaging hot buttons for vendors and service providers seeking to match their offerings to SMB market requirements.

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Is it time to consider a value added tax?Forbes contributor Joseph Thorndike wrote yesterday that he believes the tax reform proposal by House Ways and Means Committee Chairman Dave Camp (R-MI) was dead on arrival. But he...
Read more from Larry Perry here and in the Today's World of Audits archive.The planning phase of an audit engagement of an entity using US GAAP or a special purpose framework will, with minor differences, include similar...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.