Written by Alice Payne
Posted on 22/01/2015

Why SMEs may have a business intelligence advantage

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Small and medium-sized enterprises (SMEs) differ vastly from big businesses. While SMEs may not have the power or financial strength of their larger counterparts, this size discrepancy can produce a number of advantages.

Size advantage

Reports by Dresner Advisory Services found that SMEs are often more flexible and closer to their customers than their larger competitors. This proximity and capacity to adapt gives SMEs a valuable business intelligence advantage.

Smaller-sized businesses often rely on a reduced pool of clients who generate a large proportion of their work. The high dependency-level of these connections means that these companies build stronger relationships with their clients, gaining greater insight and business intelligence.

Furthermore, unlike in larger, more rigid companies – where implementing change can be a lengthy process – SMEs can often execute changes and deliver greater agility around their clients’ needs. Underpinning this is the finding that SMEs report higher levels of business penetration than larger organisations. And within the SME category, smaller enterprises record higher levels of penetration than mid-sized businesses.

One of the reasons for their success could be that, with smaller data systems, SMEs can invest greater trust in their organisations’ streamlined data . In larger organisations, sharing data and business intelligence can be less coordinated.

“SMEs have the advantage of agility and the ability to use BI as a competitive differentiator,” explains Howard Dresner, chief research officer at Dresner Advisory Services. “Because of the closeness of executives to the technology, business and customers, they have an edge against larger competitors.”

A streamlined approach

While larger businesses may have greater human and financial resources, enabling them to spend more time and money on gathering business intelligence, SMEs often face less operational challenges in leveraging this knowledge.

“Larger organisations get bloated with bureaucracy and process, forcing them to focus [business intelligence] upon efficiency,” Dresner explains. “In contrast, smaller enterprises are, by definition, more efficient and can focus externally – enabling them to take market share from larger players.”

SMEs – a growing market for business intelligence

And the market is responding to this advantage. Previously, business intelligence providers focussed on targeting large businesses who offered more profitable deals. However, as the nature of business intelligence evolves and technology solutions become more versatile and suitable to clients of all sizes, SMEs have become a more attractive sales proposition. Dresner explains, “of course, larger enterprises continue to generate the big deals, but they are far fewer in number than SME deals. SME is a growth segment for vendors.” And this change in market landscape is also affecting how business intelligence vendors are approaching prospective SME clients, who typically seek lower cost deals.

As products evolve to meet market demand, the adaptable nature of SMEs is fuelling greater flexibility in business intelligence technology. Befitting their more mobile nature, mobile device support, dashboards and cloud technology are all growing in popularity amongst SMEs.

“Cloud enables readily-implemented and consumed solutions at a price point that enterprise software can't approach. And everyone loves dashboards,” says Dresner.

It’s precisely this agility that positions SMEs so uniquely. With a flexible growth strategy, SMEs can be extremely well-placed to access and implement business intelligence, and evolve their strategy for maximum success.

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