Businesses have always needed the ability to track and measure critical success metrics in a quantifiable way. The problem is that when there’s too much information, people find it difficult to fully comprehend it and make decisions. In fact, more than one-quarter of SMBs in our 2011 SMB Routes to Market Study indicated that “getting better insights from the data we already have” as a top technology challenge.

And the problem is growing: Scientists report that more than1.2 zettabytes of digital information were created in 2010. What’s a zettabyte, you may wonder? (I know I did.) A zettabyte is 1,000,000,000,000,000,000,000 bytes–yes, that’s 21 zeroes! Online video, social networking sites, digital photography, and smart phone data are all contributing to the data pile-up. If that’s not enough to make your head spin, researchers also predict that the annual rate at which we collectively produce data will soar 44 times over the next decade.

The Gap Between BI Haves and Have-nots

Business intelligence and analytics solutions are designed to help make sense of all of this information. However, many SMBs often view these solutions as too complex and/or expensive. And companies without an accurate, consistent and accessible data source face the additional challenge of aggregating and rationalizing data from different sources.

SMB Group surveys reveal that the smaller the company, the less likely they are to use or plan to use BI solutions (Figure 1).  Our 2011 SMB Routes to Market Study showed that while 33% of midsize businesses currently use and 28% plan to use BI solutions, among small businesses, just 16% currently use and 16 % plan to use BI solutions.

Figure 1: SMB Use and Plans for Business Intelligence Solutions

Source: SMB Group 2011 SMB Routes to Market Study

The danger is that relying on hunches and intuition alone can put you at risk of missing trends and market opportunities or spotting potential problems–all of which can hurt business performance.

Some of the warning signs that your company’s growth may be hampered due to am inadequate ability to analyze data are shown in Figure 2.

Figure 2: Warning Signs That Your Company Has a Data Analysis Problem

Source: SMB Group

Closing the Gap

Adding a BI solution on top disparate, inconsistent and unreliable data is like putting lipstick on a pig.  So you need to start by establishing a core foundation of common, trustworthy and accessible data that’s shared across core business applications and processes. If you’re already run your business with an integrated business solution that pulls everything together into “one version of the truth”, you’ve already fulfilled this requirement. If not, you’ll want to integrate or upgrade the core solutions that your business relies on to ensure that you have a consistent and unified data source.

With this foundation in place, BI tools, dashboards and reports can help you to zero in on the insights you need to move your business ahead. The good news for SMBs is that several vendors now provide BI solutions tailored to meet SMB requirements and budget constraints. The bad news is that it can be difficult to figure out which one will be the best fit for your business.

While there is no “one-size fits all” solution that will be right for all companies, you can start by determining the core metrics that your business needs to measure. Many of these are likely to be areas that you need to measure and track long-term. Depending on the type of business you’re in, these could include things such as:

• The percentage of income you derive from repeat customers vs. new customers
• Times for order to ship, ship to invoice and receivables overdue
• Time to respond to and close customer service calls
• Procurement and spending analysis
• Employee turnover rate

Given the pace of change in your industry, your business goals and the overall economy, you’ll probably want to make additions and adjustments over time as well, so look for a BI solution that can adapt to your needs as they change.

Figure 3 provides a checklist of additional questions to ask as a starting point to evaluate different BI solutions.

Figure 3: Key Considerations When Evaluating BI Solutions

Source: SMB Group

Getting the insights you need from a rising avalanche of information isn’t easy–but it is a critical business success factor. With the right BI tools in place, you can harness the data you have to get the wisdom you need to grow your business and stay ahead of the competition.

The 2012 Social Business and Collaboration Study will refresh the 2011 version. It will zero in on how SMB social business trends, and compare 2012 trends to 2011. Sponsorship opportunities are available–please let us know if you’re interested!

Meanwhile, enjoy.

Last month, Cisco introduced a new IT Infrastructure advisory and management service solution designed for VARs to provide to small businesses with less than 100 employees. Delivered via Cisco’s value-added reseller (VAR) channel, Cisco OnPlus enables VARs to offload the mundane, time-consuming tasks of managing a network environment from small businesses, and provide them with higher value advisory services.  In addition to monitoring and managing network infrastructure devices, such as switches, wireless access points and routers, OnPlus also monitors devices that are connected to the network (including smartphones and tablets).  VARs can deploy a small OnPlus Network Agent appliance at the customer site, and remotely monitor and manage it through the cloud via a secure web portal or mobile application.

