How organization size affects Business Intelligence goals, deployments, adoption and success

By James Polasek and Lachlan James

Just so you know, the answer is ‘yes’. Size does matter; when it comes to implementing Business Intelligence (BI) that is…

BI has permeated through organizations of all sizes – some are more saturated than others. The profile of an organization will affect its ability and willingness to implement BI. Dresner Advisory Services (DAS) has sought to determine how the size of an organization will dictate BI goals, deployments, adoption and success through its latest Wisdom of Crowds Business Intelligence Market Study.

The strengths and weaknesses of an organization can be profiled based on its size. For example, start-ups will have vastly different properties and priorities compared to large corporations. These intrinsic differences will influence the way businesses approach BI – from the rate of adoption, to objectives, future plans and core user groups.

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Functions driving BI by organization size

Across organizations of all sizes, Executive Management is driving BI implementation. As BI is often a top-down initiative, or at the very least a project that requires significant executive backing, it’s unsurprising that Executive Management heads the list of functional roles responsible for pushing BI deployments across organizations of all sizes.

Survey participants were ask to rate the influence that different business functions – Executive Management, IT, BI Competency Center, Strategic Planning, Marketing and Sales – had on their BI programs.

Answers were ranked on a five point scale, with respondents stipulating whether each listed department was “always”, “often”, “sometimes”, “rarely” or “never” involved in driving BI initiatives.

As a departmental driver, Executive Management was awarded a weighted average of between 3.7 and 4.2 out of a possible five (see figure above).

The influence of other functions varies more so by organization size. The smallest businesses (1 – 100 employees) placed the greatest emphasis on sales, ranking its influence 3.8 out of five. The authority of sales personnel appears to diminish as a driving force for BI projects amongst larger organizations (2,001 – 10,000+ employees). It’s plausible that the BI initiatives of smaller organizations are more consistently propelled by sales due to reduced cash flow and the need to directly transform many efforts into tangible revenue.

It’s interesting to note, however, that IT and BI Competency Center’s have considerably more influence over BI deployments in larger organizations (1,001 – 10,000+ employees). In these instances, it’s safe to hypothesize that larger organizations generally have the required revenue to support dedicated (and more extensive) IT and BICC departments, which will therefore often pursue / govern BI on behalf of the organization and other individual departments.

Targeted BI users by organization size

What’s immediately apparent is that senior executives are both the key drivers and recipients of reporting and analytics – irrespective of organization size. As key organizational decision-makers and project ‘sponsors’, this is hardly surprising.

Whilst it’s clear that upper and middle management are the two groups most frequently targeted for BI deployments, throughout organizations of all sizes, it’s also evident that Middle Managers and Line Managers are more often the recipients of BI solutions in larger businesses. That is, the frequency with which middle and line managers were given access to business analytics directly increased in relation to an organizations’ total number of employees.

This clear correlation could be attributed to the fact that as an organization increases in size, so do its levels of management – key decision-making is often dispersed and divided up into smaller, more manageable groups.

Intriguingly, the smallest sized businesses, those with less than 100 employees, were the most likely to target customers with their BI deployments. Organizations with 100 or fewer workers scored customers, as a BI user group, a weighted mean of nearly two out of three.

So, what’s behind this anomaly? Can these findings be explained by smaller organizations seeking a competitive edge over their bigger rivals? Or can this apparent outlier be explained by simple business realities? That is, perhaps implementing customer-facing analytics programs is simply unrealistic for bigger organizations with many clients?

BI objectives by organization size

When assessing differences in BI objectives by organization size, a similar pattern emerges to the one which was identified when analyzing functional BI drivers by organization size.

While ‘better decision-making’ is the dominant outcome sought by organizations of all sizes when implementing BI, other objectives shift in priority in accordance with workforce size.

According to study results, the desire for “improved operational efficiency” increases in direct accordance with organization size. The inverse relationship is evident – both in absolute terms and proportionally compared to other objectives – when assessing “growth in revenues” as a priority.

