Once the preserve of large enterprises, a new generation of business intelligence (BI) tools is today within reach of small and midsize businesses (SMBs). However, fears about the cost and complexity of this technology persist, limiting adoption by smaller businesses.
In this report, we explore how SMB confidence in data analytics is impacted by the use of BI dashboards to analyze data. We also investigate the factors hindering adoption, and compare confidence levels between dashboard users and those using alternative methods of analysis, such as Excel. Finally, we provide advice from experts in BI on how SMBs can best deploy this technology.
- BI dashboard adoption rates are very low, with only 5 percent of SMBs reporting that they use such a system to analyze data.
- Yet BI users report a high degree of confidence that their data analysis has positive impacts on revenue and efficiency, with 29 percent saying they are “extremely confident.”
- Unfamiliarity with BI dashboard technology is the biggest obstacle to adoption, with 39 percent of SMBs saying they have no idea what it is.
In today’s hyper-connected, super-digitized world, data is everywhere—and companies such as Facebook and Google have generated vast profits by harvesting and exploiting it. But SMBs also generate data. And even though they may not have the resources of giant enterprises, that data still represents a business opportunity to be seized.
One way SMBs can perform data analytics is by using business intelligence (BI) dashboards. These aggregate many reports in one place and enable real-time analysis, compared to the more limited capabilities of Excel, or worse, pen and paper.
However, among smaller businesses, confusion still reigns as to what dashboards do, and BI is still thought of as something for only large corporations.
To find out whether SMBs are missing out on the benefits of BI, we surveyed owners and decision-makers to determine how many of them are using dashboards for data analytics. We then compared, between users and non-users, how confident they are that their data analysis is having a positive impact on profit and efficiency. The results are illuminating.
Only 5% of SMBs Use BI Dashboards to Analyze Data
First, we wanted to investigate the methods SMBs are currently using to analyze their data, in order to put some hard statistics on adoption levels. Just how dominant is Excel and its analogues—and what percentage of SMBs are currently using BI dashboards?
Top Methods for Analyzing Business Data
Excel and would-be rivals such as Google Sheets clearly dominate: 65 percent of respondents report using these tools for data analysis. Indeed, Excel is so common today that you probably have to make a concerted effort not to use it if your job involves analyzing data.
In the battle between pen and paper and spreadsheets, that latter will always win hands-down for the speed and complexity of calculations possible. However, this does not deter more than one-third (34 percent) of respondents from relying on manual methods to carry out their data analyses.
After this point there is a steep drop-off. Fewer than one-quarter (23 percent) report using analytics software built into other platforms (e.g., ERP software or marketing applications), while the enigmatic “other methods” scores 14 percent. And finally, only 5 percent of respondents report using BI dashboards.
To BI or not to BI? It seems that many SMBs have opted for the negative. But what lies behind these results?
Quentin Poiraud, marketing manager at BI dashboard firm ClicData, suggests that “the comfort of the familiar” is one reason for the dominance of Excel. As for the low adoption rates of BI tools, he adds that limited awareness of the technology among SMBs is a hindrance, as “a fair proportion of them [don’t] even know there are new tools and technologies out there to help them.”
Jeff Driscoll has 20 years’ experience working as an IT consultant for SMBs. He suggests that a lack of successful time-monitoring may also be a contributing factor.
“[SMBs] will readily sink their teeth deep into an Excel spreadsheet to try and generate a report of some kind, and spend a lot of time doing so,” he says. “If they’d spent the same time creating a dashboard, they’d be able to have that information available at all future times.”
Driscoll adds: “They should be looking at a data-driven decision process; what’s the ROI on creating a dashboard? How much time will it save every time you’d have to perform that check again in the future?”
Failure to do this inhibits growth, he says, as “employees don’t have access to information or intelligence they need to perform above par.”
Dashboard Users Are Confident in Leveraging Business Data
So what is the ROI from creating a dashboard? We next asked respondents to rate their level of confidence that their data analysis has led to measurable improvements in revenue and efficiency. Then, since BI adoption rates were so low in our first sample, we collected data from additional dashboard users. Finally, we compared confidence levels between dashboard users and devotees of other methods.
The chart below shows the results for those who report that they are “extremely confident” their analyses have raised profits and efficiency.
‘Extremely Confident’ Data Analysis Has Boosted Profit/Efficiency, by Method Used
Now we see that while BI dashboard users may be the minority, those who have made the leap report the highest levels of confidence (29 percent) that they are boosting revenue and efficiency through analytics. Indeed, here BI has a six-point lead over Excel, which so ruthlessly crushed the competition in question one.
So, what are the benefits of dashboards that set them apart from the rest of the crowd?
Jonathan Kucharski, enterprise sales manager of dashboards firm iDashboards, says there are many advantages, including:
⇒ The ability to display multiple data sources on the same dashboard, whereas Excel can pull from only one at a time.
⇒ Alerting capabilities that allow end users to receive texts and/or emails when certain thresholds are met.
⇒ Real-time connectivity to data sources, so information is pulled much faster and is more accurate.
