INTRODUCTION
If you're a small business owner, finding the right business intelligence (BI) tools can be a daunting task. It would help if you had affordable, easy-to-use tools that could help you extract valuable insights from your data without requiring technical expertise. Fortunately, this beginner's guide is here to help, focusing on affordable and user-friendly BI tools that can help take your business to the next level. Don't let the complexity of BI tools hold you back - let this guide help you find the right tools to achieve your business goals.
BI tools are software applications that help businesses collect, analyze, and visualize data to gain insights and make informed decisions. These tools can help businesses of all sizes, including small businesses, to identify trends, patterns, and opportunities within their data, leading to improved decision-making and business performance. However, implementing BI tools can be complex and expensive, making it challenging for small businesses to adopt them. This guide simplifies the process and provides practical steps for small businesses to implement BI tools without breaking the bank.
IMPORTANCE OF BI TOOLS FOR SMALL BUSINESSES
Small businesses often need more resources and have tight budgets, making it challenging to compete with larger companies. BI tools can level the playing field by allowing small businesses to access and analyze data like big corporations. Incorporating BI tools can help small enterprises make data-driven decisions, optimize operations, and identify new growth opportunities. Additionally, BI tools can help small businesses save time and money by automating data analysis and visualization processes, reducing the need for manual data manipulation and analysis.
GLOSSARY OF TERMS
Business Intelligence (BI): The use of software applications to collect, analyze, and visualize data to gain insights and make informed decisions.
Canned Dashboards: Pre-designed dashboards that can be customized to fit specific business needs.
Cloud-based: A software or service that is accessed over the internet and hosted by a third-party provider.
Data Analysis: The process of examining, cleaning, transforming, and modeling data to discover useful information and support decision-making.
Data Integration: The process of combining data from multiple sources into a single, unified view.
Data Visualization: The graphical representation of data and information to communicate insights and trends effectively.
Freemium Model: A business model in which a basic version of a product or service is offered for free, with additional features or services available for a fee.
Key Performance Indicators (KPIs): Measurable activities used to evaluate the success of an organization or specific activity.
Open Source: Software that is freely available and can be modified and redistributed by users.
Pilot Testing: A limited roll-out of a product or service to a select group of users for testing and feedback.
Multi-factor Authentication: A security method that requires users to provide two or more forms of identification to access a system or application.
Return on Investment (ROI): A measure of profitability that calculates the gain or loss generated on an investment relative to the amount of money invested.
Total Cost of Ownership (TCO): The total cost of owning and operating a product or service, including initial costs, maintenance costs, and any other associated costs.
TABLE OF CONTENTS
DEFINE BUSINESS GOALS
Defining business goals is the first step in implementing BI tools. This step involves identifying the specific objectives the organization wants to achieve through BI tools. Defining business goals can be broken down into the following sub-steps:
1. Identify specific business objectives that BI tools can support.
It is crucial to understand the business goals that BI tools can support to ensure that the tools chosen align with the organization's objectives. This step will also help prioritize essential features and functionalities for the business.
2. Prioritize measurable goals.
BI tools can help measure and track specific KPIs, such as sales, customer satisfaction, and operational efficiency. Identifying these KPIs can help determine the type of data and analysis needed to achieve business goals.
3. Set realistic and measurable goals to track progress and success.
Setting realistic and measurable goals will help track the success of implementing BI tools and determine the ROI. This step will also help identify areas for improvement and optimization.
4. Examples: Increase sales, reduce costs, improve customer satisfaction, optimize marketing strategies.
Increase sales by 10% next quarter by identifying top-performing products and targeting marketing efforts towards them.
Reduce operational costs by 15% in the next year by identifying inefficiencies in the supply chain and optimizing processes.
Improve customer satisfaction by 20% in the next six months by analyzing customer feedback and addressing pain points.
Optimize marketing strategies by tracking and analyzing website traffic, social media engagement, and conversion rates.
ASSESS BUSINESS NEEDS ON A BUDGET
Assessing business needs on a budget involves identifying the specific data and analysis requirements to achieve business goals while keeping costs in check. Evaluating business needs on a budget can be broken down into the following sub-steps:
1. Identify the types of data needed to achieve business goals.
This step involves identifying the data sources essential for achieving business goals, such as sales, customer, and operational data.
2. Determine the level of data analysis required.
This step involves identifying the types of analysis needed, such as descriptive, diagnostic, predictive, and prescriptive, to achieve business goals.
3. Prioritize data and analysis needs based on business goals.
Prioritizing data and analysis needs can help focus on essential elements and avoid overspending on unnecessary features.