Perspective

 Cisco’s OnPlus IT infrastructure advisory and management service solution is designed to meet the needs of small businesses. SMB Group’s 2011 SMB Routes to Market study indicates that small businesses’ top technology related challenges include: Gaining ‘peace of mind’ that IT is under control (40%); containing IT costs (38%); finding/hiring qualified IT staff(35%); upgrading IT infrastructure(34%); protecting business from IT related failures(32%); and getting more done with fewer/flat IT resources (26%). As illustrated in Figure 1, Cisco’s OnPlus with Assess, Manage, Advise, Maintain features helps directly address several of these technology challenges.

Figure 1: Cisco OnPlus – Comprehensive IT Infrastructure Management for Small Businesses

Source: SMB Group, January 2012

Several IT infrastructure monitoring and management solutions are available for small and medium businesses (SMBs) ,  but they are often cost-prohibitive for many small businesses. Cisco’s hybrid solution, consisting of an agent embedded in a small network appliance and a secure cloud service, is aimed squarely at VARs that provide managed services to small businesses. These companies often lack dedicated IT staff and tend to depend on part-time IT people or external contractors to manage IT. With scarce resources typically stretched thin, small businesses are often unable to keep up with the demands of routine technology management–let alone support growth goals with new technology solutions.

At the same time, many VARs are looking for ways to quickly and efficiently offer remote management services to their small business customers, and the ability to provide more proactive guidance and management advice.

 Cisco OnPlus gives VARs an efficient way to expand their managed service offerings through remote management and visibility into the customer  network and the devices attached to the network. VARs simply plug the OnPlus Network Agent appliance into a switch or router on the customer’s network, and the OnPlus Agent then transmits information about the customer’s network and all connected devices to a secure data center for access by the VAR (Figure 2). Native apps for Apple and Android mobile devices are available for free from those companies’ app stores. The VARs have the flexibility to define their own business model for using OnPlus.  Some  will add additional fees based on their coverage and response times. Others will use OnPlus to enhance their service capabilities without additional charges to their customers.  In addition, VARs can use OnPlus as a tool to accelerate pre-sale assessments with prospective customers.

Figure 2: Cisco OnPlus Solution Service Data and Communications Flow

Source: Cisco, 2011

Cisco OnPlus appliance discovers Cisco and third-party devices with an IP address connected to the network and displays them in topology and inventory views. Partners can access a real-time view of customer networks from anywhere, through a highly secure portal using a PC, tablet, or mobile device. VARs work with small businesses to define and customize alert thresholds. Through OnPlus, VARs can also provide small businesses with automated reports of all the activity and tasks performed on the network.

Pricing is $250 (approx.  $7 per month, after typical discounts), which includes a three-year OnPlus subscription and the network agent appliance that is installed at the customer site. The OnPlus service from Cisco is available now in U.S. and Canada, with a rollout in Europe and Asia planned for 2012.

Quick Take

Cisco OnPlus delivers cost-efficient scalable IT management and peace of mind that small businesses need without sacrificing the local VAR that many SMBs want to do business with. On the VAR side, it provides a fast, efficient way to onboard customers into a managed service practice, provide more proactive services, and provide more efficient service to more small businesses customers.  With the advantages, Cisco OnPlus should be very attractive to Cisco VARs and enable Cisco to make significant inroads in the small business segment.

That said, Cisco OnPlus can significantly strengthen its story by:

• Offering additional functionality in the areas of IT asset utilization and management (both hardware and software) to support compliance
• Providing additional performance management solutions
• Making it an extensible solution so that VARs can easily add additional value-added solutions like remote backup, Infrastructure on-demand, and business continuity services
• Help VARs position and demonstrate the value of OnPlus as a comprehensive IT infrastructure management solutions vs. a network management solution
• Investing in demand generation marketing to educate small businesses about the benefits of managed services

However, Cisco continues to invest in and develop solutions for small business, and OnPlus provides strong evidence that Cisco understands both small business pain points and how to create solutions that provide clear benefits to its partners. Cisco’s OnPlus should be a big step forward in helping Cisco VARs to move beyond the role of network product suppliers to become more strategic managed service providers.

