Measuring Up

Small to midsized businesses (SMBs) are living a golden age as new technology options give them the stuff to compete -- or at least partner more effectively -- with the largest organizations. But SMBs have to be smart; even in an on-demand world IT infrastructure is critical to flexible growth.

Sizing to Business Need

Fortune 500's IT advantage over rising SMBs disappears as on-demand applications grow more scalable, reliable, and integrated. Especially in the realm of CRM, Web analytics, and marketing management and optimization, SMBs coming of age today have a better shot at matching dynamic business requirements with equally dynamic IT resources — rather than falling short, as they have previously, of being able to amass the high-capacity IT armada that the Fortune 500 can muster. Such dynamism may prove increasingly important as companies of all sizes struggle to gain competitive advantage from new resources, such as radio frequency identification (RFID) data.

As Wal-Mart's business partners know, the RFID monster isn't the selective concern of only large organizations. Chip costs continue to decline; RFID will be nothing if not a form factor change that will affect entire supply and demand chains that serve both public (including military) and private institutions. In late September, Microsoft Business Solutions (MBS) stepped forward with an initiative to help SMBs address RFID technology compliance mandates. According to Microsoft, Jack Link's Beef Jerky will integrate RFID data with MBS's Navision applications to automate existing manual auditing processes. "The power of RFID to automatically capture the physical movement of an item and have its electronic shadow follow it in real time is something that, in time, will help address many of our customers' business challenges," said Satya Nadella, corporate VP of MBS. (For more information, see News & Analysis)

The RFID onslaught is just one factor that could expose SMBs that are trying to grow without giving due attention to the importance of having a scalable IT infrastructure. Dealing primarily with what IT vendors call "partners," it's critical that today's SMBs press these systems developers, value-added resellers, and packaged application providers about the extensibility of their infrastructure. On-demand access is an important piece of the scalability puzzle, but SMBs must take a peek beyond the interface and consider the database and middleware that will do the heaviest lifting. In 2004, both Oracle and IBM have clarified their programs for business partners that serve SMBs. In July, IBM expanded its Solutions Builder Express program, which employs IBM middleware to set the foundation for integrating collaborative document management, analytics, and transaction applications.

The potential of middleware-based business automation is drawing SMBs to vendors, such as Tibco, that have built their reputations in mostly large organizations. Meridian Health Care Management, for example, worked in tandem with Tibco's professional services to turn paper-based processes into electronic data interchange (EDI) transactions based on Tibco's integration software. With HIPAA looming large, Meridian had to reduce operational costs and invest in an infrastructure that could handle growing B2B transaction volumes. SMBs, like nearly all organizations, are under pressure to reduce inefficiency and improve their accountability in the face of governance and compliance pressures — something they have in common with their larger business partners, who will require more careful information management from SMBs.

BI Adaptation

Business intelligence is critical for SMBs in fast-moving, competitive markets: but again, the infrastructure investment can be daunting. As Stewart McKie describes in his companion article ("SMB Excel-eration"), many organizations go with what's inexpensive, available, and gets them moving without a steep software learning curve. Largely, that means using Intuit's QuickBooks and QuickBase applications, Microsoft Excel or other spreadsheet programs, and sometimes reporting tools embedded in packaged apps.

However, the major BI vendors, including Business Objects and Cognos, are also devoting special attention to SMB customers. Qliktech, a BI company, is a good example of how newer vendors can exploit changes in technology to deliver business advantage at less cost. Qliktech is focused on riding the declining cost of memory to improve price/performance versus traditional, disk-oriented BI software. The company's technology lives primarily in what it calls the "data cloud": an expansive, memory-based resource that doesn't force users and developers to live within prearranged cubes, aggregations, and views. In other words, SMBs don't have to keep going back to developers every time they need a different view or dimension on their data.

Market changes are delivering golden times for SMBs focused on employing information technology to "measure up" to new partnership challenges thrust upon them by larger organizations — and address how they can support their own business growth more dynamically. Just has Rodney Dangerfield finally got his due respect, SMBs are also enjoying long overdue attention. IT vendors and SMBs have something in common: Both are focused on what will make business grow.

David Stodder is editorial director and editor-in-chief of Intelligent Enterprise.