4. Examples: Sales data, customer data, operational data, marketing data.
Descriptive analysis of sales data to identify top-performing products and customer segments.
Diagnostic analysis of customer data to understand customer behavior and preferences.
Predictive analysis of operational data to forecast demand and optimize inventory levels.
Prescriptive analysis of marketing data to recommend the most effective marketing strategies.
5. Identify essential KPI to avoid paying for unnecessary features.
Identifying essential KPIs can help avoid paying for unnecessary features and functionalities that do not align with business goals.
6. Examples: Sales revenue, customer acquisition cost, customer retention rate, website traffic, conversion rate.
Sales Revenue measures the success of sales strategies.
Customer Acquisition Cost determines the most cost-effective marketing channels.
Customer Retention Rate assesses the effectiveness of customer retention strategies.
Website Traffic tracks the success of digital marketing efforts.
Conversion Rate measures the effectiveness of website design and user experience.
FORM A SMALL, SKILLED BI TEAM
Forming a small, skilled BI team is crucial to successful BI initiatives. This team should consist of individuals with technical and business skills to ensure effective implementation and use of BI tools that align with business objectives. It's essential to identify individuals with technical expertise in data analysis, data visualization, and database management to handle the technical aspects of BI tools. Similarly, individuals with business knowledge, such as an understanding of business processes and goals, should be identified to implement the BI tools effectively and support business objectives effectively.
It is advisable to limit the team size to only those individuals who are essential to the project. Doing so will help keep costs down and ensure the project is completed within the allocated budget. By carefully selecting the team members based on their skills and expertise, you can ensure that the project is executed efficiently and effectively without unnecessary expenses. Additionally, this approach can also help improve communication and coordination, leading to better collaboration and a more successful outcome.
In summary, forming a small BI team can help your organization make informed decisions and gain a competitive edge. By carefully selecting versatile team members and providing them with the necessary tools and resources, you can ensure that your BI initiatives are successful and positively impact your business. Recommended steps for forming the team are below:
1. Identify individuals with technical expertise.
Individuals with technical skills, such as data analysis, data visualization, and database management, are good candidates to handle the technical aspects of BI tools.
2. Identify individuals with business knowledge.
Individuals who possess business knowledge ensure that BI tools effectively support business objectives by understanding business processes and goals.
3. Choose versatile team members who can wear multiple hats.
Choosing versatile members who can take on various roles and responsibilities is essential when building a team. These individuals should possess diverse skills and be able to adapt to different situations. Having team members who can wear multiple hats can increase productivity, efficiency, and overall team performance. It also ensures the team can handle unexpected challenges and direction changes without relying on external resources. Therefore, when assembling a team, consider looking for individuals who are not only specialized in one area but also have a broad range of skills that can be applied to different tasks and projects.
4. Limit the team size to essential roles to keep costs down.
It is advisable to limit the team size to only those individuals who are essential to the project. Doing so will help keep costs down and ensure the project is completed within the allocated budget. By carefully selecting the team members based on their skills and expertise, you can ensure that the project is executed efficiently and effectively without unnecessary expenses. Additionally, this approach can also help improve communication and coordination, leading to better collaboration and a more successful outcome.
5. Examples: Data analysts, data scientists, business analysts, project managers.
Data analysts handle data manipulation and analysis.
Data scientists develop predictive and prescriptive models. They are skilled in machine learning and artificial intelligence techniques.
Business analysts understand business operations and refine the processes to streamline the adoption of BI tools.
Project managers oversee the implementation and use of BI tools.
BUDGET ANALYSIS AND APPROVAL
After identifying the needs, the next step is to analyze the budget and seek approval for implementing BI tools. Analyzing and approving the budget can be broken down into the following sub-steps:
1. Identify the initial costs of implementing BI tools.
This step involves identifying the costs associated with purchasing the BI tools, such as licensing fees, hardware costs, and implementation costs.
2. Determine the operational costs of using BI tools.
This step involves identifying the ongoing costs of using BI tools, such as maintenance fees, training costs, and support costs.
3. Consider potential upgrade costs in the future.
This step involves considering the costs associated with upgrading to newer versions of the BI tools or adding new features and functionalities.
4. Assess the residual value of the BI tools.
This step involves estimating the value the BI tools will provide the organization.
5. Examples: Initial costs, operational costs, upgrade costs, residual value, TCO.
Initial Costs: $10,000 for licensing fees, $5,000 for hardware, and $5,000 for implementation costs, totaling $20,000.
