SAP’s Big Bet on SMBs—With a Fast Growth, Millenial Twist

sapEarlier this week, I had the opportunity to meet with Kevin Gilroy, SAP’s Senior VP and GM for Global Small and Midsize Enterprise Segment & Indirect Channels to hear about SAP’s plans to go big in the small and medium business market, which SAP refers to as small and medium enterprises (SMEs). In a nutshell, the vendor is dramatically ramping up market, channel and solution initiatives to boost its profile and market share in SME.

These initiatives come with an interesting twist. Much of what SAP intends to do in the SME space will focus on recruiting partners—from both developer and VAR ranks—who can provide start-up millennial businesses with next generation solutions to help them grow at lightening speed.

The company claims that it is coming at this from a position of strength, with 80% of its 253,000 customers coming from the  SME ranks. But, SAP’s defines SMEs, as companies with revenues under $1 billion, which skews larger than how most vendors and analysts define it. So what shape will SAP’s new SME initiatives take?

Sharpening the SME Lens

telescopeTo put things in context, SAP’s courtship of SME isn’t new. As I discussed in Top SMB Takeaways: SAP Sapphire 2013, SAP has been sharpening its SME lens for a while. Last year, the vendor announced several new programs to bring the benefits of HANA’s data-crunching power to SMEs,  provide customers with the choice of running its solutions in public, private or hybrid cloud environments, and to make its solutions easier to buy and use.

As I noted in that post, SAP was focusing these initiatives not at the SME masses, but on high-growth SMEs, which SMB Group call Progressive SMBs. Progressive SMBs are growth driven, and more likely to invest in and use technology to gain market and competitive advantage than other SMBs. Our data shows that Progressive SMBs are also much more likely to anticipate revenue gains than peers whose tech investments are flat or declining.

Now, SAP is further sharpening the lens to zero in on millennials that are starting, running and making decisions in SME companies. According to Gilroy, millenials have a different view on technology than older counterparts. They are more comfortable with technology, and more likely to view it as a growth engine, instead of as a cost-cutter.

With a broad portfolio of cloud, mobile, analytics, ecommerce, talent management and ERP solutions, SAP offers many entry points for  these SMEs. The vendor has made some key acquisitions, including Ariba for ecommerce, and Success Factors for talent management, that broaden its footprint in the born on the cloud solution space. SAP has also introduced cloud-based options for many of its traditional on-premises solutions, such as SAP Business One. SMEs often prefer cloud solutions because they can usually be deployed faster, with less technical expertise and without big upfront capital expenditures, paving they way for SAP and its partners to expand their addressable market.

Furthermore, SAP is infusing HANA into its SME offerings, announcing general availability of the 9.0 version of the SAP® Business One application, version for SAP HANA. This is the first business management solution for SMEs running on SAP’s in-memory HANA computing platform. It enables SMEs to analyze structured and unstructured information within seconds instead of days, and use predictive analytics to gain new insights into data and optimize business decision-making.

Powering Up Partner Programs

1-hands-holding-jigsawSAP is powering up partner recruitment to fuel SME expansion. The vendor recruited 500 partners in 2013, growing the partner base to more than 11,500 worldwide, with about 1,000 in the U.S. Gilroy indicated that SAP is planning for double-digit channel growth, but will take a selective recruiting tack. In addition to looking for partners with a next-generation development vision, such as Liquid Analytics, SAP wants partners that are ready to scale their businesses to keep pace with SAP’s double-digit growth in SME.

The vendor has introduced and refreshed several programs to help partners go to market more effectively, including:

  • SAP Marketing University, a free, foundational marketing program to empower partners with the marketing skills they need to grow their businesses. SAP indicates the program has already led to over $1 billion in lead generation activities. Once partners have gone through the program, SAP provides them with the same marketing assets that are available to its internal marketing and sales teams.
  • Partner involvement in SAP’s Run Like Never Before ad campaign, launched in October of 2013. To data, more than 200 partners have taken executed campaigns as part of this program, which is 100% MDF reimbursable.
  • New “buy now, pay later” SME financing options that give SMEs zero-percent financing for up to 24 months for the purchase of any SAP product on the reseller price list.

Perspective

We’ve all seen how quickly innovative, fast-growth SMEs can become marquee brands, from tech sector stars such as LinkedIn to consumer brands such as Green Mountain coffee . SAP sees this too—and that technology is putting the creation-destruction cycle for businesses in hyper-drive.

So SAP’s big bet on becoming the leading IT solutions provider for these high-growth SMEs makes sense. As important, SAP is making an authentic effort to consumerize the SAP experience by reducing friction in choosing, buying and using SAP solutions.

But in this noisy SME space, crowded with competitors coveting the same high-growth SMEs, SAP still needs to do more to dispel the long-standing myth that SAP is only a big business brand. Although SAP solutions may be a good fit for high-growth SMEs, the vendor isn’t a household name with them or the millenials that its is seeking out.

