In-Depth

BI for the Small and Mid-size Business

BI tools for small and mid-size businesses can do what the top-tier solutions can, but buyers must first figure out what they really need.

We've all heard plenty of interest lately in business intelligence for small and mid-sized business (SMB), but how is this market different from BI for large enterprises? It's not in the BI capabilities. The tricky part is educating buyers.

Affordable tools for the SMB market range from very simple report-writing applications to sophisticated installations that match just about anything top-tier vendors offer.

Vineyardsoft vice president of marketing Don Farber sees a market "compression" as low-end tools get better and high-end tools get cheaper. Vendors that were once happy with five big sales each year, says Farber, have adjusted pricing and now shoot for 12 to 15 mid-size deals.

"I'm comfortable with them coming down," says Farber. "I welcome these top-tier vendors getting down into the SMB market because [their marketing] will educate and raise awareness." Lack of knowledge among buyers, he and others have told me, is the number one hurdle facing vendors selling to small- and medium-sized businesses.

Most buyers don't have much of an IT staff (if any) to help them shop. They tend to do their own research, when they have time.

For them, BI is still a new concept. "Even to the organizations that talk about BI, you ask them what they mean and, well, they're not sure." There are actually many kinds of BI, he acknowledges. There is no one definition because there are so many different kinds of questions it can answer.

Smart buyers start by deciding what questions need answering. "It requires hours or days of analysis to see where that need is," Farber says. "Then you look at the technology that fits that need." Unfortunately, most look first at tools. "It's comfortable, quick, and easy for companies to define a business concept as technology because they don't have to look inwardly. That's wrong."

"You can do amazing stuff," Farber told me, "but the vast majority need BI to do very, very simple things." For example, one client needed to make sure his company sold items for more than it paid for them. In their inventory system, someone could adjust the cost of buying an item -- but there was no automatic check against the item's selling price. "Is that BI? Yes, but it's almost insultingly simple."

Sellers who approach small and mid-size businesses with overly sophisticated tools do a disservice by giving the impression that BI is beyond them. "Something as simple as Crystal Reports might be just what a company needs," Farber notes. "Now, some may say, 'But that's not a BI solution.' I say it's not about the technology, it's about the business need. If that's what a particular business needs, then that's their BI solution."

DataSelf CEO Joni Girardi agrees, adding that growing companies do best to buy in stages, adding module after module as needs evolve. Most don't shop this way, however. Among mid-size businesses, Farber points out, "lack of knowledge is an unfortunate reality."

Salespeople have to be on their toes when selling and educating at the same time. ClickBase regional sales manger Kevin Dunn first tries to discover the buyer's most urgent pain, but he's careful not to dwell on it. For example, he might discover they need reporting. "If you focus on that too long, they think that if that's the major problem, why should they spend so much. 'I can just get a report writer.'" Dunn is careful not to offer too much. If he lists too many problems the solution could solve, buyers wonder if the vendor really can handle all of them. "It's a tricky process."

BI buyers "don't know what they don't know," Dunn says. Though solutions for many problems "are not rocket science," many opt for the security of big-name vendors. Companies often establish one major suite from a single, big vendor when simpler solutions might suit them better.

Selling BI often involves doing what the buyer should have done: identifying problems. Usually he can find one that he can solve to provide quick ROI, and he tries to start with that as a proof of concept. Sales reps may have a hard time keeping up on data from the head office, for example, so Dunn might propose a Web portal.

The good news is that buyers' knowledge show signs of improvement. Girardi says, "Today, the quality of leads versus five years ago is much better. Many more people start a conversation knowing what they're talking about."

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