1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets
2. The SMB Progressive Class Gains Ground
3. The SMB Social Media Divide Grows
4. Cloud Becomes the New Normal
5. Mobile Application Use Extends Beyond Email to Business Applications
6. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate
7. Managed Services Meet Mobile
8. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions
9. Increased Adoption of Collaboration and Communication Services in Integrated Suites
10. The IT Channel Continues to Shape-Shift

For the more detailed text version, see our 2012 Top 10 SMB Technology Market Predictions.

For a look back on 2011 trends, see Report Card: 2011 Top 10 SMB Technology Market Predictions.

Here are the SMB Group’s Top 10 SMB Technology Predictions for 2012! A more detailed description of each follows below.

1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets
2. The SMB Progressive Class Gains Ground
3. The SMB Social Media Divide Grows
4. Cloud Becomes the New Normal
5. Mobile Application Use Extends Beyond Email to Business Applications
6. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate
7. Managed Services Meet Mobile
8. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions
9. Increased Adoption of Collaboration and Communication Services in Integrated Suites
10. The IT Channel Continues to Shape-Shift

2012 Top 10 SMB Technology Market Predictions in Detail

1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets. After the Great Recession officially ended in 2009, the U.S. economy resumed moderate economic growth in 2010—and the SMB outlook for 2011 became fairly bullish. But new economic worries and uncertainties are dampening some SMB outlook. Our 2011 SMB Routes to Market Studyindicated that SMBs are less confident about their revenue prospects for 2012: 56% of small and 63% of medium businesses are forecasting revenue growth for 2012, compared to the 77% of both small and medium businesses that forecasted growth for 2011. And many SMBs are tightening their tech wallets: More are forecasting flat or decreased IT spending for 2012 compared to 2011. To loosen the purse strings, tech vendors must deliver a rock-solid case for how their solutions help address top SMB challenges—which are to attract new customers, grow revenues and maintain profitability. In addition to broadening subscription-based cloud solution options (which offload big upfront investments), more vendors will offer flexible, alternative financing to help ease the financial burden—and gain a leg up on competitors.
2. The SMB Progressive Class Gains Ground.That said, we also see a distinct category of SMBs that we are terming “Progressive SMBs.” Despite economic uncertainties, Progressive SMBs plan to increase IT spending. These SMBs see technology as a vital tool for business transformation, a mechanism to create market advantage and a way to level the playing field against bigger companies. Although price is still a key factor for Progressive SMBs, they are more likely to rate other factors—such as easier to customize for my business, strong reputation and brand, and ability to provide local service and support—higher than other SMBs when making technology decisions, according to our 2011 SMB Routes to Market Study. Progressive SMBs invest more in technology and see the results in terms of higher revenue expectations. For instance, 73% of medium businesses that are investing more in technology anticipate revenue increases in 2012, compared to just 17% among those decreasing IT spending. Technology vendors need to develop different marketing campaigns and more sophisticated solutions for Progressive SMBs than for their counterparts to win in this very important segment.
3. The SMB Social Media Divide Grows. SMB use of social media is rising. According to our 2011 Impact of Social Business in Small and Medium Business Study, about 50% of SMBs already use social media, and another 25% plan to do so within the next 12 months. The study revealed that about half of SMBs take a strategic and structured approach with social media. These “strategically social” companies use social media for more activities, use more channels and are more satisfied with the business results than the other half of SMBs that are still throwing spaghetti on the Facebook wall. These more informal, ad hoc users say that they don’t have enough time to use social media effectively; they can’t decide what social media strategies and tools will work best; it’s too difficult to integrate social media with sales, marketing, service and other business processes; and they are unable to measure value from social media. As new social media tools—from crowd-sourced pricing to video commerce—take shape, SMB social media “haves” will gain business ground on the “have-nots” in an exponential manner. As the have-nots lose ground, they will clamor for better social media guidance and easier-to-use, better integrated and more affordable social media management solutions.