SAP will also need to be cautious not to overplay the millennial hand. While millenials are likely to be more digitally savvy than older generations, the U.S. Small Business Administration says that self-employment among younger age groups has actually been dropping. From 2005 to 2010, self-employment among indi­viduals age 25 and under decreased 19 percent, compared to a 7 percent drop in the overall population. In reality, self-employment rates increase with age. For example, they were 2 percent for those 25 and under and 23 percent for those 65 and over in 2010. Simply stated, while millenials may prove to apply technology in business in more innovative ways, they are a relatively small part of the entrepreneurial population.

However, SAP is moving in the right direction. As it increases its investment to understand and engage with SMEs, SAP can continue to fine-tune its SMB story, and widen the circle of high-growth SMEs that will hear it and relate to it.

Big Data for the Little Guy

Originally published on November, 2013 on QBSBDC.com as the third of four blog posts in a series designed to help small businesses, and those that serve them, be successful.

Big data is a big buzzword–and for a good reason. We’ve already created 2.5 quintillion bytes of data – 90% in the last two years. 72 hours of video are uploaded to YouTube every minute. 160 million emails are sent every 60 seconds and 58 million tweets are sent each day.

Stock Market Background

Of course, most small businesses don’t need to understand and manage these boggling amounts of data. But small businesses do need to effectively find, measure and take action on the data that is important for running their businesses.

In other words, the “big” in Big Data is relative. If you’re having problems finding the data you need, when you need it, you have a big data problem! Lack of vision into what’s going on in the business can lead to missed opportunities and the inability to spot problems.

In the 2012 SMB Routes to Market Study, the SMB Group found small business use of analytics is low, but early adopters gain big advantages. Key benefits cited in the study were better answers to critical business questions, deeper understanding of customers and market trends, and the ability to identify and capitalize on opportunities while avoiding risk, just to name a few.

“I am always looking to improve my business based on what is going on in the industry, and the Trends feature in QuickBooks Online helps me do that,” said Michael Brewington, president of Arion Systems, Inc. “I can get a better understanding of my accounts receivables and payables versus other companies. That makes my business more competitive.”

analytics stat from smb group

Top Tips for Getting Smart About Your Data

What options exist for small business owners who want big business analytics capabilities? The SMB Group recommends small business owners ask themselves three questions before getting started:

  1. What information do you need to understand and measure?
  2. Where is the data and how much do you need to analyze?
  3. Who needs to use the data?

In addition to understanding what needs to be measured, small businesses should assess capabilities required to make data actionable for users. For example, do you require a solution with an easy to use interface or customized reporting? Starting with a focus on making data actionable will help ensure you maximize effectiveness once the solution is in place.

Something Old, Something New

There’s a chance your current solutions already include some form of analytics. Look into how well these tools support your needs, and integrate new analytics solutions to add more horsepower.

For example, the Trends tool included with Intuit’s QuickBooks Online product displays average sales growth, cash flow, income and expenses of small businesses within a specific industry or location to allow small business owners to compare themselves to similar businesses and make informed decisions. Trends figures are compiled from anonymized data submitted by 1.3 million QuickBooks users.

“I’ve been using the Trends feature in QuickBooks Online to see how my Oracle PeopleSoft consulting firm’s expenses compare to others in the industry,” Mr. Brewington said. “I can easily recognize if I need to continue to increase my profit margins and reduce costs to stay competitive. Trends makes it easy to stay aware of what is going on in the industry.”

Once you identify your analytics needs and any gaps in coverage, you can determine if you can implement a do-it-yourself analytics program or whether you need external resources to get the reporting you need.

Blog written by Laurie McCabe, who brings more than 20 years of experience in the IT industry to her role as co-founder and partner at SMB Group. Laurie has built widespread recognition for her capabilities and insights in the small and medium business (SMB) market in several areas, including cloud computing, mobile solutions, business solutions, social networking and collaboration, and managed services.

SMBs and Analytics: What Don’t You Know?

stock-photo-information-overload-concept-of-becoming-overtaxed-by-the-growing-flood-of-information-which-can-101476243SMB Group is planning to launch the 2013 SMB Analytics and Big Data Study this fall. We decided to develop this survey study because even though “big data” is the latest “big thing” in the IT industry, we see a scarcity of quantitative information about where small and medium businesses (SMBs) are on the analytics and big data learning curve.

At the same time, big data and analytics vendors are making enormous investments to develop and market analytics and big data solutions for SMBs. While there’s no question that analytics and big data solutions can benefit SMBs, vendors need a sharper picture of how SMBs view, think about and consume (or not!) analytics solutions in their organizations in order to successfully reach and serve these businesses.

What We Know

We learned in our 2012 SMB Routes to Market Study that SMBs are all over the map when it comes to using  analytics in their businesses. While about 41% of SMBs use analytics solutions, the kinds of solutions they use range from modules that are part of a business solution (such as CRM or ERP) to advanced analytics solutions such as SAS, IBM Cognos or Tableau. The other 59% are getting by with Excel and other homegrown analytics tools.