Operational Costs: $2,000 for annual maintenance fees, $3,000 for training costs, and $1,000 for support costs, totaling $6,000 per year.
Upgrade Costs: $5,000 for upgrading to a newer version of the BI tools in three years.
Residual Value: The BI tools provide a projected 20% increase in sales revenue, resulting in $50,000 additional revenue annually.
TCO: $20,000 for the first year, $6,000 per year for operational costs, and $5,000 for upgrading in three years, totaling $37,000 for three years.
RESEARCH AFFORDABLE BI TOOLS
Researching affordable BI tools involves exploring options that align with the organization's budget and needs. Many of the options on the market today also offer built-in AI assistance for slicing and dicing your data. Researching affordable tools can be broken down into the following sub-steps:
1. Look into open-source options.
Open-source BI tools are free to use and can be customized to fit specific business needs. However, they may require technical expertise to implement and maintain.
2. Consider cloud-based solutions to avoid hardware costs.
Cloud-based BI tools are hosted on remote servers, eliminating the need for on-premises hardware and reducing costs. However, they may require a stable internet connection and may not be suitable for organizations with sensitive data.
3. Evaluate freemium models or tiered pricing structures.
Some BI tools offer a free version with limited features and provide additional features for a fee. Others offer tiered pricing structures, allowing organizations to choose the needed features and pay accordingly.
4. Examples: Open-source, cloud-based, freemium, tiered pricing.
Open Source: BIRT (Eclipse Foundation, 2023) and JasperReports (JasperSoft, 2023).
Cloud-based: Google Looker Studio (Google, 2023), Microsoft Power BI (Microsoft, 2023a), Tableau (Tableau, 2023), QlikSense (Qlik, 2023) and Zoho Analytics (Zoho, 2023).
Freemium: Google Looker Studio (Google, 2023), Microsoft Power BI (Microsoft, 2023a), Tableau (Tableau, 2023), and Zoho Analytics (Zoho, 2023).
Tiered Pricing: Google Looker Studio (Google, 2023), Microsoft Power BI (Microsoft, 2023a), Tableau (Tableau, 2023), and Zoho Analytics (Zoho, 2023).
PERFORM COST-BENEFIT ANALYSIS
Performing a cost-benefit analysis involves weighing the costs of implementing BI tools against the potential benefits they can provide. Businesses can perform a cost-benefit analysis with the following steps:
1. Match features with business needs.
This step involves evaluating the features and functionalities of different BI tools and determining which ones align with the organization's business needs.
2. Weigh short-term costs against long-term gains.
This step involves considering the initial and ongoing costs of using BI tools against the potential long-term benefits, such as increased revenue and cost savings.
3. Examples: Increased revenue, cost savings, improved decision-making.
The company increased revenue by $50,000 per year from implementing BI tools.
The company realized cost savings of $10,000 annually from optimizing processes and reducing operational costs.
Management improved decision-making based on data analysis, leading to more effective strategies and higher ROI.
TEST DRIVE SELECTED TOOLS
Test-driving selected tools involves utilizing free trials and demos to get a feel for the BI tools and their functionalities. Recommended steps for test-driving different BI tools are:
1. Utilize free trials and demos.
Most BI tools offer free trials or demos that allow organizations to test their features and functionalities before purchasing.
2. Engage with community forums for user feedback on performance and cost-efficiency.
Community forums and user reviews can provide valuable insights into the performance and cost-efficiency of different BI tools.
3. Examples: Free trials, demos, community forums, user reviews.
Google Looker Studio: Offers a free version. It integrates with the Google suite of products and has built-in connectors for many different data sources (Google, 2023).
Microsoft Power BI: Offers a limited free version with an account. It also has a community forum where users can share their experiences and provide feedback on the tool's performance and cost-efficiency (Microsoft, 2023a).
Tableau Public: Offers a limited free version. It provides a vast repository of data visualizations (Tableau, 2023).
FINALIZE AND PURCHASE
Finalizing and purchasing BI tools involves negotiating pricing and ensuring no hidden fees or mandatory add-ons. You can break down the steps to finalize and purchase the new BI tools into the following steps:
1. Negotiate pricing when possible.
Some BI tools may offer discounts or negotiate pricing for small businesses. It is worth exploring these options to reduce costs.
2. Double-check the absence of hidden fees or mandatory add-ons.
Some BI tools may have hidden fees or require additional add-ons for certain features, which can significantly increase the overall cost. Double-check and negotiate these costs.
