Intelligent Enterprise

Better Insight for Business Decisions

RSS
Webcasts
Whitepapers
Subscribe
Home

July 18, 2003

The Intelligent SMB: Opportunity Knocks

With leading strategic application solution providers pinning hopes for growth on small- to medium-sized businesses, companies have a golden opportunity to create competitive advantages with IT

by David Stodder

It begins with a dream: a sudden insight scrawled on the corner of a shopping bag, shared in whispers in the parking lot after work. You make the commitment, sign on for the labor of love, and prove it through long days and nights to get the business rolling. And roll it does: up and over every hill, dip, and turn in the business cycle. You feel every one of them. There are no insignificant business processes, customers, or inventory. Every dollar is critical, every person matters.

As a small business becomes medium-sized and then large and public, growing pains make it harder to maintain singular focus. Fortunately, thanks to a combination of market forces and technology advances, small to medium-sized businesses (SMBs) have a golden opportunity. Strategic business applications, heretofore available only to the largest corporations, are heading down to price and usability levels attractive to many SMBs.

And this time, it's real. Especially with corporate IT spending remaining flat, strategic business application providers are serious about pleasing SMBs. IDC says that SMBs — generally companies reporting $500 million or less in revenue, although some researchers define the sector up to $1 billion — will account for 54 percent of IT spending in 2003. Most analysts put the value of this market sector at over $300 billion.

"SMB is a land of extremes," says Dave Kellogg, senior group vice president of World Wide Marketing at Business Objects. "We generally find either big companies running packages meant for really small ones, or companies trying to run with some creaky application that a long-gone consultant wrote five years ago." Kellogg continues: "You also find more empowered people who aren't under the 'wet blanket' of a large corporate bureaucracy. That makes SMBs exciting."

Accelerating Progress

In many respects, strategic business application requirements in the SMB sector don't differ from those at large organizations. All companies need to turn information into intelligence, with which they can empower their knowledge workers (or at least close family members) to manage growth across increasing numbers of divisions, sales channels, and product revenue streams. SMBs, like large organizations, face tough decisions about whether to introduce new products, change suppliers, acquire or expand their way into new markets, or invest in the revenue potential of existing customers.

However, SMBs present extreme usability challenges. IT staffs are small or nonexistent; users generally have neither the skills nor inclination to become expert in technology. Plus, SMBs take on far more risk when they invest in strategic business applications, which include software packages for managing business processes and operations, BI and analytic solutions, and emerging business performance management (BPM) software. SMBs can't buy software and then open the checkbook for endless consulting. Fewer layers exist between top executives and their customers: In other words, failure isn't an option.

Efforts to meet special SMB requirements could pay dividends across the spectrum. With IBM, Hewlett-Packard, Microsoft, SAP, and other leading vendors paying so much attention to the SMB sector, developments bear watching by larger organizations. Rather than the usual "trickle down," technology, pricing, and other innovations are more likely to trickle up.