Slide1We also know that the cloud is on its way to becoming SMBs’ preferred deployment method for analytics and business intelligence solutions. Our survey results indicate that among SMBs that deployed analytics and BI solutions over the past two years, 31% SMBs chose to deploy a cloud-based solution. Looking ahead, 53% of SMBs planning to deploy an analytics solutions believe they will select a cloud offering.

Over the last few months, SMB Group has also been involved in different qualitative projects to understand how SMBs are using advanced analytics in their businesses. We’ve interviewed many early adopter SMBs about why they decided to step up from homegrown Excel spreadsheets to more advanced analytics solutions, and I’ve shared a their experiences in the posts noted at the end of this post.

What We Don’t Know Enough About–Yet!

The SMB Group’s 2013 SMB Analytics and Big Data Study will drill down to more comprehensively understand and gain quantitative metrics about SMB decision makers’ attitudes and practices regarding analytics and big data. It will answer questions that we have yet to see strong, quantifiable answers to, including:

  •  SMBs’ views and understanding of big data, analytics, and related terms.
  • Drivers and inhibitors for analytics solutions.
  • Whether, how and how quickly SMBs’ are transforming their businesses for a data-driven world.
  • Current use of analytics for business decision-making in different departments and across the business.
  • Who creates and who consumes analytics?
  • What are they using it for and how do they consume it?
  • What are SMBs’ appetite, readiness and budget to adopt more advanced solutions than what they are using today?
  • What internal expertise do they have available to help with solution selection, implementation, integration, business process, etc.?
  • What do they need external resources for?

What Do You Need Answers To?

all of the infoWe also know that we haven’t thought of all the questions that need answers. So we’d love for you to be one of our survey sponsors, of course, and work with us one-on-one to help further define the questions and scope of this study.

Even if you’re not able to sponsor the study, we’re still very interested in finding out what questions you think we should try to answer in this study. Please take a moment and share your ideas in the comments section. Thank you!

Recent related SMB Analytics and Big Data posts:

Seeing the Light: How SMBs Are Using Data and Insights to Get Ahead

Key Considerations: How SMBs Are Using Data and Insights to Get Ahead

Getting Results: How SMBs are Using Data and Insights to Get Ahead

Is Big Data Relevant for SMBs?

Putting Big Data To Work For SMBs

Charting Your Big Data Journey

How Zoos and Museums Use Big Data to Refresh and Reset Visitor Experience

 

 

How Zoos and Museums Use Big Data to Refresh and Reset Visitor Experience

3-kids_mFor most of us, a trip to the zoo, museum or an aquarium is a fun and interesting way to learn about animals, history, art and other cultural experiences first hand. Behind the scenes, however, these organizations must work hard to create the engaging, interactive experiences that today’s visitors want, and successfully market that experience to the public.

This is especially true today, when these typically not-for-profit venues must compete with an expanding array of theme and amusement parks, live and digital entertainment events and sports attractions. To remain viable and vibrant, zoos and museums must continually fine-tune their vision and exhibits to grow visitor traffic and membership. They need to be creative with concessions, and optimize use of their meeting rooms and cafes.

In this post, I discuss how Point Defiance Zoo & Aquarium and History Colorado Museum are using analytics and big data to better understand what visitors want and to deliver it.

Point Defiance Zoo & Aquarium Refreshes Visitor Engagement and Conservation Initiatives

polar-bear-003_sAt the 100-year old Point Defiance Zoo & Aquarium (PDZA) in the Pacific Northwest, Manager Donna Powell oversees all business, budget and visitor services. The 29-acre combined zoo and aquarium promotes and practices wildlife and ecosystem conservation initiatives, and attracts more than 600,000 visitors a year.

PDZA generates millions of data records daily on attendance, exhibit and event preferences and participation in conservation initiatives—but didn’t have a good way to pull information out of it. As Powell explained, “Staff generated a SQL sales report from our point-of-sale (POS) system each morning but it only gave us turnstile sales and didn’t include online and reseller sales. So staff had to pull this all together manually, which took days.”

“It also couldn’t tell us what customers do while they visit, or what they’re saying about us on social media” adds Powell. “We need to know things like, which exhibits visitors prefer, and what conservation initiatives they’re participating in, what they liked and what they didn’t like.”

Powell knew that PDZA needed to better understand visitor trends and feedback, but had concerns that an analytics solution might be too difficult and/or expensive for an 80-person organization with 2 IT staff to deploy and use. Then she attended a presentation from the Cincinnati Zoo, and learned about the analytics system that they had deployed. “They were using the same POS as we use. They introduced us to BrightStar Partners an analytics solution provider that did their implementation that really understands zoos. The light bulb went on—if they could do it, so could we.”

PDZA went live withIBM Big Data Analytics in 2012. “Everyone immediately made the connection of how they could use this to help. We can strip things out, and see how things relate. Now we can pinpoint how different weather patterns will affect attendance and exhibits, and change scheduling as required. We can also use it for marketing. For example, after analyzing sales data and open rates, we sent a promotion to members whose membership was about expire and offered them a discount if they renewed before the end of the day. We had a 6% buy in on that campaign compared to the typical mail renewal rate of 3%.”

