Small and medium sized enterprises (SMEs) form the backbone of the world’s economy. Research says the about 95 % of the enterprises contributing to the World’s Economy are SMEs. A survey by the World Bank, which was taken in the year 2006 revealed that around 140 million SMEs from over 130 countries employ sixty-five percent of the total labor force. SMEs is the spine for the global economic structures since they support the large enterprises and provide them outsourcing capabilities and also their adaptive potential has helped them to attain an important position in the global economy. They are the defibrillators for talent, innovation, creativity and entrepreneurial spirit, which are essential for a nation like India to develop on the economic grounds.
How Intelligence systems affected the growth of SMEs?
Since SMEs are small business firms, an adoption to different tools becomes a matter of concern for them. Numerous Intelligence systems were addressed by the SMEs in the past works. These works were based on special Intelligence System problems such as:-
- Internet Adoption
- System integration
- IS Management
Now, focusing on the major problem i.e. Adoption of Technology. Below is the list of factors that majorly play a role in influencing Internet Adoption:-
- The characteristics of the firm
- The competitiveness and management strategies of the firm;
- The role played by the internal and external parties in the adoption decision process;
- The characteristics of new technologies.
Focusing on these issues, it is visible that the decisions are greatly influenced by the owners of SMEs since their work in not delegated unlike the larger organizations where they have a different IS management organization that are well-educated and experienced in this specific field. When it comes to the owners of the SMEs, the factor that they may or may not be well acknowledged and experienced in this field governs the role of Intelligence systems in SMEs.
What is Business Intelligence (BI)?
The technology-driven process for analyzing or examining the data and providing the actionable Intelligence to aid the corporate executives, business managers and other end users make for informed and sound business decisions to maximize the profit and reach the top scale of reputation is known as Business Intelligence.
There have been many studies conducted to analyze the success factors of Business Intelligence. The most significant factor in case of SMEs came out to be the initiation taken by the top management. As already being mentioned, it’s always the top owners of the SMEs who decide the adoption of IT issues. Hence, we can imply that in case of SMEs, it is more about the “Interest Factor” rather than “success” for Business Intelligence.
The benefits availed from BI systems are many. Some of them are listed below:-
- Business Intelligence enables the manager to take proper decisions at the right time.
- BI also enables the manager to analyze and examine the data in an organized way which thereby helps them to improvise their business strategy.
What problems do the SMEs face when implementing Business Intelligence?
- Burial of data in multiple layers:-
The Business Intelligence of the Small and medium sized enterprises is buried in multiple layers and legacy systems. Hence, it becomes really difficult for the SMEs to access this Business Intelligence.
Wrong perceptions about Business Intelligence implementation which hurdles the progress of SMEs:-
- BI implementation is expensive
- It is time consuming and a cumbersome process
- In case of SMEs and other established entities, implementation of Business Intelligence is perceived to be a very risky proposition.
What is the actual scenario?
- The benefits availed from the implementation of Business Intelligence by SMEs were far more than the cost incurred when SMEs computed the BIs’ return on Investment.
- The advanced technologies which aid the SMEs by permitting an access to cloud computing, direct data querying at the local level and numerous online modeling techniques contributed in the changed scenario on implementation of Business Intelligence by SMEs.
The evaluation of BI as a viable and beneficial tool for SMEs can be done using these 3 prospects:-
- Challenges faced by SMEs while implementing for Business Intelligence
- The Intelligence needed to take improved and right decisions for business is not stored in one silo; instead it is segregated in different formats like in manual documents to excel sheets. Hence, SMEs find it difficult to avail the required Intelligence. Here, Business Intelligence needs to provide the required data in up-to-date and organized fashion.
- Availing the Intelligence is just one step; after this, SMEs need to transform the found raw data into useful and productive Intelligence to use it in the plan of action. This transformation is cumbersome and since the skills of the employees working for SMEs are limited, this process sometimes is out of their league.
- As already being discussed, the graphical interfaces of BI systems are challenging to use and they might need expert technical professionals to deal with it. Needless to say, the ordinary users of SMEs wouldn’t be able to do this.
- In the conservative setups, the traditional managers have the tendency to “discover” and manipulate the “Management Intelligence Systems” according to their own terms and conditions. This alleged manipulation might give rise to ambiguous conclusions and inner conflicts.
- The management in SMEs is not up to the mark and never updated on time since they are updated manually. Let’s say, a one will receive the march’s sales figure a month after that and also they will Intelligence about the fastest selling products way later. This manual handling and reporting of data fails to give accurate Intelligence in adequate time.
- Solutions to the above mentioned problems or “action points”
- A surface level study is never recommended to run an enterprise. Hence, SMEs should plan and investigate at the micro level; only then they will achieve the desired goals.
- SMEs should be aware of what Intelligence needs to be extracted from the system in order to save the time. Sometimes a small piece of Intelligence works wonders while sometimes a huge stack of data is insufficient. Here, BI system aids the management to take right and quick decisions.
- Simplifying the ambiguous data is really necessary to work efficiently. Hence, SMEs should convert their complicated data into simpler form to generate good insights or inferences.
- The raw data extracted serves as a very helpful tool when calculations and business rules are needed to implement Business Intelligence.
- Strategic planning is a key to a successful enterprise. Hence, proper organized planning must be done to know as to how to compile the data together.
- The benefits of implementation of Business Intelligence for SMEs
- Practical Intelligence:–
Implementation of the analytical tool for précised decisions i.e. Business Intelligence helps the SMEs to gain practical knowledge which they never experienced before.
- The prompt nature of Business Intelligence saves time:-
Business Intelligence has shown its’ wonders everywhere; for instance generating intelligence from a really small subset of data overseen by the expertise. At present, the BI system has inbuilt intelligence and because of this, the decisions are impromptu in nature.
- Real time phenomenon:-
The inbuilt intelligence of BI system not only helps the manager or the analyst to peek in the history of the enterprise but also helps in predicting the future. This makes the BI system realistic and approachable.
- The visual interface of the BI system adds on to its’ benefits:-
Business Intelligence system has a well designed graphical and visual interface. This helps the users to analyze and compare the past, present and future with colorful and differently designed statistical graphs, pictures, etc. this visualization adds on to the benefits of the Business Intelligence systems.
- Well organized and integrated Intelligence system:-
As discussed earlier, the Intelligence in SMEs is scattered in different formats from a manual database to the excel sheets; which makes it difficult to access the Intelligence. Now, the Business Intelligence system removes the unaccounted and ambiguous data and presents a well-organized and a more holistic picture which is a compilation of data from all the data sources.
The above study shows that SMEs need a proper data-analytical tool to extract business Intelligence and implement that in their respective organization to yield better results. Extracting the data is one step and implementing the same in the plan of action is what actually the data is for. Hence, Business Intelligence system is the helping hand for the SMEs to derive the data and make proper and improved decisions. To maintain a balance between the challenges and implementation of BI system, it is mandatory for the SMEs to expand their horizons and hire expert professionals who have technical knowledge to use the complicated graphical interface of BI systems and implement the same in the plan of action.