The smallest organizations (1 – 100 employees), after enabling “better decision-making”, are most concerned about increasing revenues – this is true of no other sized organization surveyed. Conversely, organizations in excess of 10,000 employees viewed “improved operational efficiency” as far more important than entities with smaller payrolls.

We can postulate that because smaller organizations are often grappling with minimal revenue, and small profit margins, improving cash flow is integral.

The largest organizations, however, are more likely to have expansive infrastructure and operational costs. Therefore, increasing operational efficiencies, by even a small margin, could translate to significant reductions in day-to-day expenditure.

Current BI penetration rates by organization size: Smallest and largest dominate BI adoption

When analyzing the degree of BI penetration by organization size, the report revealed a surprising trend: Organizations on both extremes of the scale, the smallest and largest businesses, have experienced the highest rates of BI penetration.

As seen in figure 25, the smallest organizations are experiencing far higher rates of BI penetration as a percentage of total employees. Over 30% of organizations with 1-100 employees reported that “81% or more” of their workforce had access to BI. It’s reasonable to theorize that smaller businesses are able to implement BI initiatives more broadly, and in shorter timeframes compared to their larger counterparts, primarily due to greater enterprise-wide agility stemming from fewer employees and less complex organizational processes.

While smaller organizations have a clear edge in their ability to implement BI more pervasively, larger organizations have significant resources at their disposal. These resources offer an ‘edge’ of a different kind, with an abundance of manpower and financial backing helping to create the necessary environment for BI uptake. But notably, while larger organizations have the next highest rates of BI penetration as a percentage of total employees, their adoption rates are significantly lower than smaller organizations. This gap can be ostensibly attributed to the amplified organizational complexity of larger organizations, combined with the fact that deploying BI to the same percentage of total employees compared to small organizations, is potentially both unrealistic and unnecessary.

Midsized organizations don’t share the same organizational benefits as small or large businesses. They lack the abundant resources as well as the flexibility, which is reflected in the reduced BI adoption rates of organizations with between 1000 and 5000 employees.

The future of BI: 2014 planned BI penetration rates by organization size

According to the study, 2014 BI adoption plans, by organization size, coincide with current BI penetration patterns. Smaller organizations will look to extend their leading penetration rates in 2014, with a further 12% planning to spread BI to 81% or more of their employees. As previously mentioned, we can presume that smaller businesses are able to implement BI across their organization more deeply, and at a greater pace, than their larger counterparts due to an absence of complex logistical hurdles and absolute employee numbers.

Middle range organizations had the weakest plans for 2014. Among businesses with 1001 – 2000 and 2001 – 5000 employees, only an additional six and four percent respectively planned to increase their BI penetration rates to 81% or more of their workforce.

Larger organizations, sized within the 5001 – 10000 employees category, reported the most aggressive expansion plans. A further 15% of organizations in this category planned on delivering BI to 81% or more of their employees through 2014.

BI success by organization size

As figure 32 (below) suggests, the relative size of an organization does play a role in perceived BI success. Smaller organizations are more likely to classify their BI projects as fruitful, with 54% completely agreeing that their BI initiatives had been successful. This can be attributed to the increased agility of smaller businesses and, therefore, their ability to deploy quickly, pervasively and consequently realize tangible BI benefits fast.

Middle-sized organizations, particularly those ranging from 1,000 – 5,000 employees, continue to struggle to implement BI successfully. It has been suggested that midsized businesses lack the nimbleness of smaller organizations and the resources of larger organizations. DAS’ 2013 BI market study confirms this hypothesis, with only 21% of organizations with 1,000 – 2,000 employees completely agreeing that their analytics initiatives were a success.

Overall, some degree of value was derived from BI across the board. Almost 90% of all organizations, regardless of size, reported their BI implementations as somewhat successful.