Other benefits Powell points to include:

  • A 700% rise in online ticket sales over the past year, with an expectation that online sales will go up another 25% by the end of this year.
  • The membership team can pull the data they need in minutes instead of waiting days for IT to extract data from the POS system to create a mailing list for campaigns.
  • PDZA also uses social media and analytics to more effectively engage millennial visitors in its conservation initiatives.

Zoo employees now use iPads to access financial, attendance, membership and retail information so they can make decisions anywhere anytime. Looking ahead, PDZA plans to introduce a mobile ticketing solution. In the future, visitors will be able to “check in” at different areas within the zoo, providing zoo managers with more data to better understand which exhibits are most popular and how much time visitors spend at them.

History Colorado Center Resets To Attract a New Target Audience

HistColorado_FrankOomsHistory Colorado Center likes to think of itself as a brand new 134 year-old museum. Founded in 1879, the museum had shared the same block with Colorado’s State Justice Center for more than 40 years. “The location wasn’t ideal, and the museum wasn’t as interactive or engaging as we would have liked,” as COO Kathryn Hill explained. “Most of our visitors were senior citizens and children on obligatory school field trips.”

In 2008, History Colorado had the opportunity to build new, state-of-the art museum–and to bring Colorado’s history alive through storytelling and interpretative exhibits. According to Hill, “We wanted to understand how we could bring history alive, attract more families, and best sustain our mission over time.”

In conjunction with planning and construction of the new building, History Colorado conducted extensive audience research to test design ideas and stories. During this process, Hill “stumbled on the story of how the Cincinnati Zoo was using analytics to drill down into all aspects of visitor behavior so they could continually improve the visitor experience.”

“As a non-profit, we don’t have a lot of money for marketing, so we needed to find a strategic way to keep a close pulse on how we can best engage families. We hadn’t budgeted for analytics, but once we learned about IBM’s BIg Data Analytics, it was a no-brainer for us,” according to Hill.

In collaboration with IBM Business partner BrightStar, History Colorado deployed IBM Big Data analytics simultaneously with their new POS system. “I’m not a tech person, but I can go in and look at admissions, programs, merchandise, food, and membership data in real-time,” notes Hill. “We have a single view of the data, and can see patterns now, such as when retail sales peak and what exhibits attract the most traffic.” This helps the Center’s 125 employees fine-tune exhibit and marketing strategies.

The museum is also developing more personalized experiences for its visitors by analyzing social media commentary, and expects that this will boost engagement and repeat visits.

“We have a unique mission to help visitors understand the present in the context of the past so Coloradans are better informed in making decisions for the future,” explains Hill. “To make this happen, we need to bring people in and provide a compelling experience. Analytics helps us do this.”

Perspective

Chances are that your organization isn’t a zoo or museum. But these stories underscore the fact that big data analytics solutions are within reach for organizations of all shapes and sizes.

However, these experiences also reveal some important pointers for getting successful outcomes from an analytics investment that other SMBs should keep in mind. First and foremost, PDZA and History Colorado had clearly articulated what information they needed, and how they would use it. In addition, both organizations:

  • Selected a solutions designed for SMB requirements and for limited IT and budgets.
  • Worked with a partner that had experience in your industry, and could tailor the solution to best meet their specific needs.
  • Had input and guidance from organizations with similar requirements.

Whether you need to know more about visitors or customers, exhibits or products, with a clear vision, solid planning, big data analytics can provide the insights your organization needs to thrive in an increasingly complex and competitive world.

This is a fourth, additional post in the blog series by SMB Group and sponsored by IBM that examines big data and its implications for SMBs. You can find the first three posts at these links:

Key Considerations: How SMBs Are Using Data and Insights to Get Ahead

?????????????????????????????????????????????????????????????????????????????In the first post in this series, Seeing the Light: How SMBs are Using Data and Insights to Get Ahead, I shared the motivations that prompted three SMBs (BGF Industries, Oberweis Dairy and Twiddy & Company) to replace spreadsheets and intuition with a more sophisticated, analytics-driven approach.

But what factors do you need to assess in order to select an analytics solution that will work best for your business? In this post, I examine the factors that these decision-makers view as make or break considerations to guide the analytics selection process and ultimately, drive successful outcomes.

What Information Do You Need to Understand and Measure?