⇒ The capacity to allow multiple charts and graphs, including maps and even facility floor plans, to be incorporated into a specific dashboard.
“All of these capabilities are lacking and/or non-existent in Excel,” Kucharski adds.
ClicData’s Poiraud stresses that dashboards offer “much more advanced” visualization tools:
“You are no longer limited to simple pie or line charts. You can use interactive indicators [such as] traffic lights and gauges, design predictive models and dynamically drill down and navigate in your data.”
These superior capabilities facilitate data analysis, enabling SMBs to make better decisions faster.
Consider the case of Fred Ferber, the owner and CEO of Ferber Industries and SMB-focused software firm Conveyorware. When he needed to handle rapid growth at his consumer electronics firm, House of Imports, he turned to BI software to consolidate his business data.
This allowed Ferber to identify which products were selling, item return and repair rates and optimum inventory levels to boost customer satisfaction. In addition, the software enabled him to track and analyze employee hours and costs.
“As I look back,” Ferber says, “our system’s ability to commingle data provided me with the most valuable information: This was data from which you could inform business decisions. The intelligence was essential to maintaining profitability, superior customer service and satisfaction.”
Hannah Lincoln, lead solution consultant with IT service firm ITAS solutions, adds that action-driving dashboards focused on specific key performance indicators (KPIs) may be best for getting results in an SMB context.
“By using KPI-based systems for sales dashboards, you can self-motivate staff to achieve targets, because they can see them in real time,” she explains. “The problem with reviewing targets a month later is that they don’t get the opportunity to hit those targets.
“By giving them their performance stats on a weekly, daily and even hourly basis, you are empowering your team to achieve more without you having to micromanage them. The benefits of this are obvious to any owner/manager.”
Biggest Obstacle to Dashboard Adoption Is Lack of Awareness
Given all this, we are faced with a conundrum: If BI dashboards have such high user satisfaction levels, why are adoption rates so low?
Most Common Barriers to BI Dashboard Adoption
For the largest proportion of respondents (39 percent), lack of awareness is the culprit, confirming Poiraud’s suspicions. The comfort of the familiar is also confirmed, with 23 percent of respondents reporting they are happy with their existing solution. Comfort is a wonderful thing—except in a business context, when it might mean you are settling for less while competitors charge ahead.
System cost (30 percent) and the concern that the business lacks staff qualified to operate a BI tool (21 percent) are the two other major factors holding SMBs back from investing in BI dashboards. But are these worries justified?
In the past, says iDashboard’s Kucharski, businesses usually could only get dashboard functionality as part of an overarching BI solution—and that was expensive. Today, however, dashboards are available as stand-alone tools, or as complements to existing solutions.
“Because of this, we are able to keep costs low and provide our customers the data visualization piece that they are needing,” he says.
Poiraud notes that the cloud-based software phenomenon has also had a leveling effect.
“Many [cloud] BI tools offer similar capabilities [to] the costly desktop solutions, but for a fraction of the price,” Poiraud says. “Cloud-based applications are putting advanced BI dashboards in the financial reach of any business.”
As for complexity, Kucharski says that the iDashboards tool is equivalent to “learning Excel and Powerpoint simultaneously.” He adds that training can be “conducted and completed on the first day,” allowing another two or four days for assisting with the dashboard building process.
Poiraud says that many of today’s BI tools are user-friendly and require little, if any, input from IT staff.
“New BI tools offer intuitive design and a drag-and-drop interface, making it easy for anyone to build a dashboard. Some BI tools even offer ‘plug and play’ dashboards, which allow you to simply connect your data source and it will automatically populate your dashboard,” Poiraud notes.
While these tools may not offer the same capabilities as the more advanced applications, they are a good fit for SMBs that are getting started with BI, says Poiraud.
“I would predict that as more of these tools become popular, they will be more widely used—and become the best friend of managers and C-level executives alike,” he adds.
BI dashboards can boost revenue and efficiency, but most SMBs are not making use of them, preferring to stick to tried-and-tested methods. A tool such as Excel is extremely useful, of course, but why stop there?
With entry costs lower than ever, SMBs owners and operators interested in getting the edge over their competitors should investigate dashboard technology.
So what should buyers do next? Our team of Software Advisors has expert knowledge of over 40 BI platforms, and has assisted more than 1,000 buyers in finding software that is right for them.
Here are two things buyers can do right now:
- Read reviews of BI tools written by real users, and discover what their peers think of specific platforms.
- Chat with a Software Advice BI expert, who can provide a free consultation and pricing information to connect you with the best BI software for your business by calling (888) 918-2748.
To find the data in this report, we conducted a three-question online survey of 243 owners and managers of U.S. businesses who analyze the business data they collect. All survey questionnaires undergo an internal peer review process to ensure clarity in wording.
Sources attributed and products referenced in this article may or may not represent partner vendors of Software Advice, but vendor status is never used as a basis for selection. Interview sources are chosen for their expertise on the subject matter, and software choices are selected based on popularity and relevance.
Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.
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