The value of business intelligence and performance management capability to mid-market companies has been hotly debated for several years. The complexity, pricing and implementation effort around sophisticated EPM and BI products has been a notable disincentive for resource constrained SMEs. But in recent weeks, several vendors, (Business Objects, Infor and Pegasus) have made a play for this important segment of the economy – each taking a different approach. Gary Simon, FSN’s managing editor reports.
If you think that it is difficult to wean large businesses off spreadsheets then it is doubly so for mid-sized companies. The ubiquitous spreadsheet remains the preferred choice for reporting in organizations of all sizes and with enhancements in Microsoft Excel such as ‘conditional reporting’ and ‘pivot tables’ there is a great deal of mileage in using spreadsheets in support of management reporting and business intelligence.
The boundaries between Business Intelligence (broadly query, slicing & dicing data and reporting) and performance management (budgeting, planning, scorecarding) has become blurred over time as the functionality coalesces. But the amalgamation of these concepts has come at a price and in many peoples’ eyes has created overly complex product suites that are expensive to buy, configure and implement. It is also difficult to compete with the relative simplicity of a spreadsheet.
Speaking to FSN last week, one CEO of a mid-market distribution company acknowledged that product complexity and the perceived need to employ more IT specialists to drive out business advantage had put him off a Microsoft solution.
Complexity seems to be at the heart of the debate and is particularly familiar to Kevin McCallum, Commercial Director, of Pegasus, the mid-market accounting vendor. They have recently developed and launched an Executive Dashboard which is at the leading edge of what the mid-market has to offer. Sitting astride its Opera financial software it is automatically configured and usable out of the box but simple drop down boxes present dozens of options for the most commonly used queries.
McCallum told FSN, “The problem with most Business Intelligence solutions is that they simply layer more complexity which is not what businesses need or want. People in the mid-market don’t want to spend time and money configuring software.”
Last month, SAP entered the fray by announcing that both new and existing customers of the SAP Business One application, its SME accounting product, could receive a basic version of Crystal Reports software completely free. The move represented one of the first offerings from the merged SAP/Business Objects businesses and was trumpeted as the first integrated solution from the SAP stable specifically engineered and packaged to meet the needs of small businesses.
But Pegasus’ McCallum questions the value of the initiative. “Crystal Reports is powerful but you have to wonder if there is too much in it for the mid-market.”
“If it is free to Business One users you have to ask where the backup and support is coming from and what incentive there is on the part of SAP to make it work for them,” he added.
Moving beyond pure Business Intelligence, Infor, the conglomerate in the accounting market that also happens to own Pegasus, said that it was packaging up a budgeting solution “Infor PM Business Edition” specifically for mid-market customers.
In announcing the move, Infor said that its solution offers the performance management functionality used in larger enterprises but configured for the smaller footprint of the SME. The result, it claims, is an easier to deploy and manage solution that gives SMEs the strategic tools they need to compete.
Infor acknowledges that most SMEs rely on spreadsheets for planning and budgeting, and although typical planning and budgeting applications offer more robust functionality they are complicated and cost prohibitive for many SMEs. The company claims that its new solution addresses the gap in the market for a planning and budgeting solution by providing the functionality SMEs need, in a package that is easier to deploy and also scalable to meet their long-term growth objectives.
Infor’s Chris Field told FSN, “The problem in the past has been that most budgeting solutions have only been suitable for larger companies with more than 50 users, requiring lots of expensive consultancy”.
“What we have done is offered reduced functionality which can be switched back on by licence agreement if and when it is needed at a later date. We have also simplified the solution by pre-building security, charts of account and procedures so that the solution does not have to be built from scratch,” he added.
Field would not be drawn on price but told FSN, “It will be significantly cheaper and is aimed at up to 25 users. Infor has lots of SMEs that need best practice but cannot afford bigger solutions. They will use Excel if we don’t make it affordable”.
By tying business intelligence solutions to specific accounting and business software packages, vendors such as Pegasus and SAP may have the edge over the more generic availability of Infor’s performance management offering. Pre-built configuration and the simplicity this implies are critical in the mid-market. But the key question is will the average SME be enticed away from its spreadsheets by the lure of free or greatly discounted software? If McCallum is right then no matter how financially attractive the proposition if an average SME cannot configure and use the product then it is quickly going to become shelfware!