As Albert Einstein, said, “The important thing is not to stop questioning.” After you’ve determined the business requirements you need to solve for, the next step is to identify the specific questions you need to answer to solve for these requirements. For instance:

  • Oberweis Dairy initially wanted to determine why customers were discontinuing home delivery service so it could get that business growing again. But the scope quickly broadened. According to Bruce Bedford, VP of Marketing, “We have three channels of business–home delivery, ice cream and dairy stores, and distribution partners. We realized we had to understand customer buying behaviors across these channels to answer questions such as, how do we increase revenue per transaction, improve customer retention, and increase market penetration.”
  • Twiddy & Co. needed to maximize occupancy and revenues for vacation homeowners while still providing an optimal vacation experience for its guests. As Clark Twiddy, Director of Operations explained, “We asked what do we want this solution to show us, and what would we do with it once we had it?” For instance, Twiddy wanted to be able to scan for safety related items so it could immediately dispatch resources to correct them. “We also wanted to track costs and performance in different vendor categories. “I wanted to know what the median cost is, for example, for carpet cleaning, what each vendor charges, and who does the best job–sort of like a private Angie’s list.”
  • BGF Industries had millions of lab testing records that it could use to improve quality control, but lacked an effective way to extract insights from them. Notes Bobby Hull, Corporate QA Manager,” We needed a system to quickly comb through all these records, generate control charts, and flag anything that might be an issue–before it becomes an issue for our customers. We also wanted to build a knowledge repository to make key findings readily available if an issue comes up again.’’

Where Will the Data Come From?

Most SMBs start with wanting to analyze internal company data. But odds are that corporate data is in different “silos,” such as an internal financials application and a cloud-based HR or CRM solution. Data silos are usually inconsistent, expensive to support and a source of contention in companies. Bringing siloed data together into an integrated data store is the foundation to build a “single version of the truth” to run reports, build dashboards, and create visual or mobile user interfaces.

BGF was fortunate. It had already built a data warehouse for its lab testing data when it decided it needed a more powerful analytics solution. But Twiddy and Oberweis faced a dilemma more common to SMBs. For example, “Our Ice Cream and Dairy Stores operate in a completely different IT environment than our Home Delivery and Wholesale businesses,” explained Bedford. “For timely, accurate reporting and analysis of cross-channel purchase behavior, we needed to start by bringing all of our consumer and inventory data together into a single data warehouse.”

Look for solution providers who can help consolidate and standardize data from different sources and formats to build an integrated, rationalized data store. This foundation will enable you to derive deeper insights, better metrics and the confidence you want from your data.

How Much Data Do You Need to Analyze?

Big data isn’t only applicable to large businesses. In fact, the “big” in big data is relative–relative to the amount of information that your organization needs to sift through to find the insights you need, when you need them.

BGF was storing over 5 million lab testing data points in a data warehouse. “Many of the solutions we looked at couldn’t handle the data volume, they would choke after a couple of million data points. We needed a solution to power through this with the speed we needed,” according to Hull.

Consider both current data volumes and what’s coming down the pike. Oberweis’ Bedford notes, “We wanted to start with market analysis, but knew that down the road that we would want also improve inventory management and gain more predictive inventory control, which would bring more data into the picture.”

It’s a safe bet that the volume and variety of digitized data relevant to your business will continue to rise exponentially. You may need to bring in new, unstructured data from company emails, from external sources such as social media, or machine generated data from processes that you automate.

Select a solution that will be ready when you need it to crunch through more data, from more places, more quickly. Analytics solutions that take advantage of new technologies, such as Hadoop and MapReduce make it possible to run analyses that used to take days or weeks in minutes, and to weave new, external data sources into your analysis as required.

How Do You Make Data Actionable?

To have value, data needs to be accessible, consumable and actionable. People must be able to interact with it, and get the information they need, when and how they need it, to perform their jobs most efficiently.

Consumability was top of mind for Twiddy & Co. “We wanted something that would not only help our executive team to make decisions, but also shape information that we could disseminate to front line managers and the field,” notes Twiddy. Executives needed planning and forecasting capabilities to help maximize occupancy for almost 1000 properties, and manage service costs among 1100 providers. “But we also needed to bring together information from different sources into one simple document for our cleaning crews who clean and inspect the homes. Our data challenges were often to make our complicated data systems clear, understandable, and most importantly actionable.”

BGF’s Hull required “a daily report of issues, divided by market segment, that segment managers could pull up and start taking actions on immediately.” BGF also wanted to augment control charts with commentary field to capture knowledge about how to resolve issues. “One of my mentors recently retired with 52 years of service. When someone like that logs something, you want to keep it and pass that knowledge on in case the issue comes up again.”

Get clarity around who needs to use the data and how. Is it executives, front line managers, people in the field–or all of the above? Business users may need visualization capabilities to make it easier to explore large amounts of data. Executives might want mobile solutions so that they have information at their fingertips at the airport. Get broad input from stakeholders upfront to deliver information in the most actionable format.

What Internal Capabilities Do You Have and What Help Will You Need?

Like most SMBs, these companies had small IT staffs, ranging from 2 to 4 full-time people. They had varying degrees of analytics expertise. Oberweis’ Bruce Bedford is a PhD and an analytics background. BGF’s Hull had experience with desktop analytics, but had to juggle his day job as Corporate Quality Assurance Manager while implementing a server-based solution. And Clark Twiddy had to help move the company off spreadsheets while fulfilling his duties as Director of Operations.