4. Cloud Becomes the New Normal. Is the cloud perfect? No. Is it right for every solution and every business? No. But that said, the rate and pace of technological change are in overdrive, and the need for businesses to harness new technology-based solutions—social, mobile, analytics, etc.—to maintain a business edge is rising. Our 2011 SMB Routes to Market Studyresults reveal that demand for cloud-based solutions is accelerating in almost all solution areas. For instance, in the past 24 months, only 7% of small businesses purchased or upgraded cloud accounting/ERP solutions, compared with 13% that plan to purchase them in the next 12 months. Areas that show the biggest potential for cloud gains in 2012 are marketing automation, business intelligence/analytics, and desktop virtualization solutions and services. Most SMBs simply don’t have the staff, expertise or capital budgets needed for do-it-yourself IT—and they can’t afford the time it takes to get business payback from a solution that they need to vet, buy, install and deploy in-house. This makes the arguments for cloud computing—reduced capital costs, speed to deploy, and real-time collaboration and visibility—compelling. Demand for anytime, anywhere, any-device mobile access to applications will also accelerate cloud adoption, as many SMBs will want to offload management of mobile applications to a cloud solutions provider too. Enterprise players such as Oracle (with RightNow) and SAP (with SuccessFactors) have already begun their cloud shopping sprees. Look for traditional SMB vendors (Intuit, Microsoft, Sage, etc.) to join in the fun.
5. Mobile Application Use Extends Beyond Email to Business Applications. In a custom study we completed this summer, SMBs indicated that they plan to significantly increase spending on mobile devices and services in the next 12 months, with the highest jump in the 5-to-49–employee size band. The study revealed that with mobile use of collaboration apps (email, calendar, etc.) now mainstream, SMBs are mobilizing business applications. Some of the strongest categories for SMB current and planned mobile app use are mobile payments (52%), time management (59%), field service (59%), and customer information management (69%). This rapid uptake will also include more vertical apps that are a perfect fit for industry-specific needs, especially given the choice of both smart phone and tablet (read: iPad) form factors. Unfortunately, our crystal ball is cloudy when it comes to predicting if another vendor will be able to give Apple a run for its money in the business-use tablet market.
6. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate.According to our 2011 SMB Routes to Market Study, 16% of small and 29% of medium businesses purchased/upgraded a BI solution within the past 24 months, and 16% and 28%, respectively, plan to do so in the next 12 months. The social-mobile-cloud triumvirate will fuel new and increased SMB investments in this area as businesses try to plow through the growing data avalanche to get to the insights they need to grow their businesses. As SMBs try to get a better handle on customers’ and prospects’ opinions and influence networks, interest in sentiment analysis and social graphing solutions will grow. New mobile access capabilities and applications from BI vendors designed to provide SMBs with just the information they need, when and where they need it, will spur interest as well. Finally, our study indicated that roughly a third of SMBs use or plan to use cloud-based BI and analytics solutions. An expanding array of cloud options in this area will make it easier and more affordable for more SMBs to deploy these solutions.
