Donny Shimamoto
Donny Shimamoto

Business Intelligence Made Easy for Middle-Market Companies

How to gain a competitive advantage.

May 5, 2011
by Donny Shimamoto, CPA.CITP

Cloud computing and consolidation in the business intelligence (BI) vendor space are making BI tools more affordable for middle market organizations (MMOs). Combine that with the greater agility and simpler decision-making structures present in smaller organizations and it is easy to see how MMOs are a prime candidate to leverage the power of BI tools.

It's a widely held myth that BI initiatives have to be big unwieldy beasts. While a good BI initiative starts with a "big" vision, real success in BI initiatives comes from starting small, and building incrementally toward a well-articulated vision. The greater homogeneity and increased organizational empowerment present in MMOs reduces the overall complexity of a BI initiative — reducing the risk of the initiative not meeting its goals.

BI Technology Becomes Affordable

The latter part of the last decade saw a consolidation of BI vendors as IBM, Microsoft, Oracle and SAP all sought to balance out their BI technology portfolios by acquiring vendors with complementary functionality and niche players that provided competitive positioning in an industry vertical.

Reader Note: Don’t miss Donny Shimamoto’s session on Business Intelligence at AICPA Controllers Workshop West, July 28-29 in Las Vegas, NV.

Recognizing the need in the middle market, many of the vendors started offering scaled-down versions of their BI platforms. While these scaled-down versions offer less application features, these "BI appliances" are sufficient for MMOs whose business processes aren't as complex as the bigger organizations that initially led the charge into BI adoption. While these scaled-down versions do require increases in storage footprint, they also offer better performance at lower price points and are easier to implement, so are perfect for MMOs.

BI is becoming affordable because cloud computing offers on-demand BI deployment for MMOs who often don't have the IT staff to manage servers or perform data-management tasks. Combine web-browser-based BI cloud solutions with ease of access that is available with new mobile technology devices, like the iPad and BI becomes an even more practical solution for MMOs. According to Stamford, CT-based information technology research and advisory firm, Gartner Inc., "Mobile BI has the potential to significantly expand the population of BI users to include a much more mainstream audience."

BI Enables Competitive Advantage

As globalization increases market opportunity and competition and cloud computing makes available technologies more accessible (formerly only affordable by large companies), MMOs are in a prime position to leverage BI for competitive advantage.

BI technology by itself does not provide competitive advantage. By putting the information necessary for better decision-making and proactive actions into the hands of business users, BI enables competitive advantage. Improved ease-of-use of BI tools help to eliminate IT staff as the "middle man", allowing accountants and other business users to setup their own data imports and automate report generation thereby improving the timeliness and availability of information.

Increased access to timely information combined with empowerment in decision-making, can enable MMOs to make more effective decisions. And it is this effective decision-making ability that experts contend is the key to competitive advantage in the global marketplace. As defined by Chartered Institute of Management Accountants (CIMA):

Effective decisions are those that achieve impact. An effective decision-making process spans from how strategic decisions are informed and considered, through how performance and risk are assessed and managed, to how routine operational decisions are guided, made and governed so the intended impact is actually achieved.

With their smaller size and increased organizational agility, MMOs can leverage BI technologies to deliver actionable information to their managers. This will improve decision-making effectiveness and unlock opportunities for competitive advantage by enabling greater organizational responsiveness to changes in the business environment. From the strategic level to the operational level, MMOs can leverage BI to out-maneuver their competitors and better execute their mission.

Starting a BI Initiative

To begin a BI initiative, MMOs should start with a good vision. Ask the following questions to identify opportunities to improve the effectiveness of decision-making:

  • How can I improve the effectiveness of my decisions at the strategic level? At the tactical level? At the operational level?
  • What information do I need to make more effective decisions?
  • If made better, which decisions would have the greatest impact to my organization's performance or ability to achieve its mission?

Once you have an inventory of the opportunities, prioritize them based on the expected benefits and level of effort that would be required to address the opportunity. Then follow a functional approach asking the questions of who, what when, where, why and how to help you select a BI tool and ensure the success of your BI Initiative (see Is Your Business Intelligence Project Successful?).

Balance tool selection criteria with addressing near-term opportunities and longer-term flexibility and scalability. Also be sure to address data security and privacy issues by carefully reviewing the agreements and policies of the selected vendor or service provider and obtaining the appropriate Service Organization Control (SOC) report to obtain assurance that the risks are mitigated.

Put BI on Your Agenda

The evolution of the BI technology landscape has made BI more affordable and manageable by MMOs. MMOs should leverage BI technologies to deliver actionable information and gain competitive advantage by improving the effectiveness of their decision-making. As CPAs contribute to the success of a BI initiative through the utilization of a functional approach to support decision-making, they ensure that risks are mitigated. By starting small, but working toward a greater vision, MMOs can realize immediate returns on their BI investments while building for their future.

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Donny Shimamoto, CPA.CITP, is the founder of IntrapriseTechKnowlogies LLP, a CPA firm focused on organizational development and advisory services for the middle market.