Sanjeev Aggarwal's Blog

November 27, 2012

Report Card: 2012 Top 10 SMB Technology Market Predictions

–by Laurie McCabe and Sanjeev Aggarwal, SMB Group

Before developing our 2013 predictions, we wanted to assess how we did on our 2012 Top 10 SMB Technology Predictions. Here’s our take–please let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2013, which we will post in a couple of weeks!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

Prediction Score

Comments

  1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets
4 Year-over-year data from our annual SMB Routes to Market Studies
indicated that more small and medium businesses (SMBs)* were forecasting flat or decreased IT spending heading into 2012 compared to 2011. Given SMB budget constraints and the plethora of solutions aimed at SMBs, vendors had to work harder to convince budget-constrained SMBs that their solutions would really help address top SMB business challenges to attract new customers, grow revenues and maintain profitability. More SMBs turned to lower-risk, pay-as-you-go cloud options, and several vendors (IBM, Dell and HP, to name a few) introduced new and/or enhanced financing options to help SMBs overcome financial hurdles.
  1. The SMB Progressive Class Gains Ground
5 We identified a distinct category of SMBs that we termed “Progressive SMBs,” who see technology as integral to achieving business goals and to gaining a competitive edge. Progressive SMBs invest more and purchase more sophisticated solutions than their counterparts. Trending analysis from our 2011 to 2012 Routes to Market Studies show that the percentage of SMBs in the Progressive category is growing. Furthermore, Progressive SMBs continue to gain ground over SMBs that skimp on technology in terms of expected business performance.
  1. The SMB Social Media Divide Grows
5 SMB adoption of social media did indeed jump, from 44% to 53% among small businesses (and from 52% to 63% among medium businesses from 2011 to 2012, based on trending analysis in our SMB Social Business Studies. The divide between social media haves and have-nots is also growing: our research reveals that 65% of SMBs that use social business tools anticipate revenue gains, while only 17% of “non-social” SMBs expect revenues to increase.
  1. Cloud Becomes the New Normal
4 SMBs haven’t swapped out all of their on-premises solutions in favor of the cloud–but the puck is clearly moving to the cloud in all application areas. The evolution is continuing at a steady pace, as evidenced by trending analysis in our annual SMB Routes to Market Studies. In some areas, cloud is poised to overtake on-premises solutions. For instance, over 30% of SMBs that purchased or upgraded collaboration, marketing automation, BI and data backup in the past 24 months chose cloud, and over 40% of SMBs planning to purchase solutions in those areas in the next month plan cloud deployments.
  1. Mobile Application Use Extends Beyond Email to Business Applications
5 SMBs significantly ramped up mobile business application use and plans in 2012, as evidenced by trending analysis from our annual SMB Mobile Solutions Studies. More SMBs are providing mobile business apps to employees in categories ranging from CRM to time management to expense reporting. In addition, adoption of external-facing (for customers, partners and suppliers) mobile apps and websites also rose considerably. For instance, SMB use of a mobile-friendly website is up 10% among small businesses and 23% among medium businesses.
  1. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate
3 The avalanche of data generated by cloud, social and mobile has certainly created the need for better analytics. However, year-over year trending data from our SMB Routes to Market Studies reveals a mixed bag in terms of adoption. Use of BI solutions among medium businesses spiked 24% in the past year, but adoption rose just 2% among small businesses. While vendors appear to be doing a good job of developing and marketing BI solutions tailored to the needs of medium businesses, they have not yet figured out the right formula for smaller ones.
  1. Managed Services Meet Mobile
5 We forecast that the explosion of mobile devices and apps, “bring your own device” (BYOD) phenomenon and the increasing concerns about security would spark increased demand for and more solutions to manage mobile on the back-end. Our annual SMB Mobile Solutions Studies show that SMB adoption of mobile management services—from simple device management to comprehensive mobile management platforms—has accelerated rapidly. For instance, 16% of SMBs have already deployed an outsourced mobile management platform, and 30% plan to do so within a year.
  1. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions
5 Small businesses without a payroll make up more than 70% of America’s 27 million companies. We hypothesized that the 2008 recession and subsequent layoffs generated a new and often “accidental” breed of entrepreneurs that would spike demand for—and growth of—applications targeted to meet the needs of these businesses. And they have. New and improved cloud-based and mobile apps from traditional small business powerhouses (Sage, Intuit, Microsoft, Google, etc.), SOHO pioneers (Freshbooks, Nimble, Dropbox, Zoho, etc.), and freelance talent sourcing solutions from companies such as Elance and oDesk are making it easier than ever for SOHOs to get their work done.
  1. Increased Adoption of Collaboration and Communication Services in Integrated Suites
4 Trending from our Routes to Market Study Medium businesses shows that overall, use and plans to deploy collaboration solutions is up year-over-year. Low-cost, low-risk, cloud-based collaboration and communications services have made it easier for SMBs to use integrated collaboration tools, while eliminating the inconvenience of using multiple sign-ons and interfaces.
The fact that vendors are integrating more into their offerings—such as Google integrating Google+ hangouts, IBM SmartCloud Engage adding social communities and Citrix adding video capabilities to GoToMeeting—doesn’t hurt either.
  1. The IT Channel Continues to Shape-Shift.
5 Cloud, social and mobile trends continue to reshape how channel partners must deliver value across the board. SMBs are increasingly choosing to purchase directly from software and cloud vendors in most areas. And Managed Service Providers (MSPs) have gained ground as a purchase channel over VARs in several solution areas, including security, BI and collaboration. The need for more specialized business and/or technology expertise has also made some types of channel players more relevant in each specific solution category than others.