If you lack IT staff and/or in-house analytics expertise, select an experienced solution provider who can fill in the gaps with consulting, implementation, training and support services. Since analytics is major investment for most companies, and your requirements will evolve over time, look for a provider that will really listen to what you are trying to do, work with you to overcome internal challenges and constraints, and provide a solution that will grow with your business. “Don’t be over-confident about simply buying a solution…in hindsight, we should have purchased a training plan and initial setup consultant upfront. It would have saved a lot of time.”

Perspective

With all the hype surrounding analytics today, it’s easy to get derailed from your objectives by buzzwords and the next new feature. But you can stay on track if you remember that the end goal of all metrics, reports, dashboards, alerts or any other features that an analytics solution provides is to answer your business-critical questions.

Evaluating key questions at the front of the solution assessment cycle proved critical to enabling these SMBs to choose the analytics solutions and providers that would be the best fit for their companies.

If you take time upfront to lay the groundwork with a thorough internal assessment, you will dramatically increase the odds of selecting an analytics solution and solutions provider that will help you get the insights you need to grow the business and stay ahead of the competition.

In the third and final post of this series, I’ll look at how careful planning paid off for these three SMBs, and how they are using analytics to help their companies grow.

This is the second of a three-part blog series by SMB Group sponsored by SAS that examines why and how SMBs are moving from spreadsheets and intuition to a data-driven approach to grow their businesses.

Seeing the Light: How SMBs Are Using Data and Insights to Get Ahead

At a time when information is proliferating at an unprecedented rate, companies that effectively gather, create and use information can gain dramatic market advantages over those that don’t.  SMB Group’s 2012 Routes to Market Study shows that SMBs that have deployed business intelligence and analytics solutions are 51% more likely than peers to expect revenues to rise. Likewise, in a survey from the MIT Sloan Management Review and SAS Institute, 67% of respondents report that their companies get a competitive advantage through analytics.

Most small and medium business (SMB) decision-makers understand this at a conceptual level. But let’s face itfew have in-house business analysts and data experts. Consequently, it can be daunting just to think about moving beyond spreadsheets to a more innovative analytics-driven approach.

A Tale of Three SMBs

But it doesn’t have to be. In this three-part series, I explore the journeys that three SAS customerswithout armies of IT peoplehave taken to get more accurate, timely, usable insights for their businesses. And note: not one is a venture-backed tech or digital media start-up from Silicon Valley! In fact, all three are from traditional industries, with a combined 146 years of history behind them:

  • BGF Industries is a leading manufacturer of 2,000 high-performance Kevlar, fiberglass, and carbon products used in industries such as aerospace, marine, filtration, automotive, and ballistics. BGF was the first weaver of fiberglass textiles in 1941 when it was part of Burlington Glass Fabrics, and became a subsidiary of the Porcher Groupe of Badinieres, France in 1988. Today, BGF employs 800 people at six facilities in three states. With over 35 patents for specialized finishes and processes, BGF’s mission is to deliver excellent products and exceptional customer experience.
  • Oberweis Dairy began in 1915, when Peter J. Oberweis had too much milk and started selling it to neighbors. The Oberweis family began delivering fresh milk to homes on horse-drawn carts in 1927. Now, Oberweis continues its “Simply the Best” tradition as a family owned and operated business in Aurora, IL. Oberweis has also significantly expanded its product line, and opened 47 retail stores where customers can buy milk and enjoy its ice cream. It still delivers milk in glass bottles, although today it uses trucks instead of horses.
  • Twiddy & Company manages a portfolio of individual, privately owned vacation homes on the Northern Outer Banks of North Carolina.  Family owned and operated, Twiddy & Company employs 110 people year round and almost 500 during peak vacation season. Although the vacation rental market has changed over the years, Twiddy’s mission has remained constant throughout its 35-year history: Offer the very best selection, service, and successful experiences to both homeowners and guests. 

This post chronicles why these companies decided to bring more robust analytics capabilities into their organizations. In the second, I look at the key considerations that came into play in their search for a solution and how they decided which solution to use. The third post examines how analytics are helping their companies thrive and grow.

Triggers for Change

The vast majority of SMBs use spreadsheets and intuition for analysis and decision-making, even as spreadsheet errors proliferate, time is wasted, and trends are missed. So what drives some SMBs look for alternatives to “spreadsheet management”?

This quote from Albert Einstein sums it up nicely: “We can’t solve problems by using the same kind of thinking we used when we created them.” Faced with an “aha” moment that they could no longer ignore, each of the three companies we spoke with decided it was time for a change.

Creating a Competitive Edge with Better Owner and Guest Services

Wild Horse AerialIn 2009, Clark Twiddy, Director of Operations and son of founder Doug Twiddy, came home to the family business after serving in the Navy. He saw that Twiddy & Co. was “swamped in transactional data. We rent 900+ properties 25 times a year, with multiple and varied service transactions every week on each unit. We struggled to keep up with delivering great service to homeowners and guests.”

Twiddy must keep track of many variables. It needs to ensure each property is clean, safe and serviced properly for each visitor; optimize occupancy and rates for property owners; and negotiate better pricing from plumbers, carpet cleaners, electricians and other service providers.

