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The paper focuses on Cloud business intelligence as applied to small and medium enterprises. After an examination of the definition and basic terms used in cloud business intelligence, the paper contains a literature review on its application in SMEs. It was found that Cloud BI leads to cost reduction, and enhances flexibility and management of data.
On the other hand, it requires investment in training and may lead to errors in implementation. A case study of the use of Cloud BI was done as seen through prominent SMEs. Lastly, a discussion of the need to implement Cloud BI followed, and it was recommended that SMEs should adopt the technology for greater efficiency.
Cloud business intelligence may be defined as a software platform in which a series of users are hosted on a cloud. Firms do not need to invest in software or hardware when using Cloud Business Intelligence. Furthermore, all business intelligence projects can be operated and run at the same platform.
Custom applications can also be done in order to meet the needs of an organisation. Alternatively, companies may choose to link their applications to the cloud. Through Cloud BI, firms may also access industry-level data concerning their respective competitors.
An organisation can carry out a range of activities using this approach, some of which include: storage and networking, analytic solutions, normalisations and collection of components for analytics (SAP AG 2009).
Not all organisations may be at a stage where they need Cloud BI. However, it is necessary to take it up when one wants to get rid of all the complexities of permanent solutions. In certain circumstances, one’s IT resources may not be sufficient to deliver results, so Cloud BI can come in handy. If flexibility is a necessity within an organisation, then Cloud BI may prove to be helpful.
Some organisations have massive usage levels while others handle large volumes of data. When such characteristic exist, then the most effective way of dealing with one’s needs is through this mode of technology. At the end of the day, a business that succeeds is one that uses a well-integrated solution that can solve real problems in the organisation (Pirttimaki 2007).
Digital data is growing exponentially and many firms are open to new computing trends. A survey carried out by a US-based research organisation called IDC revealed that about 50% of the interviewees were willing to take on Cloud computing for their business intelligence needs in 2011. A further 70% said they would use the cloud for private use. Given these findings, it is likely that the number of Cloud BI users will increase with time (Turban et al. 2011).
Businesses use cloud business intelligence in order to meet three specific needs. The first is horizontal business intelligence. Here, an organisation will depend on its traditional database as the source of its data management system. This means that internal analysis and reporting of data will take place within that premises.
Alternatively, the technology may be used as an application framework in which integrators provide customer oriented solutions to those who require them speedily. The technology may be employed as a template for analysis and reporters. In this case, the Cloud system will possess components that can be used severally.
They usually depend on the domain or function attached to them. Additionally, the applications can be used more than once but ought to be reassembled by people interested in using them. Lastly, Cloud BI may be employed as a development platform. Here, companies will allow others to solve their problems through the use of data analysis of certain issues.
For instance it may be supply chain analytics, customer relationship management analytics or even financial analytics. The IT team that specialises in this process would need to build software-as-a-service architecture in order to add it to cloud infrastructure. It is likely that the applications platforms would solve problems for consumers without having to customise them extensively (Kinman & Duan 2000).
Users of cloud business intelligence may fall under three major categories: small to medium enterprises (SMEs), large organisations and systems integrators. Although the focus of this paper is on SMEs, it is still essential to understand what the other groups entail. SMEs would utilise Cloud BI for horizontal purposes (as explained in the introduction above).
This means that they will use it for on-demand services where they pay for services as they go. If an SME finds the right platform, then it can enjoy the benefits of a low-cost and internally oriented business intelligence solution.
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On the other hand, if an SME happens to be a developer, then it may use the Cloud BI for more than just horizontal applications. The organisations may opt to think of it as a development platform. This could provide them with high levels of affordability. Some of them may choose this business intelligence for the speed and value obtained.
Large enterprises are the second category of Cloud BI users. These companies may use the technology for horizontal applications. Consequently, they can get the benefit of protecting their environment from irregularities by taking project experimentation to the cloud. Large organisations always have operation systems that run continuously and do not entertain interruption (Burns 2007).
This means that external analytics applications would provide them with the opportunity to engage in risky or new endeavours without having to compromise operations. The speed and low cost of Cloud business intelligence would eliminate the need for interruption of normal operational processes hence ensuring seamless production.
