SIZED ENTERPRISES BY USING STANDARD SOFTWARE ... In large companies Business Intelligence (BI) is already widespread, in small and middle-sized ...
BUSINESS INTELLIGENCE IN SMALL AND MEDIUM SIZED ENTERPRISES BY USING STANDARD SOFTWARE Hans-Peter Steinbacher FH Kufstein – University of Applies Sciences Andreas Hofer Straße 7, 6330 Kufstein, Austria
Hanno Bilek FH Kufstein – University of Applies Sciences Andreas Hofer Straße 7, 6330 Kufstein, Austria
ABSTRACT Business Intelligence has become more and more important also for Small and Medium sized enterprises. The use of integrated IT systems produce a lot of business relevant data which can be used in a strategic manner for the enterprise by enabling reporting, analysis and also using it in a predictive way. But compared to large companies the smaller enterprises seldom have enough resources and budget to implement a complex BI landscape in their company. Therefore a lot of controlling, reporting and calculation procedures are carried out be available standard software (e.g. EXCEL). This survey investigates the usage of which standard software and in which context, such standard software is used to fulfil typical BI tasks. KEYWORDS Business intelligence, sme, standard tools, reporting
1. INTRODUCTION In large companies Business Intelligence (BI) is already widespread, in small and middle-sized enterprises (SME) it is less. As per Brosius and Tegel the essential cause is the prevailing management style which is still often authoritarian and autocratic in SME. However, the strong growing economic pressure makes a change necessary. Employees must be increasingly involved in decision making and therefore supplied with information (cf. Brosius & Tegel, 2002, p. 279). Particularly in micro and small enterprises the financial and personnel resources set the limit for complicated IT solutions. Today office software components like Word or EXCEL are inalienable in the business world. That is why one can assume that these software packages exist in most SME. Expensive special systems exceed the possibilities. Hence, enterprises demand to use standard software for the assignment of BI-solutions. “Reference numbers are indispensable for the guidance of an enterprise“ (Siegwart et al., in 2010, p. 2). Large companies depend on the compression of information to make the decisive preparation and therefore reference numbers are indispensable in large enterprises. In SME the personal contact between the management and their employees is still so close that reference numbers are less spread. The consideration to reduce BI exclusively to the technical components makes no sense. So the Business Intelligence Maturity Model (biMM®) describes additionally two more dimensions. Hence, the problem field knowledge and organisation are also analysed when this model is used. On the 5/20/2003 the European Union has published a recommendation concerning the definition of the concept Microenterprise as well as small and middle-size enterprises in the official gazette of the European Union. The recommendation refers to quantitative criteria. The number of employees, the turnover, the balance sheet total as well as the participation relations are the crucial indicators for the definition of SME. (cf. European commission, 2003, p. 37)
In 2011 the business Application Research centre in Wiesbaden (BARC) carried out an independent user questioning with small business in Germany for the second time: BI-systems are used primarily by controlling departments (89 %) and by the management (70 %). BI finds low application in research and development (R&D), purchasing, logistics, IT, production and human resources. To generate and share reports are the most frequent use of BI-systems. In future there will be an increased demand for mobile BI and predictive analytics. (cf. Seidler et al., 2012, p. 8) After 2004, in 2006 and 2009 the Steria Mummert consulting carried out a biMM® study for the fourth time in 2012/13. With the business Intelligence Maturity audit® (biMA®) it uses an analytical method which relies on the theory of biMM® and is based on a detailed questionnaire (.cf. Schulze & Dittmar, 2006, p. 76) Within biMM® technology is only one of three dimensions. Another dimension is knowledge. The third perspective considers characteristics of the organisation. (cf. Chamoni & Gluchowski, 2004, p. 120f)
2. SURVEY A substantial share of this work is devoted to the analysis of the current situation in different Austrian companies. The method, gathering the data was an online questionnaire. The survey included closed questions (yes/no/no answer) and a Likert scale for grading as well as the grading with max 64 points for the biMM® criteria fulfilment. The biMM® serves as a theoretical background for this enquiry. The representativeness of this survey is to be valued medium. Study authors like Seidler et al. are also conscious of this problem. The results of this work are not generally valid because the participating companies are not randomly selected. Austrian companies of the section trade and craft were questioned to three themes: the use of the office software EXCEL, the use of reference numbers and the development referring to biMM®. 19.886 companies were invited electronically to participate. 561 followed this invitation and 400 answers were evaluated. One result of the study shows clearly that in particular SME BI-systems are used primarily in the area of the static reporting. In future Reports will be changed dramatically. Henceforth static standard reports are used less widespread, but the number of users who work with dynamic reports will rise. Parameterization, filtering or assortment are some added functions of BI-systems, which means benefits for the users. Also ad hoc-analyses will be more common. These possibilities will be much more used by technical users. The demand for specialist with advanced knowledge in the area Data Mining will develop. At the moment still no comprehensive view of BI is noticeable in many companies. In most cases the cause lies in an absent BIstrategy or BI-Governance. In many cases the BI-strategy is only one part of the IT-strategy. Because of the costs the companies will look for cheaper possibilities in future. Offshoring, especially Near-Shoring, will most often be found in the area of BI. The development and firm of BI-systems within the company will decrease. Therefore shared service centres will serve the market. (cf. Dittmar et al., 2013) While middle-size enterprises have the resources to employ already qualified controllers, this is not possible for micro and small company. So a reduction in few expressive reference numbers is necessary for small companies. An indicator-shortlist shows the complete KPI-system consisting of 15 to 25 reference numbers. (cf. Kaplan & Norton, 1997, p. 156) The SME research centre Austria considers primarily financial KPIs. As per Lux the position of nonfinancial aspects are also very important. He recommends additionally about five KPIs for following areas: customers and market, processes and human resources (cf. Lux, 2012, p. 29ff ). A balance between financial and non-financial reference numbers is a decisive factor. Nevertheless, Reference numbers should not be overrated. A business management very strongly aligned with reference numbers will experience undesirable, partly negative side effects. (cf. Siller & Grausam, 2013, p. 140f) The following development potentials can be identified in the companies: Island solutions are often in use within companies. Departments thereby often operate independently and the transparency gets less important. This also underlines the low spread of automatic reports. The organizational shortages can be explained by the high participation of companies with 1-9 employees. On one hand internal BI competence teams exist in only a few companies and on the other hand, companies hardly ever separate the development from the use of the BI system. There seems to be an organizational need for change with the documentation and standardization of processes in the companies. Although this question has received the highest approval, no process organization exists in the majority of the companies.
As already mentioned, the results have to be seen associated with the enterprise size. It clearly arises from the evaluation of the questions concerning the criteria of biMM® that middle-size enterprises have a better result in all three dimensions of the model than microenterprises. Particular in middle-size enterprises more BI-systems are implemented. As a conclusion enterprises using BI-systems reach more points than enterprises without BI-systems in all three dimensions, especially also in the dimensions knowledge and organization. The largest difference exists in the technical dimension. The three dimensions do not seem to differ clearly from each other.
3. CONCLUSION The possibilities and limitations using standard software (e.g. EXCEL) as a BI - solution in SME and in addition the functionalities of BI systems are described. EXCEL is no equivalent substitute for BI software. Essential requirements like the date consolidation and the data management cannot be carried out in EXCEL properly and with a long lasting effect. In addition, these board means are not sufficient, but must always be combined with other software solutions. However, this software can be used in micro and small companies, but should be combined exclusively with other software solutions – based on Data-Warehouse.
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