“A March 2010 Forrester report found that BI implementations by small and midsize businesses are on the upswing, even though SMB BI use lags behind BI use at larger organizations. Of 921 North American and European IT software decision-makers that Forrester surveyed, 21% of those at organizations with up to 999 employees said they have deployed BI technology already and 22% said they are expanding and upgrading their implementations.” – Computerworld.com
It’s great to hear, especially for us, that small businesses are taking BI more seriously. They need to. For the most part, small businesses today are managing and analyzing their data poorly, and 21% is a low number of BI adopters. This is a shame since a recent study showed an average 186% ROI after implementing a BI solution. This proves that there are clear, huge wins to be had if only small businesses could get a handle on their data.
So what are the reasons small businesses are mired in bad data management?
They Don’t Make Data Management a Priority
What are the big ticket items on your company to-do list? Increase your customer base? Raise revenue by 20%? Hire two new programmers a month? Get a foosball table? All huge, pressing goals. Now where does data management fall on that list of priorities? Exactly. Small businesses have a lot on their plates and correcting data errors or making sure everything gets logged correctly often get lost in the shuffle, let alone really taking the time to delve into their data. Unless you treat data as a key performance indicator, it’ll never be a priority and bad data will stay bad data.
They Don’t Have the Manpower
Who’s going to do it? Data management calls for someone to oversee data quality, spot errors, keep on employees to log their activity and maintain the infrastructure of where/how the data is stored (which isn’t easy). Then there’s the person to analyze the data. You’ll need a quant/statistician/math wizard to translate your gigabytes of information into actionable items, extrapolate trends, model forecasts. Does every small business have someone who can do this? Probably not, and in fact, those who understand BI are seemingly getting harder to find.
They Don’t Like the Cost/Benefit Ratio
Analyzing data takes time. Especially if your company is managing data via Excel, it can be a full time job just to churn out readable reports to management. Doing data well can often require a large time investment, and for many small businesses that’s not really an option in today’s “speed wins” atmosphere. Unless it moves the needle big it’s not worth doing, and often times the jury is out when it comes to BI. As this article from AccountancyAge points out, finding great software tools is only part of the BI hurdle. It’s also the time and effort required to take the data analysis and affect change in the company.
They Don’t Have the Speed
Often times bad data is simply stale data. It doesn’t really help your company to have a sales forecast for November when it’s nearly December. Big companies “regularly fail to make critical decisions because they don’t have access to timely information and the analysis to do so.” Having up-to-the-minute data is incredibly important, especially for small businesses who should be the most agile companies out there. If the intelligence is lagging, then returns are diminished. What’s the speed of your data?
They Don’t Think it’s Fun
Regression analysis! Does that phrase get you hot? How about: multi-variable survival analysis! Nothing? Ok, so not everyone thinks digging into their data is a party. Some find it downright boring, and over the long run, you’ll spend less time on something you find boring than something that excites you. It’s not immediately sexy (though good BI can lead to profits, which are downright sexy), and small businesses usually find something more fun to do than trending.
What’s your stumbling block to doing data well? Ready to overcome it? We’ll help.