The third category of users consists of systems integrators. These are individuals who use cloud computing for the purpose of an application framework. They aim at offering business intelligence solutions to customers with varying needs (Ivanova 2012). Members of this group can particularly benefit from cloud BI because they can easily customise applications to meet certain needs.
The process is inexpensive and fast. Furthermore, they can integrate various data sources or integrate it into a data warehouse. The scalability and efficiency of the cloud is invaluable to systems integrators.
Even though cloud computing was initially presumed to benefit large multinationals in the past, SMEs still need cloud BI for a number of reasons. Several SMEs are embracing the technology and using it to boost their returns. Almost all types of businesses are represented; some of them come from the financial sector, others are in manufacturing and retail. These organisations use the platform owing to a number of advantages.
The first is that it allows for faster deployment or speed. Small and relatively new companies are under intense pressure to stay profitable. This means that if new technology is adopted, it needs to provide benefits as soon as possible. Cloud business Intelligence allows SMEs to enjoy the benefits of the process in a short amount of time.
It is easy to streamline internal processes like marketing, human resources, supply chain management, and finance once a company embraces the technology. In the past, this translated into greater returns and a competitive edge for the small or medium enterprise.
Perhaps one of the major reasons why SMEs use Cloud BI is the low cost of the technology. Most of these organisations operate under low budgets that require value maximisation for tangible returns. A number of such businesses cannot afford conventional software solutions, yet they still have needs that must be met through BI technology.
It is a known fact that business intelligence architecture can be quite cumbersome for firms to implement. Efforts that are based on warehousing are particularly difficult to deal with. SMEs are increasingly handling large volumes of data. If they used conventional BI, they would need to hire professionals who often charge exorbitant fees.
However, Cloud providers can handle the availability and hiring of staff more efficiently than SMEs. It makes sense to deploy those activities to people who can easily understand them (Disterer & Fink 2006). Cloud BI companies already have data scientists and other professionals who are well versed with management of large amounts of data.
Consequently, the Cloud frees up more finances for SMEs to use on critical aspects of business. When looking at the cost of a business intelligence solution, one must consider the total cost of ownership. This covers the amount of money that a firm must invest in so as to implement it.
In the past, this involved all the expenses entailed in the purchase of the license for the software and license associated with running it. Furthermore, the total cost of ownership also involved the integration of data. If it was difficult for companies to access this data, then they needed to pay a lot more for the BI solution.
However, this is no longer true for organisations as most of them have embraced the benefits of cloud computing. BI costs were also relatively high because expenses depended on the processes related to the technology. Total cost of ownership would increase whenever new technological processes needed to be developed (Raymond & Bergeron 2002).
Cloud BI dramatically altered this expense because it was no longer necessary to concern oneself with the processes behind a technology. Costs have also changed because it takes less time to develop a workable application on the cloud. The more time a company spends on working on these issues, the higher the amount of financing they need in order to handle these projects.
SMEs who adopt this technology also enjoy the benefit of data management on their behalf. Small businesses can find it painstaking to maintain the hardware that is required for data maintenance. Further, they need to invest in back up systems that can overwhelm them. The cloud option allows them to grow their businesses and deal with security issues that may otherwise have been ignored if nothing was done about them.
Companies can thus free up their time to dwell on those aspects that will grow their businesses. Traditional business intelligence used to challenge most organisations because it was not available to non technical workers (Van Hoesel & Gibcus 2008). However, the new wave of BI through the cloud has changed this trend because most individuals fully understand it as they utilise it.
If small and medium enterprises solely focused on maintaining their on-premise databases, then they would have a difficult time when doing data recovery. Cloud BI enables firms to enjoy the benefit of recovering their data in the event that a disaster occurs in their premises. This minimises the amount of downtime consumed as well as the possibility of continuity whenever such events arise (Watson & Wixom 2010).
Conventional software solutions would need to be replaced in the event that a small or medium enterprise needs to grow. Consequently, this would involve a lot of time and resources that the company may not have. However, Cloud BI provides easy scalability and flexibility. The number of users in a small business can increase but the software employed does not have to be replaced if it is cloud-based.
