Aberdeen Research drew that conclusion following a survey of 530 SMBs worldwide. In studying the companies, the research firm found that the best-in-class SMBs achieved a 29% average year over year increase in operating profit, a 4% average year-over-year decrease in BI cost per user, nearly 100% delivery of BI to end-users in a self-service capacity, and a 14-day average deployment time of BI applications.
In achieving that level of performance, the best-run companies were three times more likely than other companies to have a formalized BI training program, nearly two times more likely to have the ability to monitor the usage level of the BI system, and 66% more likely to leverage data cleansing tools, Aberdeen said.
Based on the study, Aberdeen determined a number of "required actions" in order to achieve best-in-class performance. Those actions included defining sets of business unit key performance indicators (KPIs) that roll up to the overall company strategy, establishing teams from across the organization to facilitate the deployment of BI tools, and starting to migrate away from spreadsheets and toward dedicated BI.
In looking closely at the Aberdeen study, the best-performing companies were willing to think outside the box to create an analytical culture and infrastructure that delivered value at the lowest cost. In doing that, managers often took a three-pronged approach that included delivering business visibility, resource optimization and cost management.
In the first area, best-in-class organizations leveraged strategic and tactical tools to guide their decision-making and to achieve improvements in profitability and customer service, Aberdeen found. In optimizing resources, top companies were exploring ways to break out of the confines of spreadsheet-based static reporting, whether it was through on-premise BI, open-source tools or software-as-a-service implementations.
The best companies also undertook strict oversight and controls and continually looked for ways to reduce wasted effort, to better leverage in-house domain expertise and to lower the cost-per-user of BI tools.
Best-in-class companies typically operated within a PACE framework, Aberdeen said. PACE stands for pressures, actions, capabilities and enablers.
The pressures were the result of competition driving the need to improve speed of access to relevant business data. The actions were identifying areas of the business that could achieve the fastest return on investment from BI and aligning business goals toKPIs.
The BI capabilities delivered included automated report generation and delivery to the end user, establishing an "information culture" that values timely delivery of data, monitoring the number of users accessing the BI system and using cross-functional teams for faster deployment of BI tools.
Finally, Aberdeen found that the technological enablers of higher operational performance included reporting and analysis tools, data integration tools, performance reporting dashboards, real or near-real time reporting and analysis, data-cleansing tools and operational dashboards.
Aberdeen also found several strategic initiatives that helped the highest-performing companies align their organizations for successful BI implementations. First was to automate elements of their "information value chain" to lessen the technical burden to the organization, Aberdeen said. Such actions reduced cost and made otherwise expensive BI implementations more affordable.
In addition, companies with the highest performing operations took steps to identify areas of the business that would deliver the most tangible and rapid ROI from a BI deployment. Also, the best-performing companies took the necessary steps beforehand to clean, refine and organize back-end data sources.
"By making the up front effort to make their data cleaner and more relevant, they've created a downstream effect of providing better informed decision support to their employees," Aberdeen said.
Once data sources are in order, best-in-class companies strive to make BI available to as many employees as possible by utilizing a "land and expand" strategy, Aberdeen said. That is, a company will deploy BI to one strategic function, such as sales, marketing or finance, wait for the the technology to prove its work and than expand to other areas.
Finally, Aberdeen determined a number of "required actions" for achieving best-in-class performance through BI. The steps included defining sets of business unitKPIs that roll up to the overall company strategy, migrating away from spreadsheets to dedicated BI, and using meta-data management tools to ensure that one set of data definitions is used during the integration and BI application development process.
Other steps include the use of BI deployment teams that represent multiple departments within the company. Once the BI tools are in place, usage has to monitored to determine the level of functionality users are leveraging, which ultimately leads to a more efficient implementation. Also, to help ensure user adoption, formalized training programs have to be implemented.
Other steps to success in BI, based on the evaluation of the highest-performing companies, include the use of outward customer-facing dashboards and BI tools. "Providing an easily accessed dashboard view into a customers' account information, order history, new product releases or discounted products and services -- just to name a few -- is a very powerful way of maintaining customer satisfaction and retention," Aberdeen said.
Finally, the best companies regularly review software licensing, deployment and service options from BI vendors, in order to take advantage of the unprecedented number of options available in today's highly competitive environment.
The full Aberdeen report, entitled "BI For The SMB 2009: How To Slash Cost and Empower The Business User," is available on the analyst firm's Web site.
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