3. Examples: Negotiation, hidden fees, mandatory add-ons.
Tableau Public offers discounts for non-profit organizations (Tableau, 2023b).
Google Data Studio has no hidden fees or mandatory add-ons (Google, 2023).
Microsoft Power BI provides discounts for non-profit organizations and educational institutions (Microsoft, 2023c).
LEAN IMPLEMENTATION
Lean implementation initially focuses on critical data sources and integrations and uses templates and canned dashboards to minimize customization costs. A breakdown of the implementation for your new BI tools is as follows:
1. Focus on critical data sources and integration initially.
Implementing BI tools can be a time-consuming and costly process. Focusing on essential data sources and integrations can minimize costs and streamline implementation.
2. Use templates and canned dashboards to minimize customization costs.
Most BI tools offer pre-designed, customizable templates and canned dashboards to fit specific business needs. Utilizing these resources can save time and reduce the need for costly customization.
3. Examples: Key data sources, integrations, templates, canned dashboards.
Key data sources: Sales data, customer data, operational data, marketing data.
Integrations: CRM, ERP, marketing automation software, e-commerce platforms.
Templates and canned dashboards: pre-designed dashboards for sales, marketing, finance, and operations.
SECURITY ON A BUDGET
Security on a budget involves leveraging existing security protocols and using built-in security features of the selected BI tool. The steps to having secure BI tools on a budget are as follows:
1. Leverage existing security protocols.
Most organizations have existing security protocols in place to protect their data. Leveraging these protocols can help reduce the need for additional security measures and costs.
2. Use built-in security features of the selected BI tool.
Most BI tools have built-in security features, such as data encryption and user access controls, which can help protect sensitive data. Utilizing these features can reduce the need for additional security measures and costs.
3. Examples: Existing security protocols, built-in security features.
Existing security protocols: Firewall, antivirus software, data backup and recovery protocols.
Built-in security features: Data encryption, user access controls, multi-factor authentication.
PILOT TESTING AND FEEDBACK
Pilot testing and feedback involve limiting the initial rollout of BI tools to essential departments or teams and using their feedback to refine implementation without additional costs. The following steps will guide you through pilot testing the BI tools and analyzing the user feedback:
1. Limit the initial rollout to essential departments or teams.
Pilot testing involves implementing BI tools in a limited capacity to identify any issues or areas for improvement before a full-scale implementation. Limiting the initial rollout to essential departments or teams can minimize costs and streamline testing.
2. Use feedback to refine implementation without additional costs.
Collecting feedback from pilot testing can help identify any issues or areas for improvement, allowing adjustments without incurring additional costs.
3. Examples: Pilot testing, feedback.
Pilot testing with the sales department to identify data integration or dashboard functionality issues.
Using feedback from the marketing team to refine dashboard design and data visualization.
MINIMAL TRAINING
Minimal training involves utilizing online resources and tutorials to train staff and limiting formal training sessions to critical users. Steps you can take to incorporate minimal training efforts are as follows:
1. Use online resources and tutorials to train staff.
Most BI tools offer online resources and tutorials, such as video tutorials and user guides, to help users learn how to use the tool effectively. Utilizing these resources can save time and reduce the need for costly formal training sessions.
2. Limit formal training sessions to critical users.
Formal training sessions can be costly and time-consuming. Limiting these sessions to critical users, such as the BI team and department heads, can help minimize costs and ensure that the most vital users are proficient in using the BI tool.
3. Examples: Online resources, tutorials, formal training sessions, key users.
Online resources and tutorials: Video tutorials, user guides, online forums.
Formal training sessions: In-person training sessions, webinars.
Key users: BI team, department heads, key decision-makers.
MEASURE ROI AND OPTIMIZE
Measuring the ROI and optimizing the usage of BI tools involves keeping track of success based on initial budget based KPIs and reallocating resources based on performance and requirements. Maximizing BI tools can involve reallocating resources to areas with a positive ROI, such as providing additional training for critical users or investing in data integration to improve data accuracy. It can also involve identifying areas without a positive ROI, reallocating resources to other regions, or discontinuing specific BI tools.
The formula to determine ROI is by taking the Gain from Investment minus the Cost of Investment, divided by the Cost of Investment. For example, if the cost of investment for implementing BI tools is $10,000, and the gain from investment is $20,000, the ROI calculation would be as follows:
ROI = ($20,000 - $10,000) / $10,000 = 1 or 100% ROI
The steps involved in measuring the ROI and optimizing the usage of BI tools are as follows:
1. Monitor success based on initial budget based KPIs.
KPIs should be established during the budget analysis and approval stage to measure the success of implementing BI tools. These KPIs should be aligned with the initial budget and business goals.