7. Managed Services Meet Mobile.Despite momentum toward the cloud, it will continue to be a hybrid world for a very long time. Many SMBs will continue to use existing on-premises apps and choose on-premises deployment as security, regulatory or other needs dictate. So most SMBs will continue to grapple with IT infrastructure management—even as new mobile device management and governance challenges grow. SMB adoption of mobile phones and tablets is now on par with that of traditional landline phones, according to our 2011 SMB Collaboration and Communication Study. With employees more likely to lose a smart phone than a laptop, security issues abound and will only increase. The “bring your own device” (BYOD) phenomenon creates additional concerns, not least of which is to create a firewall between personal and business data. These SMB challenges provide ample opportunity for wireless carriers, networking vendors, MSPs and others that can provide integrated and automated managed services. These are likely to include services that encompass management of cloud-based infrastructure and all end-point devices, from desktop PCs, tablets and smart phones to purpose-built mobile devices; network services to reduce downtime and help optimize the network that mobile access relies on; and support for cloud-based dual-persona solutions on personal mobile devices.
8. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions.As unemployment has increased, so has the number of freelancers, contractors, independent consultants and others choosing to go it alone. According to the U.S. Census Bureau, small businesses without a payroll make up more than 70% of America’s 27 million companies, with annual sales of $887 billion. Many entrepreneurs never intended to take this path, but stay solo because they prefer it to going back to the corporate payroll. Others stick it out due to limited employment options. Either way, more accidental entrepreneurs view what they’re doing as a long-term business venture instead of a short-term stopgap. As a result, they see themselves more as business owners than as freelancers or contractors. But many have no intention or desire to hire employees. This will spike demand for—and growth of—applications and services that help them to achieve their business goals without adding employees. Traditional small business powerhouses (Intuit, Sage, etc.), pioneers in the SOHO space (FreshBooks, Shoebox, Zoho, etc.), new start-ups and others will increasingly cater to their needs with solutions that make it easier for them to fly solo—whether from a home office or on the go.
9. Increased Adoption of Collaboration and Communication Services in Integrated Suites. As evidenced in our 2011 SMB Collaboration and Communication Study, the SMB pendulum is swinging from point solutions for voice, communications, social media and collaboration solutions to integrated suites. Medium businesses are leading the charge, with 28% currently using an integrated collaboration suite, and 35% planning to do so in the next 12 months. Small businesses are slower to make this leap, but a transition is under way here too. By moving from disparate point solutions to an integrated offering, SMBs can avoid the hassles of learning to use multiple user interfaces, going to different sites to login and remembering different passwords—in short, things that waste time and frustrate users. They also can lower costs and improve their ability to collaborate effectively. A growing roster of low-cost (or free), easy-to-use integrated collaboration suites (Google Apps, Microsoft Office 365, IBM LotusLive and HyperOffice, to name a few) are adding fuel to the convergence fire—although vendors will still need to address the obstacle of user resistance to learning something new.
10. The IT Channel Continues to Shape-Shift. The trend triumvirate—cloud, social and mobile—is also reshaping the IT channel. These trends are moving the goal posts and changing the ways in which channel partners add value. Cloud computing reduces the need for hardware, software and infrastructure deployment skills, and ups the ante for educational guidance, business process transformation and integration skills. Re-imagined channel partner programs from vendors such as Intacct and IBM’s Software Group have blossomed as they shift partner rewards to focus more on value-add and renewals. Meanwhile, non-traditional IT partners, such as creative and marketing agencies, have stepped in to fill a gap by providing social media and digital marketing services for solutions such as Radian6 and HubSpot. In the mobile domain, partners will need to bring more value to help SMBs develop and implement mobile strategies, and offer solutions to manage mobile devices and applications and provide better network performance, reliability and redundancy. As with any significant inflection point, the cloud-social-mobile trend necessitates that older partner models continue to move aside as new, more relevant ones take shape.