All the organisation has to do is to upgrade its functions and continue focusing on its core activities. Furthermore, when data sources change, then a company would easily incorporate those alterations. SMEs often need to experiment or carry out trial runs; these can be effectively done through the use of Cloud BIs. Many of them may also need to widen their user base and this is easily handled on the cloud.
In the past, business intelligence was quite restricting to small and medium firms because most of them could not alter its structure within a set time. Additionally, it took those organisations a lot of time to implement the solution.
Most SMEs required a period of 6 months to work on a BI structure, yet that would be too long for most of them. This made it quite frustrating because business needs are quite dynamic. The problem of inflexibility does not bother most cloud users.
Regardless of all the above-mentioned advantages, cloud based computing does have its disadvantages. First, initial capital investments may be low, but as a company’s systems begin to grown, it may have to pay more in terms of subscription costs. Therefore, the long term cost or sustainability of such a solution is slightly questionable.
When thinking about adopting certain types of technology, companies have to incorporate their future needs. If these expenses will be too much, then the organisation ought to think about other options. This factor may prevent some SMEs from fully adopting the technology (Hostmann 2009).
Cloud computing, by its very nature, does not allow for a lot of customisation. SMEs are organisations that require such a feature on a regular basis. Therefore, the company may find that their cloud cannot meet their business intelligence needs on occasion. It is a given fact that an SME may require some level of expansion or change in the business intelligence solution after every six months. However, this time span may be too short for cloud providers.
Although it has been stated earlier that cloud BI allows firms to secure their data; most organisations prefer to do their own protection. Placement of data security needs in the hands of a third party may not be an acceptable fact for some companies that prefer to remain in control (Chaudhury & Bharati 2006).
In fact, several SMEs are reluctant to adopt this technology because they object to the availability of their data in another party’s database. Cases of mismanagement of information among some unethical cloud providers have also been noted. Although these situations may not be common, it is sometimes possible for some unethical staff within a certain cloud provider’s firm to sell crucial information to competitors.
Alternatively, some marketers may approach cloud company representatives for access to demographic information about the firm’s users. Although providers are required to protect their consumer’s information, it is sometimes possible for some staff members to engage in illegal activities that the provider has no idea about.
Evidence: case study
The medium enterprise chosen for analysis is known as Biobest. It is based in Belgium but does business in over fifty countries around the world. Biobest was started by Roland Jonghe who ran it as a family-owned business for over two decades.
It specialises in the production of bumblebees for agricultural or environmental purposes. The bees lead to pollination and control of unwanted pests such as mites. Currently, the firm boasts of making approximately 20 million Euros in turnover per year.
Before adopting cloud BI as a technological solution, the company encountered several problems along the way. First, it had an enterprise resource planning system (ERP) that was not standardised. This was particularly troubling because the organisation operated in several countries around the world, such as Mexico, Spain, Canada, France and Turkey.
They had adopted a business intelligence solution known as Microsoft Navision ERP, but this had not spread to all parts of the organisation. Furthermore, there were challenges with business budgeting as it only relied on Excel. Before thinking about a new method for handling their BI problem, the company needed to instate strong security measures.
The firm wanted to ensure that all the distributors accessed their own information without peeking into other people’s sources. At the time, business forecasting was done on Excel. This implied that the company had to spend a lot of time when reporting its information. As if that was not enough, the reporting process was haphazard and poorly coordinated.
With regard to financial management of their business, the company had issues with its accounting personnel; few of them were well connected to the consumer. This implies that they could not relate to their customers or provide commercially viable solutions. The company also suffered from varied interpretations of facts as each distributor or department had their own understanding of what was true on not.
Uncertainties existed in the nature of information used; the correctness of figures as well as the data quality within the ERP solution that they had adopted was doubtful. There were no transparent definitions for issues and only a small portion of the firm’s budget was allocated to information technology solutions (Microsoft 2012).
In order to deal with all the above challenges, Biobest approached a company called elementary 61 which had a lot of experience in offering cloud BI solutions for small and medium sized enterprises. The major goals of their business solutions were to make a correct project scope, develop a thorough requirements analysis, engage in data modelling and analyse data.
