Pop Quiz: How can a business turn a mish-mash of data into a neat set of statistics it can use to make intelligent decisions about day-to-day operations? Hint: The answer is a technology I mentioned in one of last week's blogs.Answer: Analytics. And I'd like to refer again, if I may, to an Albert Einstein quote that the SMB Group cited in its recent report [PDF] on the four top technologies (one of which is the "star" of this blog): "Information is not knowledge." Knowing that to be true, SMBs everywhere are harnessing the power of analytics to run their businesses more efficiently and profitably.

The Sky IT Group, a solution provider based in New York, can attest to the growing popularity of this technology. Jay Hakami, president, says that about 40% of his customers--many of them midsize players in the retail sector--have deployed an analytics solution or are considering doing so in the near future. "These companies need to process huge amounts of data," Hakami says. "They need to slice it and dice it, then make important business decisions around it."

Take Bernard Chaus, one of Sky IT's clients. The apparel manufacturer's sales department and CFO weren't in synch; while the former reported that sales were skyrocketing, the latter wasn't seeing that upward trend. Also, the wholesaler was losing money to mark-downs. Sky IT, a longtime partner, suggested that an analytics solution might be the answer.

It took about a month for Sky IT to put its cloud-based analytics deployment, called SkyPAD, in motion. "We had to extract data from Bernard Chaus--all the information they get from their retailers each week about what items were ordered, shipped, sold, etc.," Hakami says. "But the biggest challenge was making sure that all the data was accurate. To ensure that, we had to 'cleanse' the data before posting it." By "cleansing," Hakami is referring to the process of checking and rechecking the data for inconsistencies and errors, which can crop up if, say, a retailer reports the wrong numbers one week. Once the data is "clean," it gets published in timely reports that Bernard Chaus can use to make decisions about inventory, shipments, or any other facet of its business.

Thanks to Sky IT, which uses IBM software and BladeCenter servers to build its SkyPAD solution, the wholesaler can view key business metrics at a Web-based dashboard each week. Execs can see which items are selling quickly at which retail locations. They can move products between stores, adjust pricing, and compare profit margins across sites. One area where Bernard Chaus has made measurable gains is in mark-downs. The company has reduced quarterly sales revenue losses from marked down inventory by nearly 50% in the past year.

Armed with an analytics solution, Bernard Chaus executives feel optimistic about holiday-season sales. The next step for the wholesaler? Integrating company data and linking it to overseas manufacturing facilities. That way, it can create a comprehensive view of its entire supply chain. "Business analytics technology provides tremendous value, especially as we look to expand our global operations," says Ed Eskew, CIO at Bernard Chaus. "SkyPAD has become as mission-critical as our ERP system, and in some cases, even more so."