As big, nationwide rivals entered the market, Twiddy recognized that “getting our information faster, more valuable, and easier for people who needed to act on it right away” was critical to the company’s future. “Keeping track of all the variables with Excel proved problematic. People sat behind desks and researched data for hours or days trying to find trends or just answer pretty simple questions.  For example, it was too easy to get blindsided because we didn’t spot a safety issue that should have been addressed.  The risks of unmanaged data became something we had to act upon.”

PrintStabilizing and Growing the Flagship Business

Survival of the home delivery business triggered a fresh look at alternatives at Oberweis Dairy, According to Bruce Bedford, VP of Marketing, “In 2010, we recognized that we had to stabilize and grow our flagship home delivery business, which accounts for about a third of revenues. We had to understand why customers would discontinue the service, and then take corrective marketing action to turn that around.”

At the time, Oberweis was using “very complicated” Excel spreadsheets, Visual Basic macros and pivot tables. “Although best efforts were made to figure out what was happening, it wasn’t cutting it,” explains Bedford.

Preventing Costly Process Errors

BGFCorporate QA Manager Bobby Hull and other managers at BGF had relied on individual, PC-based versions of SAS to monitor data and processes. As Hull noted, “That worked for a while, but we were growing so much, we had so much product diversity, the customer base and their demands were changing. We had to be quicker, better, faster, leaner and deliver higher quality.”

In the mid-2000s, a customer spotted a trend in a BGF product that Hull says, “We should have spotted ourselves. We had all of the information in our systems, we measured everything we could measure, but we had no good way to extract and use it.”

After investigating the issue, Hull notes that, “In hindsight, pulling the data out after the fact and looking at it, the trend was there…we should have spotted that. It was scary…these are technical fabrics going into complex, high-end industries and you can’t afford to drop the ball because it can get expensive really fast.”

As a result, BGF decided they needed “a serious way to dig into information quickly, easily and to surface it. We’d invested so much money to collect the information, but its dead money unless we do something with it.”

Perspective

Data is the new business capital. But just like financial capital, you have to invest wisely to reap value from it. As these three customer stories illuminate, making the investment to move beyond spreadsheets to an analytics-driven approach generates a very positive return on investment for the business.

Is it time for your business to make this investment? Think about what keeps you up at night. Can you put your finger on the pulse of information about operations, customers and processes–when, where and how you need it? Is your business out in front of customer trends, or playing catch up? Are you able to spot potential problems before they result in lost revenues and/or brand damage? How would you reimagine your business if you could take the pulse of key metrics more readily and easily? Thinking through the answers to these questions will help you answer this question and chart a more effective course to using data to make better business decisions and gain market advantages.

The next step is to assess internal capabilities, desired outcomes, and what you’ll need from a solution provider to reach your goals. In the second post in this series, I’ll discuss how BGF, Oberweis and Twiddy tackled this crucial phase.

This is the first of a three-part blog series by SMB Group and sponsored by SAS that examines why and how SMBs are moving from spreadsheets and intuition to a data-driven approach to grow their businesses.

 

Charting Your Big Data Journey

Slide1In the first post in this series, I examined the underlying trends driving the buzz around big data and its relevance for SMBs. In the second, I discussed how three IBM business partners (FYI Solutions, LPA Systems, Inc. and Waypoint Consulting) are helping SMBs take a pragmatic approach to successfully apply analytics and big data solutions to solve business problems.

In this third and final post, I’ll talk about how to determine business readiness for big data solutions, and considerations to keep in mind as you help your business move ahead in this area.

Big Data Readiness

Today, even small companies are generating and accumulating staggering amounts of data. The question is, can you turn this data into reliable, accessible and actionable information that you can apply to solve business problems and make better decisions?

Many SMBs rely on Microsoft Excel to generate information and reports. If you’re in this category, you can get ahead simply by taking advantage of analytics tools built into the financials, HR, CRM and other core systems that you use. Taking it a bit further, combining Google Analytics data from your website with CRM data can offer you fresh insights about who’s coming to your website, from where, and what they’re doing when they get there.

But as business complexity grows, data and reports are spread across more databases, spreadsheets and applications, and stored on servers, personal computers, mobile devices and in the cloud grows as well. Using disparate data sources and tools to answer key questions such as “what products can I price at a premium” and “what are the best ways to increase repeat sales?” becomes difficult, time-consuming and burdened with inconsistencies.

“When customers approach us, the top reason is because they don’t trust their data and reports. Too time-consuming always comes up as well. They are also struggling to get an enterprise-wide view of their data,” according to Joe Rodriguez, Software Practice Leader, FYI Solutions.

If you answer yes to the questions in Figure 1, your business probably needs to integrate key data sources into a central repository. As Brendan McGuire, Managing Partner, Waypoint Consulting puts it, “You need to pull data from the cloud and on-premise applications into an integrated, rationalized data store. You can do this on your own systems, or you can do it in the cloud in a subscription model.”

