Executives at small and midsize companies are making critical business decisions every day based on the information available to them. This information can come from a variety of sources: opinions from peers and colleagues; a personal sense of intuition or business judgment; or data derived internally or externally to the organization. This is particularly worrisome given the lack of confidence in data available to decision makers: a 2007 report conducted by the Economist Intelligence Unit (EIU) and commissioned by Business Objects found that nine out of ten corporate executives admit to making important decisions on the basis of inadequate information.1 This suggests that problems in decision-making are arising in the quality, amount, and timeliness of information. As a result, today’s small and midsize companies are destined to make a number of uninformed decisions on an alarmingly regular basis. Executives simply do not have the relevant information required to make the best decisions in a timely manner. They must thus find a way to create an accurate, actionable 360-degree view of their enterprise. Real-time visibility provides not only a means to verify and justify results, but also full confidence that small and midsize companies are leveraging consistency, accuracy, and timeliness via a single data source to make better, faster decisions.
Small and midsize companies today have access to more information than ever before. However, many of them have fallen victim to their own success. With rapid growth, small and midsize companies everywhere are inundated with waves of data—about products, competitors, suppliers, customers, and so on. They need to get a firm grasp of this data so that their executives can extract the relevant information whenever they need it, to make the right decisions.
The information explosion is not the only problem facing small and midsize companies when it comes to data management. There’s also a growing tendency for employees to deploy their IT savvy to create and maintain files on local drives rather than shared databases, effectively creating “micro-silos” of data. This tendency includes such practices as using e-mail to work around network servers, according to a 2007 FileMaker2 survey focusing on IT process management in small and midsize companies. So-called “employee free-styling” (i.e., the tendency of users to manage IT applications in an autonomous and unsanctioned way) is creating not only a data management problem but also serious workflow headaches, as well as potential compliance catastrophes.
These data silos are preventing departments within small and midsize companies from making the best decisions—and in some cases causing them to make decisions which hurt the organization as a whole. Most enterprise information is buried in spreadsheets and isolated information silos that have evolved over time—all undoubtedly serving critical short-term needs, but ultimately slowing the pace of decision-making to a crawl. A typical example of this plays out when individual salespeople collect and maintain customer data in Excel spreadsheets—data which to all intents and purposes is “hidden,” and which certainly cannot be manipulated by management to make assessments regarding profitability, or to perform analyses of the sales funnel. This speaks directly to the quality of the data available to management and executives for their decision-making processes.
Compounding the issue of data quality is the sheer quantity of data generated by day-to-day business activity. Estimating 40 gigabytes of data space for each user computer, an organization with 100 employees can generate 4 terabytes in user data alone. Factor in the data generated throughout the supply and distribution chains, and you’ve got an information haystack of monstrous dimensions. Furthermore, in today’s fast-paced business climate, data growth rates for typical small and midsize companies can double every two years.
The perception of executives, however, is that most of the information needed to make decisions is available “in the computer system,” or at least locked away until the moment is right for it to be accessed and used. After all, with the automation of business functions, such as accounting, shipping, and manufacturing, there’s a natural expectation on the part of executives that more data must necessarily translate into more available data—and data with greater relevancy.
