Business Intelligence has been a main piece of software in the Enterprise toolkit for many years. Fortune 500 companies will typically spend six figures or more – sometimes much more – when implementing BI systems but the payoff can be tremendous. Today, the many benefits of business analytics are not limited to the large companies that can afford expensive and complex commercial software. The advantages of data analysis and reporting can be enjoyed by smaller companies, giving the entrepreneur the competitive edge in expanding market share or micro targeting specific demographics.

Business intelligence consists of four general areas: the combination and retrieval of related data; the ability to generate reports against this data; a 'dashboard' outlining the current health of the business; and a mechanism for predicting future trends by manipulating various conditions. For example, a specialty eCommerce site has noticed that the interval between purchases is increasing for returning customers (the dashboard) and is developing a marketing strategy aimed at returning customers (a customer loyalty discount). By developing a report on the number of customer purchases against the length of time between purchases, it is fairly straightforward to determine the optimal length of time to apply the discount. This in turn, can be further refined based on purchasing volume and types of related purchases, etc.

Okay – basic marketing. This can be effectively accomplished with a good understanding of spreadsheets and a little bit of spare time. The challenge comes when the business grows to the point where maintaining the spreadsheet becomes impractical and the other ad hoc reporting demands on the system can no longer be effectively managed. Some commercial databases such as SQL Server and Oracle offer fairly good software for performing these analysis and building reports from the data in these databases, but typically fall short when data from a variety of sources is required. The cost to purchase and maintain these systems can be prohibitive as well.

Fortunately for small business, there is a new breed of low cost (as in open source) technologies that can be leveraged for making informed business decisions. For those businesses willing to invest in setting up these systems and traveling down the learning curve, the rewards can be immense. Not only is it possible for the startup or small entrepreneur to respond quickly to shifts in the market, it is now possible to contain the IT costs normally associated with these efforts.

Lower cost, open-source solutions to business intelligence needs are not without risk. Some vendors of open source technologies are doing quite well in providing both training and various levels of support in implementing these tools. This can become a win-win, mainly because the open source vendor is now aligned with the success of the small business and not focused on selling more licenses or upgrades as is common with proprietary products.

For the small business struggling with managing data and needing relevant and immediate analysis of the business situation, a BI solution becomes imperative. Whether commercial or open source, there are BI options available. The rewards can be immense.