Figure 1: Big Data Readiness–Key Questions to Ask

Slide1With a core foundation of common, trustworthy and accessible data in place, you’ll be able to get deeper insights into operations and customer behaviors and preferences. Companies typically start out with “descriptive” business intelligence (BI) tools to dig in and get more visibility into key metrics such as those noted in Figure 1, and make better decisions. For instance, if you’re a retailer, these tools can provide analysis to pinpoint optimal locations for new stores, more accurately forecast customer demand, minimize inventory or negotiate better pricing from suppliers.

Moving Up the Curve

Until recently, having solid analytics capabilities for internal, structured data was enough to give many businesses an edge. But, with more data and different kinds of data pouring in from more places, companies are looking for new ways to help them access, analyze and use data to gain market and competitive advantages.

In broad-brush strokes, big data helps do this in two ways. First, big data technologies crunch through both structured and unstructured data exponentially faster than was ever possible before. Examples of technologies that enable this super-charged data crunching power include hardware with increased memory and parallel processing capabilities, and Hadoop and MapReduce, which harness the power of multiple, distribute computers for problem solving.

Using this kind of technology, you can run analyses that used to take days or weeks in minutes. This make it possible to analyze data that you may have collected for years, but were never able to analyze before, or to weave new, external data sources into your analysis.

In addition, new kinds of analytics tools and solutions make it easier to explore data in more accessible, actionable ways, including:

  • Mobile business intelligence. Nowadays decision-making is as likely to happen in an airport or at a customer site as in headquarters. Mobile solutions let users see, share, report, and analyze data on smartphones and tablets. They take advantage of native, user-friendly mobile interfaces, such as touch screens, and give users the ability to make smarter, faster decisions regardless of location.
  • Visualization. You may be able to look at a hundred of rows of data and make sense of it, but can you look at thousands of rows and figurer out what’s going on? Visualization solutions help people to see what’s happening across hundreds of thousands of data points quickly and easily.
  • Sentiment analysis. Social media and digital sites have given customers and potential customers a much bigger and louder voice. Sure, you can easily tell how many followers or fans you have, but do you really know what it means to your business? Sentiment analysis identifies the user attitudes towards a brand, product or event by using variables such as context, tone and emotion.
  • Predictive analytics. Using mathematical algorithms, predictive analytics helps you to spot what’s likely to happen next. With predictive tools, you can examine large amounts of historical data (internal and external, structured and unstructured) to identify hidden patterns to alert you to future trends and stay ahead of the market.
  • Prescriptive analytics take things a step further, actually guiding you to a course of action, via options for what you should do next. Prescriptive analytics solutions can fine-tune themselves as they take in new data to continually improve your decision alternatives.

Choosing Your Big Data Path

Where you go next depends on where you are today, and your business goals, as discussed in Putting Big Data To Work For SMBs. Often, explains Brendan McGuire, “the greatest opportunity is to make data more consumable…making it easier for the business person to have conversations with the data, whether its structured or unstructured, through better mobile solutions, or visualization.”

Meanwhile, LPA Systems is helping hotel chains use forecasting and planning solutions to get a better idea of expected occupancy rates based on historical transactional data mixed with external information about upcoming events and other factors to optimize pricing and marketing initiatives. As Jesse McNulty explains, “Now they can better assess if they’re going to be overbooked on a weekday in July, and charge more, or if they’re going to have occupancy issues, and need to do a promotion”.

Although prescriptive analytics is still further out on the horizon for most companies, Joe Rodriguez sees customer interest in this area growing. “Just like your GPS provides you with alternate routes, tells you where to go, and what turns to make in your car, prescriptive analytics can be like a crystal ball to help predict outcomes and improve decision-making for the business.”

Perspective

As revealed in the IBM Institute for Business Value and Said Business School, University of Oxford, three out of five midmarket respondents report that analytics, information and big data solutions “create a competitive advantage in their industry,” representing a 66% increase since 2010. Given the rapid rate and pace of change in business and technology, this gap will widen.

While turning information into insights isn’t easy, the good news is that vendors are increasingly recognizing that big data isn’t only for big businesses. Whether you are just starting to think about the relevance of big data for you business, or you have some of the basics in place, more vendors, including IBM, are focusing on SMB customers. Not only are they building more solutions tailored to SMB requirements, they are also developing educational materials to help you learn how more about applying big data solutions to real world business problems. As important, they are growing and training their business partners to help you get up the learning curve, implement solutions and optimize the value you gain from them.

So do your homework. Assess your company’s key challenges, we’re you’re at today, and were you want to go. Talk to colleagues and business advisors you trust. Start developing a strategy to get the wisdom you need to grow your business and stay ahead of the competition.

This is the final post in this blog series by SMB Group and sponsored by IBM that examines big data and its implications for SMBs. The first post, Is Big Data Relevant for SMBs? parses through the underlying trends and hype surrounding big data, and what is important and relevant for SMBs. The second, Putting Big Data To Work For SMBs looks at how IBM business partners are helping SMBs take practical steps to put big data to work for their businesses.

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