The solution also involved a definition of reports and structure for the reports. At the time of the project implementation, the concerned company had no experience with the use of IT solutions. It was essential for the cloud provider to guide them throughout the entire process so as to minimise any possible complications.
Their solution entailed a two-layered approach in which data warehousing took place. It also covered an error tracking system that was automated. It should be noted that the reporting solution would be located in the cloud.
When conducting this process, the firm used Microsoft SQL Azure for its database and Microsoft SQL for integration of server services. Additionally, the process also involved the adoption of Microsoft SQL Azure reporting.
In the implementation of the project, the Cloud provider company (Element 61) was responsible for the definition of a roadmap for its own BI systems. It also carried out an analysis of the requirements needed by the company and did all project management issues related with it. They defined the architecture involved in the business solution.
After definitions of goals were done, the provider then defined all the architecture required for the process and used its Microsoft experts in order install components in their structure. It then designed and built the system and coached Biobest on how they would use the infrastructure (Microsoft 2012).
After completion of the project, the company can now boast of a number of benefits. First, the problem of disintegrated data has been eliminated. Now the company stores information in one central location regardless of where it comes from. This implies that it easily turns the data into valuable information. Members of Biobest can also access information through reports regardless of their status in the company.
This has challenged the way the company understands their customers or the way it handles business. Additionally, now Biobest can boast of the ease of information sharing across all the functions in the entity.
Managers located in various segments can easily understand customer needs since they now depend on accurate figures. Lastly, the company’s sales force now has a comprehensive view of its clients and has adopted a multinational dimension of the same.
The case is strong for adoption of Cloud BI for SMEs. First, these organisations can reduce the cost of their information technology systems through Cloud BI. They can also enjoy great mobility and flexibility. In addition, they do not need to worry about data management as another company will do this for them.
Issues of data recovery can be easily streamlined through Cloud BI. Companies can therefore free up their resources and time to deal with the most relevant or critical activities. Nonetheless, long term concerns about costs are still a major problem and so are security issues. Prior to adoption of Cloud BI, SMEs need to weigh the cost implications of investment as well as maintenance costs (Pervan & Arnott 2008).
If customisations are not excessive, then the SME needs to consider this option. Companies also need to think about the IT skills that ought to be retained within the firm as a large portion of the skills will be in the cloud. Only a thorough analysis of their prevailing situation as well as the alternative Cloud BI solutions available to the company will yield desirable results.
Companies that are new to the technology, such as the one in the case study, need to use Cloud providers that have a lot of experience with SMEs. Furthermore, they should select providers that have the capacity to grow with them. If a provider possesses these qualities, then chances are that the company will succeed in development of some of its business intelligence systems (Kamal et al. 2011).
Conclusion, contributions, implications and research limitation
From the findings in the literature review and the case study, it is clear that small and medium enterprises can access more benefits than losses if they adopt Cloud BI. The technology would assist them in increasing their competiveness as well as their productivity levels.
Furthermore, since SMEs aim at growing rapidly, then they require solutions that would facilitate it. It is wise to adopt such a strategy as the company would reap more benefits than losses. Nonetheless, care must be taken to consider the nature of the organisation’s IT needs and the capabilities of the cloud provider.
This research has contributed to literature on Cloud BI by demonstrating its usefulness to SMEs. Through a case study analysis of an SME, the paper has proven that the business intelligence solution works. The case also shows the preconditions necessary for SMEs to make a success out of Cloud BI. This paper also strengthens previous researches done on the challenges and benefits of the technology.
The research implications are that circumstances involved in an organisation and among common vendors should be considered before embracing cloud computing. Essentially, SMEs should not be left behind in adoption of this revolutionary IT solution. However, it is only through careful consideration of the sustainability of the venture that they can succeed.
Research limitations include the use of only one organisation for analysis. A case study cannot be generalised to a whole population. Further, the nature of the organisation may not be representative of all SMEs. Opinions of employees were not obtained so it is not possible to understand how relevant the technology was to individuals.
In the future, researchers should carry out a survey of Cloud BI use in SMEs to overcome problems with the case study approach. The topic should also be expanded to include implications of the technology in performance of daily tasks among employees.
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