Embracing Biz Intelligence

At the VARBusiness 500 Awards event last month, Malcolm Gladwell spoke of making business decisions based on instinct rather than analysis. The author of best-sellers Blink and Tipping Point cited numerous examples of how managers went down the wrong path because they focused too closely on data and not enough on their gut instincts.

Easy for Gladwell to say. He's not running a multimillion-dollar business, nor is he responsible to Wall Street analysts and stakeholders. But then again, most of your small-business customers aren't running those types of organizations either, and they are often going by their gut. Business intelligence, to them, is intuitively responding to customers' needs in real-time -- not analytics that anticipate future market conditions.

Enterprises have long refined disparate data into actionable intelligence. Now, small and midsize businesses are beginning to realize the same thing, and business software--particularly applications that either create efficiencies (ERP, business intelligence) or enable expansion (CRM)--is flying off the shelves. In the quarterly VARBusiness State of Technology survey, most solution providers reported that the bulk of their business-software sales (65 percent) is coming from small companies (with fewer than 100 employees). No surprise, since business software is becoming more user-friendly, moving from the exclusive domain of the enterprise to organizations of nearly every size. And the best part is that the ISV community is churning out hundreds of modules tailored for the specific needs of any business, further expanding the capabilities of these software solutions.

Business software still isn't plug-and-play. The applications may be easier to deploy and support, but there's a twofold problem that may impede growth in this space: training and lack of expertise. Simply put, many solution providers don't understand or use business software enough to sell it effectively.

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The State of Technology survey found that training--its time and expense--is the top obstacle among solution providers to offering business software. Lack of expertise was the third-highest impediment. By its very nature, business software is complex--even the versions that are scaled to small and midsize businesses. Whether you're talking about supply-chain management, ERP or CRM, the value comes as much from what data you feed the system as from what you get back. Just as gold dust "in" yields gold bars "out," garbage in leads to garbage out.

For instance, if a chain of dry-cleaning shops wants to improve its productivity and revenue, it may employ different business software to determine peak customer demands for ordering supplies, staffing stores and plants, and planning store hours. The same applications could be used to divine individual customers' spending patterns to customize loyalty incentive programs. But the company's management will more than likely need guidance on how to best use the applications and what customization is needed for their specific needs--and that's where the solution provider plays.

Ah, and that's also where the lack-of-expertise problem has added dimension. While the bulk of business software is being sold to small and midsize businesses, the majority of those selling it are also small and midsize VARs. And, much like their customers, smaller VARs aren't drinking the business-software Kool-Aid. Business-software vendors concur that they need to elevate the benefits of business software to their partners.

Many vendors--Microsoft, Business Objects and Oracle, for instance--are directing more energy toward raising partner awareness about business software and how to use CRM, ERP and business intelligence to grow their businesses. Microsoft's partner-profitability program is, in large part, targeting this goal. Andrew Vabulas, CEO of Microsoft partner IBIS, says he appreciates Microsoft's assistance in helping him become a better businessperson.

In conclusion, partners that incorporate business software and intelligence into their daily operations are more likely to convince their customers to follow suit. Solution providers that passionately embrace the virtues of business software will speak to their customers from the heart, and not just on statistics and analysis. Now that's something Mr. Gladwell would probably endorse.

Lawrence M. Walsh is the editor of VARBusiness and GovernmentVAR magazines.