For more information, please visit the SMB Groupweb site at http://www.smb-gr.com, contact us at (508)410-3562 or send an e-mail to information@smb-gr.com

 Before developing our 2012 predictions, we wanted to assess how we did on our Top 10 SMB Technology Predictions for 2011.  Here’s our take on how we did–let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2012 which we will post in a few days!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

If you’re interested in any of the above SMB market studies, we are offering special end-of-year discounts on these studies. Click here for more details.

• Top Business Challenges
• Collaboration Culture
• How Collaboration Culture Affects Corporate Performance
• Reliance on and Satisfaction with Collaboration Tools
• Collaboration Budgets
• Adoption and Plans for Integrated Collaboration Platforms
• Top 3 Collaboration Platforms Selected by SMBs
• Top Reasons to Select a Specific Integrated Collaboration Solution
• Top Reasons for No Plans to Use an Integrated Collaboration Platform

Click here for more information about the complete study results and how to order.

This study was a refresh of our 2010 SMB Routes to Market Study. In both years, we asked customers, “Do you use/plan to use business app stores or marketplaces (e.g. Salesforce AppExchange, Intuit Workplace, etc.)?” As shown below (Figure 1), 28% of small businesses are using app stores. The good news is that this is up from 23% last year.

Figure 1: Small Business Use and Plans: Business App Stores and Marketplaces

This year, we also asked respondents how frequently they use app stores. As you can see, only 6% of small businesses use them on a regular basis–which pales in comparison to the 42% that use search engines regularly–and also falls far short compared to sources such as email newsletters; colleagues, friends and family; vendor web sites, and Facebook–among other things.

In this 2011 survey, 17% medium businesses (100-999 employees) indicated that they use app stores on a regular basis, which may mean that as businesses get larger, and their integration requirements increase, app stores provide more value.

Source: SMB Group 2011 (click to enlarge)

App stores focused on the needs of small and medium businesses (SMBs) have been proliferating quickly. Some of the SMB-focused app stores that have set up shop include:

• Intuit’s Workplace App Center, which provides a central location where small businesses can locate and try business applications that work with QuickBooks and with each other.
• Google Apps Marketplace, which offers Google users apps that integrate directly with Google Apps.
• Zoho’s Marketplace, which provides applications that work with Zoho’s solutions.
• Constant Contact Marketplace, which offers small businesses with applications that integrate with Constant Contact’s email and marketing tools.
• GetApp.com, which, unlike most app marketplaces, isn’t organized around a core application or platform, but positions itself as a neutral, “meta-marketplace” that is application and platform agnostic.

There are also many business app stores that aren’t exclusively focused on SMBs, but feature plenty of apps relevant to SMB requirements, such Salesforce.com’s AppExchange and Sugar CRM’s SugarExchange. 

Theoretically, these sites should make it easier for users to find, try, evaluate and purchase applications. But our study analysis suggests that app stores will need to do more to live up to their promise of becoming a premier and potentially disruptive SMB information and purchase channel.

Brent Leary:  We’re really excited to talk to Ron Kline, director of marketing for IBM’s midmarket division. Ron, before we jump into the Smarter Commerce Imitative, IBM has been doing so much around this whole idea of a Smarter Planet, can you talk a little bit about the big picture of the Smarter Planet initiative.

Ron Kline:  Sure. What we mean by Smarter Planet is that the world we live in is becoming smarter. Everything around us is becoming more and more instrumented, and that allows us to measure really almost anything.

Think about it: there are over a billion transistors for every person on the planet. Over 30 billion RFID tags are embedded across the supply chain around the world. Everything is becoming instrumented.  Supply chains, health care networks, even natural systems like our rivers.  As a result of being able to measure and instrument from various touch points, the world becomes much more inter-connected and intelligent. By measuring and connect this information, you can build a more intelligent planet – one that can respond much more quickly to change.

Take an example like in San Francisco where they’ve launched a parking system so you can see what parking spaces are available throughout the city and determine where there is an open place to park. I actually have this app on my iPhone now. With the next step, you’ll be able to pay for your parking using your smartphone as the payment device.

Sanjeev Aggarwal:  Thanks Ron. So what is Smarter Commerce, and how does it fit into the bigger Smarter Planter picture?

Ron Kline:  Smarter Commerce is about how we deliver the customer experience using all of the insights that we are gaining about our clients and supply chain to provide a much better customer experience.

For example, you used to just go out and buy a car, or a company would just order parts from a supplier. But as consumers got more information at their fingertips, they could start to get price comparisons online and hear what other people had to say about a particular product before they go shop. Things have quickly moved on to include people sharing information and opinions on social networking sites and blogs.

Smarter Commerce helps you maximize the insight that you generate through customer interactions, whether in the store, over the web, from smart devices – what is being said out in social communities and taking that insight and pulling it together to improve the customer experience. Then you can tailor your offerings to what a customer is interested in.  You can improve profitability by targeting the right offerings to the right customer at the right time, or by reducing the cost of returns, restocking, and supply chain expense by having to handle reverse logistics because you just didn’t know what the customer was looking for. The bottom line is improving the overall customer experience and living up to customer expectations.

We sort that into four big buckets, but it all comes down to customer experience. It’s the marketing, how do I target and personalize my marketing?  Yes, to get better yield out of my marketing dollar but really to have a better experience for my customers – so that I am providing relevant, targeted, offerings or information. Then, how do I manage that whole sales process, fulfillment across stores, the web, social sites. And customer service has to span all of the touch points. It’s not enough to have a customer service department anymore, customer service is something that a client experiences when he is buying a product or shopping for a product and when he is looking for additional service. On the internal side,  how do I control the procurement of goods and source the goods. I can have a smarter procurement process and a smarter supply chain process only if I know really more about my customer.

