Once the preserve of the enterprise, business intelligence (BI) and analytics are now becoming available to small-to-medium (SME) sized companies through simplification and their appearance as tools in standard software solutions. Simon Michie, Head of Cloud Services at Redcentric, looks at what’s driving the use of analytics and how SMEs can benefit from their use.

With the volume of data continuing to rise and industry scrabbling to define new terms to describe it, it’s no surprise that big data and software that enables companies to manage it has become the new ‘big thing’. Managing big data and, more importantly, finding ways to draw useful information from it has become big business.

For the enterprise it makes sense to utilise data and information that already exists within the organisation to aid better decision-making. It means turning data from an operational cost into an asset. Take for example the company that records all of its communications and interactions with customers - whether on the phone, by email or over the internet. Within those records is the ability to understand buying patterns, propensity to buy and even potential new product or service lines.

Analytics can come in many forms and it’s certainly not just restricted to financials or customer behaviours. Take the security industry for example: companies such as DVTel, an end-to-end video surveillance company, builds analytics into its software so companies can use monitoring data to improve decision-making.

What’s clear is that BI and analytics are incredibly useful in driving company growth. However, for most companies the ability to employ these tools has remained firmly off their agenda for a number of reasons.

Firstly, traditional BI software tools are costly to resource and to implement. The very size and nature of data makes it difficult to manage and, while BI tools typically go some way to simplifying the management of data, they’re still cost-prohibitive for most small businesses.

The complex nature of managing that much data and turning it into something that’s easy to understand is also often outside of the technical capabilities of small companies. This complexity also appears to be hitting battle-weary enterprises, with industry analyst Gartner reporting that big data hyperbole as one of the reasons that expenditure on BI software saw ‘muted growth’ in 2012.

‘After a few historic banner years of spend in the BI software market, which culminated in more than 17 per cent growth in 2011, growth was more subdued in 2012, at 7 per cent,’ says Dan Sommer, Principal Research Analyst at Gartner.

Gartner also believes that BI and analytics are driving technology away from the IT department and into the hands of the business user. Eammon Killian from IBM agrees: ‘Chief marketing officers (CMOs) are best placed to utilise information generated from analytics - not the CIO.

What we’ll see is analytics and BI becoming a battleground for c-level employees as the promise and potential of analytics continues to improve.’ For the CIO, BI represents a strategic tool worthy of board-level discussion, and they are in the perfect position to manage the process of turning data into usable information. Yet, it’s actually the CMO who’s most likely to utilise the analytics.

Another limiting factor on the adoption of BI for SMEs was the way data was typically stored. For most SMEs, their IT solutions grew incrementally as they did: a strategy for data management isn’t typically developed until a company reaches a certain size. This means that data can be spread around the organisation residing on individual devices and servers in a less than coherent or cohesive manner.

Gaining any kind of data to turn into information was challenging from the outset. This is where the cloud has provided SMEs with a way to level the playing field. By putting data into the cloud or utilising a database as a service (DBaaS) solution, SMEs can gain high-end enterprise database services and an effective data management provision but at SME prices. Killian adds, ‘The smart cloud enables companies to increase their use of analytics by improving access to BI across siloed departments.’

With the advent of the cloud and a BI weary enterprise market who demands simplification, it’s no surprise that vendors are beginning to build analytical tools in as standard.  In fact this simplification has been identified as ‘lean analytics’.

In an article by Brian McKenna in Computer Weekly, where he reviews a new book on the very topic by Alistair Croll and Ben Yoskovitz, he comments that, ‘at the heart of...lean analytics is a democratisation of data, underpinned by cloud and social media technologies.’ Croll argues that a ‘fundamental shift in how businesses are run and how decisions are made is underway.’

We’re also seeing analytics built into applications to improve the software itself. Lancope, a network security company, recognised that IT managers were lacking a single source of information when faced with attacks that can span devices, locations and times. Tariq Ahmed, EMEA & International Managing Director at Lancope, comments: ‘We apply NetFlow telemetry and analysis to provide context to attacks. By adding behavioural analysis to activity on the network we can determine what is and isn’t a threat.’

So as data becomes more democratic, how can SMEs benefit? In fact the main benefits of analytics remain the same whether you’re a large or small organisation: the ability to access real-time information on which to base decisions; to ensure data integrity; and to make sure that the right people in the company are able to access the right data at any time. In larger organisations, analytics are typically used by the finance and marketing teams to ascertain operational processes such as profit margins in real time, overheads and delivery times.

What changes for the SME is the ability to use their data to predict future scenarios. Imagine the possibilities. You’re an SME with a new business idea and rather than look for investment to develop the service, you can employ analytics to test the marketplace first.

If it’s viable, you have statistics to support venture capital funding applications; if it isn’t, you can continue to refine and develop the service. It can work for anything as small as market testing a new menu on potential restaurant customers to determining the size of the market for a new electric car.

For clarity of how analytics can be used effectively, SMEs should look to the retail sector as a shining example. When they were first launched, point-based cards were viewed simply as a way for the customer to benefit for their store loyalty.

However big-brand supermarkets have employed real-time data so successfully that both the store and the customer benefit from targeted but low-margin campaigns aimed at individuals on a mass market basis. From this example it’s not too hard to see how, in the near future, analytics will prove to be the smart way to make a business decision.