*In SMB Group Syndicated Survey studies, we define small businesses as those with 1-99 employees, and medium businesses as having 100-999 employees.

For more information on our most recent SMB Mobile, Social Business and Routes to Market Studies, please visit our website, www.smb-gr.com, or contact Sanjeev Aggarwal, Sanjeev.aggarwal@smb-gr.com, 508-410-3562.


February 7, 2010

Mid-Market CPM Requirements and Vendor Selection Criteria

In today’s fast-paced and volatile business climate, midsize businesses need a clear vision, financial agility, and strong collaborative capabilities to drive better-informed and more strategic business decisions. Mergers, acquisitions, new business models, and increasing regulatory requirements heighten the importance of having accurate, flexible tools to support corporate forecasting, budgeting, reporting, scorecard and compliance functions.

Many midsize companies currently use Microsoft Excel spreadsheets, email, shared folders, and other ad hoc tools for these tasks, but they are finding significant shortcomings with this approach. As a result, more businesses are evaluating CPM solutions as a way to get these jobs done faster, more efficiently, and more accurately.

However, while their financial and planning operations may be very complex, midsize companies are often constrained in terms of their budget, IT resources, and support. In addition to evaluating the features of different CPM solutions and how these solutions stack up in terms of meeting their functional requirements, decision makers need to consider several additional factors. Based on our recent in-depth discussions with several mid-market CFOs and CIOs that have evaluated, selected, and implemented CPM solutions in the last couple of years, here are our suggestions as to the key questions that midsize firms need to answer when evaluating CPM solutions:

  • How quickly and easily can business users learn to use the solution? Easy to use solutions lead to faster, more widespread user adoption. Ideally, CPM solutions should have an interface with a familiar spreadsheet look and feel. You should be able to easily configure the interface and dashboards without help from IT or external consultants, and building models should be intuitive. In a midsize firm, you don’t want to have to rely on or wait for an IT department that’s probably stretched to thin to create and run reports. When users can easily create and run reports themselves, they get the key performance indicators (KPIs) and other information they need more quickly, speeding up and enhancing the decision-making process.
  • What is the total cost of ownership (TCO) for the CPM solution? CPM solutions need to be affordable. They must take into account not only software costs but also any resources that you will need to design, implement, configure and manage these solutions (including annual maintenance fees), as well as the hardware you’ll need to run them on. You must also consider if you’d be better off with a subscription-based service that you can pay for monthly or annually without incurring any upfront capital costs. Many midmarket buyers are considering software-as-a-service (SaaS) or cloud-based CPM solutions that offer subscription-based pricing and eliminate the need for upfront capital investments. SaaS CPM makes it easy for companies to start small and expand use as their needs grow. Since SaaS CPM solutions are delivered over the Web, they don’t require on-premise infrastructure, or internal IT support or maintenance. As a result, you can deploy them more quickly and dramatically reduce TCO.
  • Is the vendor’s pricing transparent? No one wants to start evaluating solutions and then get sticker shock because of hidden costs. Look for vendors that provide transparent pricing on their Websites, or at least, vendors that will give you a good ballpark estimate early on it the evaluation process.
  • Do you want a focused, purpose-built CPM solution, or CPM as part of a broader business intelligence solution? Solutions designed specifically for corporate performance management (such as Adaptive Planning, Clarity, Prophix. Longview and others) are typically more cost-effective and fast to deploy than broader business intelligence suites, which often include a CPM component. However, broad based BI solutions, such as IBM Cognos and SAP Business Objects, are beginning to carve out CPM specific modules and offerings that integrate with the broader suite. Consider what your short and long term requirements in deciding which route will best serve your firm’s needs.
  • Can you try before you buy? Solutions that are easy to evaluate lower your risk—both from a time and monetary perspective. Can you get a true feel for the solution, with a functional trial version? If the finance department can try the solution with real data and see the results, it can speed the vendor selection and decision-making timeframe significantly.
  • How long will it take to implement the solution? Most mid-market enterprises do not have months to spend deploying and getting productive with CPM. Talk to customers already using the solutions you are considering to get an accurate, realistic picture of how long it will take.
  • How well does the solution meet your data security requirements? Security is a top concern for all companies, and in some industries, regulatory requirements also come into play when considering a CPM solution. In some cases, specific compliance constraints require companies to deploy on-premise solutions. However, in many cases, a quality SaaS provider can provide better, more secure and more reliable operations than an internal IT department. Ideally, look for a vendor that is SAS-70 compliant and can readily document the physical and virtual security measures that they use to safeguard your data.