Brent Leary:  Talk a little bit about who should care about Smarter Commerce in an organization and why they should care about it.

Ron Kline:  Well, the customers care about it, so therefore, all of us as businesses need to care about it.  It’s something that any business of any size really needs to focus on.  It’s just as important for small and midsize businesses to deliver a superior customer experience as it is for a large enterprise.  In fact, Smarter Commerce and Smarter Planet can help level the playing field for midsize companies. In this environment, it’s all about building a more loyal customer, understanding that customer better, and then being able to deliver a better experience.

Sanjeev Aggarwal:  Can you give us an example of how a midsize company is using Smarter Commerce today and what type of results they are achieving?

Ron Kline:  Sure. One example I find pretty interesting is Elie Tahari, a high fashion clothing designer and retailer. Nobody is more focused on appealing to the tastes and the emotions of their customers, but those tastes can change very quickly and a manufacturer who is caught with too much of yesterday’s style has got a lot of money tied up in inventory that is out of date.

Elie Tahari implemented an IBM Cognos solution that allows them to have a unified view of all of the information available from their different systems to make better decisions about what the market is saying and what specific customer needs are.

So now, instead of following what was a typical practice in the retailing industry–sending stores the same distribution of sizes based on historical information across the country–Elie Tahari has insight from their customer data for each particular store over a period of time. They can say, the distribution looks a little different over here, and distribute accordingly. It’s a better customer experience because the chances of being out of stock had been reduced. It saves money on costs of returns or discounting to try to move product that is not selling, either because you don’t have the right style in stock or you have to return it back to the parent company because you ordered too many of one size. This has enabled them to improve the customer experience, and on the supply chain side, they don’t end up with too much of the wrong type of thing.

Another example is BJU Press, a publisher in the United States that provides home schooling materials for kids in the K-12 age group.  They have developed a web store front end with an IBM partner, CrossView, using WebSphere Commerce, and Coremetrics, a web analytics application. Now they can provide customers with an easier online experience to search for products, continually improve that search experience.

In both cases, IBM and its patterns were able to not only improve the customer experience, but also the economics for the company as well.

Brent Leary:  Ron, those are some great examples, but how is IBM making Smarter Commerce accessible to the SMB market?

Ron Kline:  In fact, the examples that I gave you are midsize companies. They have the same pain points as larger companies; they just haven’t had the ability to address it in the past because a lot of the technology and solutions were out of reach.

IBM has bridged that gap in a of couple ways.  One way is to provide offerings that are built and designed for the midmarket.  We have a process in IBM to insure that the offerings that we bring to market for this customer segment are built and priced appropriately for midsize companies.  An example, Unica Email Optimization [OnDemand] Solution is $1,500 a month for running up to twenty-five events.  It’s very a very affordable solution with a lot of really great technology in it.  Unica Marketing Operations [OnDemand] is another one, marketing operations on demand is $6,000 per year for up to ten seats.  These are very much within the range of a midsize company, and provide the kind of analytics and insights that help a company deliver this Smarter Commerce experience.

We’ve also learned that customers are looking for local trusted advisors and that’s where IBM’s investment in a very large partner ecosystem has helped bring the IBM technology to these midsize companies through local business partners.

Sanjeev Aggarwal:  How does an SMB that wants to learn more about this get started?

Ron Kline:  Absolutely, first of all, you can talk to your local business partner because they are the trusted advisor for you there locally.  At www.IBM.com/smartercommerce you can learn about what Smarted Commerce is and get a bigger picture view of what other customers are doing in this area and how they are benefiting, and of course, what our offerings are.

Brent Leary:  Ron thanks so much for your time today and explaining what Smarter Commerce is all about, thanks again.

Ron Kline:  My pleasure, thank you very much.

This is the third of a six-part blog series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions. In our next post, we’ll talk about how Speedo International is serving smarter customers with Smarter Commerce solutions. In the meantime, please share with us the successes you’ve had and the challenges you face in adapting your business to better serve smarter customers.