2. Reallocate resources based on performance and needs.
Based on the performance of the BI tools and the organization's needs, resources should be reallocated to optimize the usage of the tools and ensure a positive ROI.
3. Examples: Budget-based KPIs, resource reallocation.
Budget-based KPIs: TCO, ROI, cost savings, time savings, data accuracy.
Resource reallocation: Additional training, data integration, customization, and security measures.
CONCLUSION
Implementing BI tools in a small business setting hinges on a strategic, cost-effective approach that aligns with the organization's needs and financial constraints. Assessing business needs thoroughly and forming a small, versatile BI team are foundational steps, ensuring the tools chosen are functional and financially viable. Emphasis on selecting affordable BI solutions, such as open-source, cloud-based, or freemium models, allows for a balance between quality and budget. The careful consideration of TCO and a rigorous cost-benefit analysis further guide the selection process, ensuring that the investment is reasonable and likely to yield a positive return.
Practical implementation strategies enhance efficiency while minimizing costs. These strategies include focusing on critical data integrations and leveraging pre-designed templates. Ensuring robust security measures and conducting pilot testing with selected departments or teams facilitates a smooth initial rollout. Minimal yet focused training empowers key users to utilize the BI tools effectively.
Continuous performance monitoring through KPIs is crucial for evaluating the ROI and optimizing the BI tools' usage. By following these guidelines, small businesses can harness the power of BI tools to gain valuable insights, improve decision-making, and drive sustainable growth, all while maintaining a keen eye on budget constraints and maximizing value.
ACKNOWLEDGEMENTS
This guide was written in collaboration with AI technology. The AI large language model developed by OpenAI, called ChatGPT, was used to generate ideas and an outline. During the writing process, Grammarly was used to generate language improvements and add details.
Any AI-generated text has been reviewed, edited, and approved by Sondra Hoffman, who takes full responsibility for the content of this publication.
ABOUT THE AUTHOR
Sondra Hoffman is a seasoned MIS professional with over ten years of experience in strategic planning, implementation, and optimization of MIS solutions. She is passionate about helping small businesses thrive through technology and data management. Connect with her on LinkedIn to learn more about her professional background.
CONTACT ME
Contact me today for a consultation on improving your existing information system. Cost-effective approaches are available to drive your business with data.
Email: info@sondrahoffman.online
Phone: (707) 862-3937
LinkedIn: https://www.linkedin.com/in/shoffman4/
Request an Appointment Online:
REFERENCES
Eclipse Foundation. (2023). What is BIRT? Retrieved December 23, 2023, from https://eclipse-birt.github.io/birt-website/docs/what-is-birt
Google. (2023). Welcome to Looker Studio! Retrieved December 23, 2023, from https://support.google.com/looker-studio/answer/6283323?hl=en
JasperSoft. (2023). JasperReports® Library Community Edition 6.20.6. Retrieved December 23, 2023, from https://community.jaspersoft.com/files/file/20-jasperreports%C2%AE-library-community-edition/
Microsoft. (2023a). Power BI. Retrieved December 23, 2023, from https://www.microsoft.com/en-us/power-platform/products/power-bi#Product-overview
Microsoft. (2023b). What is Business Intelligence? Retrieved December 23, 2023, from https://powerbi.microsoft.com/en-us/what-is-business-intelligence/
Microsoft. (2023c). Power BI for non-profits | Microsoft non-profits. Retrieved December 24, 2023, from https://www.microsoft.com/en-us/nonprofits/power-bi?rtc=1
Qlik. (2023). Qlik Sense® | Modern Cloud Analytics. Retrieved December 23, 2023, from https://www.qlik.com/us/products/qlik-sense
Sisense. (2023). What is Business Intelligence? Retrieved December 23, 2023, from https://www.sisense.com/glossary/business-intelligence/
Tableau. (2023). Tableau pricing for teams & organizations. Retrieved December 23, 2023, from https://www.tableau.com/pricing/teams-orgs
Tableau. (2023a). Business intelligence: A complete overview. Retrieved December 23, 2023, from https://www.tableau.com/learn/articles/business-intelligence
Tableau. (2023b). Tableau foundation. Retrieved December 25, 2023, from https://www.tableau.com/foundation
Zoho. (2023). What is Business Intelligence? Retrieved December 23, 2023, from https://www.zoho.com/analytics/business-intelligence.html
Comments