Mid-sized businesses in the UK know that better decisions could be made if they had the right information. But assembling that data continues to present them with a major challenge. As a result, executives often lack faith in the underlying data they are dealing with and are often unable to share insights across their companies.
Those are the key findings from new research carried out on behalf of IBM Cognos by Quocirca. It tele-surveyed 100 board level respondents in businesses employing between 99 and 1,000 staff about their adoption of business intelligence tools and the data management processes which underpin them.
Nearly half (46 per cent) admitted to concerns about the overall integrity of the information they use. A primary reason for this could be the lack of a standardised database strategy in this sector – just under one in five have a single, unified database driving their business intelligence.
Three out of ten aim to assemble data for BI into a single source where possible, but the largest group (36 per cent) are more concerned about the functionality of their BI than where the data comes from. “This is a very pragmatic market – they are not hung up about technology,” notes Clive Longbottom, service director, business process facilitation at Quocirca.
While the ends may justify the means, this disguises the issue of key information being locked inside systems that can not be distributed. “A lot of the data sitting outside of formal databases is in spreadsheets, like Excel. Not only does that cause problems, because it is a non-shared environment, but that data is also being stored locally on C-drives. A large proportion of the information needed for BI is only held in places where it is very difficult to get hold of it,” says Longbottom.
Line managers and individual functions often assemble reporting data in spreadsheets before passing it upwards for end-of-month reconciling. By the time any problems are identified, such as totals that do not tally, these managers are into the next cycle of data assembly.
Mid-market businesses are aware of the problems this can cause. In the survey, 42 per cent said that, while there was a degree of control, some information is not available when or where it should be. A further 27 per cent said that they struggled to control spreadsheets and that this was hurting their business.
Longbottom points out that version control is one of the biggest failings of spreadsheet-driven BI. “People are not aware whether they have the latest version of data. If something has been changed by the originator, they may still be working from the last version they have in their in-box,” he says. Although 32 per cent said they use shared folders to enable data access, 24 per cent rely on email.
Infomation needed for BI is held in places where it is very difficult to get hold of.
For decision-making to be effective, there needs to be a robust business intelligence process in place. Just over four out of ten businesses have highly formalised processes in place, although nearly two-thirds of these administer the process manually against one-third who have workflow tools in place. Manual processes are still used by one-third of all companies.
So what impact do these data management issues have on the use of business intelligence and, ultimately, the performance of mid-market companies? The minority have a structured approach that allows them to monitor closely what is happening. The survey found 7 per cent using KPIs and tracking performance on a continuous basis with 24 per cent having KPIs that are regularly reviewed.
The largest group (32 per cent) use plans and targets that are occasionally reviewed. But as Longbottom notes, “3 per cent muddle along from day-to-day using firefighting, while 29 per cent say if business is ok, why worry? When they have got good margins and revenues, they can live without business intelligence.”
One of the main obstacles to better adoption of BI in the mid-market is down to the way it is talked about. “When we are cold calling, people often don’t understand the concept. They have got spreadsheets and find it hard to understand there is a better process. We need to translate it into practical benefits,” says James Bureau, senior sales manager at Inca Software, which sells end-to-end solutions to this market.
That is one reason why IBM Cognos commissioned the research in order to understand this sector. According to the company, the findings will be used to develop its marketing and messaging into the mid-market. BI could be about to get mid-sized.