It’s a fact: 98% of the six million American businesses employ fewer than 100 people and are deemed “small businesses.” Moreover, they employ fully 42 million Americans. Yet these “Mom and Pop” shops as they are often (and often derisively) called face the same kinds of challenges as larger companies, albeit on a smaller scale. And today, they all need this thing called “Business Intelligence” in one form or another.
Historically, small businesses simply lacked the resources and wherewithal to employ sophisticated tools aimed at analyzing their business results. But today, those tools are within the reach of all but perhaps the smallest of that 98% of American firms. And according to research done by Aberdeen Research recently, those analytical tools are making the short list of potential investments on the part of small businesses everywhere.
According to 2013 survey by Aberdeen, following are four key Top Priorities for Business Investment among all small firms:
- Business Intelligence and Analytics
- Enterprise Applications
- Mobile Infrastructure
- Data Management
Aberdeen reports that typically 40% to 50% of firms with revenues above $10 million are in the market for one or more of the above business investments. For firms under $10 million, it’s still mostly in the range of 20% to 30%.
After the economic meltdown, ‘cautious optimism’ is the watchword of the day among businesses. Besides hiring, companies are looking for intelligent ways to put money back into the business and to encourage growth. And because of the very nature of small business – fewer employers doing more with less – the impact of every day decisions can be proportionally much greater than in the larger enterprise, which has much more room for error.
Which customers should I spend my time with? What product line should I cut? Where are my top margin-producing sales? Where should I spend my time (and money)? These questions are at the heart of every small business. And because of the need to go beyond “gut feel” decisions, more small companies are turning to business analytics today to provide more fact-based decision support.
The drivers for more data-based decisions cited included an over-reliance on “gut-feel” for major decisions… the fact that firms have “lots of data, most of it unused”… poor visibility into operational performance… and the increased demand from employees for analytical capability.
If these sound like issues in your businesses, don’t be surprised… and take heart – you’re not alone. In the second of this three part post, we’ll look at how companies used business analytics to transform the culture of an organization, and then look at some of the characteristics of today’s leading small businesses and how they affect their performance, according to Aberdeen’s research. Stay tuned…