The good news is that today, more CPM solutions are available that are specifically designed to meet mid-market requirements than in the recent past (from companies like Clarity Systems, Prophix, Adaptive Planning, Host Analytics, Longview and from BI companies like SAP BusinessObjects, IBM Cognos, etc.). By carefully assessing the questions above and focusing on the criteria and features most important to your business, you will almost certainly find a CPM solution that can give you a much more connected, productive planning process than could be achieved with Excel spreadsheets.

January 28, 2010

Mid-Market companies benefit from the significantly better ROI offered by the synergistic relationship between ERP and BI

Strong value in considering/purchasing ERP plus BI simultaneously/at the beginning of the implementation cycle

ERP solutions come with a reporting toolset consisting of a predefined set of reports and with general purpose query tools to generate reports from data within ERP database. Most often, these tools are difficult and confusing to use and rely on an IT team to deliver the requested report, which can take time. ERP systems provide acceptable reports on day-to-day operations but if business requirements change, these static ERP reports need to be customized. Business users need on-demand reports, which are cumbersome and expensive to deliver in a timely manner. By using BI reporting solutions, these systems empower the business user to define and generate the needed reports, freeing valuable IT (or consultant) resources in the process, such that data and time can be better exploited to make meaningful business decisions.

I have been talking to several mid-market companies that have implemented ERP solutions followed by a business intelligence solution (initially deployed for reporting from the data in the ERP solution). Their recommendation, based on their experience of deploying both solutions, is that mid-market enterprises should consider utilizing ERP and BI together (possibly through a planned phased implementation approach), a strategy that would realize significantly higher ROI versus the alternative of considering each independently of the other.

The crux of this recommendation comes from closely looking at the customizations required to make the ERP solution useful for these companies. A significant number of customizations needed in ERP systems are related to generating reports to provide detailed information (in part, similar to that previously obtained through their formerly implemented legacy systems) for decision-making and presenting it in a useful and easy-to-understand manner—a daunting and expensive proposition. Complementing a BI solution with an ERP solution makes the generation of reports required by corporate management and various lines-of-business very easy and eliminates the need for any extensive customizations (as was required to generate these in an exclusively ERP system). The right business intelligence solutions can help extract significant value from the extensive data repositories in an ERP solution. The combination of ERP and BI should also bode well for mid-market companies in the current difficult economic environment, as companies strive for maximum efficiency by looking to cut costs and realize projects that provide them with short-term returns. The companies that have already implemented ERP could benefit by focusing on BI solutions for reporting, corporate performance management and consolidation (CPM) and strategy planning.

Mid-market customers using SAP Business-All-in-One as their key ERP solution have said that the extra time, effort, and money spent to customize their initial ERP could have gone towards paying for a BI solution (in several of the cases they were using SAP BusinessObjects Edge BI). Additionally, the reports they now get from their SAP BusinessObjects solutions (after integration) are more detailed and accurate than before. Other added benefits of this integrated solution—including savings on maintenance, IT administration time, integration and consulting support for upgrades, etc—largely result from the fact that SAP has already spent the time and effort to tightly integrate these two solutions providing better workflow and departmental self-service capabilities to develop and customize reports for their needs. With this solution, individual users can also more easily drill down from these reports to get deeper context to explain the factors influencing what is shown in reports beyond the visually attractive graphs and tables.

As a result, this combined SAP Business-All-in-One and SAP BusinessObjects Edge BI solution could provide significantly better Return on Investment (ROI) than each solution considered independently, and if the SAP BusinessObjects Edge BI can be paid for by reducing the customizations required in SAP Business-All-in-One, the combined solution also has a much lower total cost of ownership (TCO). With the mid-market focused Business All-in-One fast-start program from SAP coupled with the SAP best practices for the SAP BusinessObjects Edge BI for reporting and CPM solution, mid-market enterprises will be able to benefit from fast deployment, more productive and streamlined solution.

Blog at WordPress.com.