BI tools on the rise among U.S. SMBs 9 June, 2008 By Erin Bell

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There are about 6.3 million SMBs (which AMI-Partners defines as companies with up to 999 employees) in the U.S., with about 98 percent of those being small businesses with 99 staff members or less.

The survey revealed that about 9 percent of PC-enabled small businesses and 37 percent of medium businesses are currently using BI in the form of packaged software. A further 5 percent of small businesses and only one per cent of medium businesses are using BI as part of an online SaaS tool for 2008.

"PC-enabled SBs in the U.S. are interested in running BI on their consumer data to drive and monitor performance against the competition," said Nichelle McKenzie, New York-based research analyst at AMI-Partners. "The payoff is rapid innovation, new marketing ads and new channels to boost their profit margins. Almost 80 percent of SBs try to understand TCO (total cost of ownership) before purchasing BI products/services. That's because they want these purchases to be a part of their overall IT strategy."

About 16 percent of small businesses and 22 percent of medium businesses surveyed said they use BI or data mining and forecasting financial planning as part of an ERP/SCM module, with the dominant sectors being wholesale and retail. This makes sense, according to McKenzie, considering the volume of e-commerce and email data that is collected daily. "However," McKenzie continued, "for MBs we see a different pattern, where 30 percent are using BI as part of ERP/SCM and professional business service is the dominant sector."

More than 25 percent of the small business that use BI separate from a larger module said they felt that it is important to study and use e-commerce data to drive sales and revenue.

"SBs are using CRM data to deploy BI software," McKenzie said. "However, we still see the need for awareness of BI and the positive impact that it can have on SBs. Most SBs in the U.S. use BI as part of the ERP/CRM module."

One of the factors driving small businesses to adopt BI is the feeling that the existing software is no longer adequate. As a result, AMI concludes that BI is a growing area for vendor investment in 2009 -- and since there is no current dominant market leader in the BI space, there is a great opportunity to make a mark.

Based on AMI's annual surveys of SMBs across the U.S., the two studies, entitled 2007 US Small Business Overview and Comprehensive Market Opportunity Assessment and 2007 U.S. Medium Business Overview and Comprehensive Market Opportunity Assessment, highlight major trends, products and services, and issues including budgets, service and support, and channel preferences.