The Small Business Market – April 2006

Published in April 2006

The small to midsized business (SMB) market is getting a great deal of attention these days. As more products companies begin to realize the rich opportunity presented by this underserved business
segment the current stream of top flight products and services available to SMBs will become a raging torrent. Small businesses are back in vogue it seems (as it should be) and with this newfound
interest there is also renewed awareness of the unique challenges facing these organizations. Not the least among them is the issues related to data management.

Use the phrase “data management” with many small business leaders and they nod politely but their eyes begin to glaze over. Topics such as data quality and technology strategy often generate a
similar response. This isn’t because they don’t understand the terms, because, of course, they do. The root of these types of disinterested reactions lies more frequently in the fact that many
SMB managers are so busy running their business that they have precious little time to “think” about their business, especially when it comes to something as strategic yet esoteric as data
management practices. SMBs tend to be run pragmatically, which usually translates into tactical decision-making on a day to day basis. Sound data management models aren’t something one can achieve
in such an environment, because data management requires good planning and analysis techniques that most SMB owners and/or executives haven’t got the time to perform or the underutilized staff to
delegate it to.

Even when these businesses undertake major initiatives like CRM implementations there is little focus on the big picture concepts of data management. The goal advocated by the vendor is to get the
software installed, configured and into production as quickly as possible, because the sooner it goes live the sooner all those nefarious benefits they promised the client will start to accrue. A
long process is perceived by the client and vendor alike as expensive (I’ve been through some very expensive “easy” installations), disruptive and hardly worth the trouble. Forget talking about
data quality, for example, as part of the migration plan. Data quality seems like a luxury to small businesses – sort of like what power windows and air conditioning used to be in automobiles
(never mind how old knowing that makes me). But most experts in DQ will tell you that it should be the single most important aspect of any significant application and/or data migration project. To
ignore the quality of the information collected, analyzed and distributed is to insure the survival of the very conditions that lead most small business owners and executives to seek the new
technology in the first place.

It is highly unlikely that the tool vendors are going to suggest the primacy of DQ, particularly because of the likelihood that their project will be made more complicated and, therefore, take much
more time to complete. Some vendors look at the SMB market and see only the “retail” characteristics of the members – meaning they think the market only wants to get in and get out without
browsing. The vendors, therefore, are somewhat disinclined to recommend anything that might interrupt this rapid turnaround. To some degree I think they’re correct, but probably not for the same
reasons. I think the small business owner would be open to discussing data management issues if they could be shown, in a clear and straightforward way, what the true impacts of not acting will be.

Data management challenges are really more risky in a small company than they are in a big one. It comes down to a matter of scale. In fact, it could be argued that smaller firms are likely to be
impacted more significantly by issues of data quality, data access, data migration and the like because they don’t have as deep a capacity for absorbing customer and product miscues as their
behemoth brethren. Losing a customer worth $100K of revenue because of poor data management practices hurts a lot more when your total revenue is $5 – $10 million than it does when your revenue
figures are counted in the billions.

So are SMBs doomed to eternally mismanaged (or at least poorly managed) data? Many likely are but, thankfully, they don’t have to be. Any problem, regardless of scope, can usually be solved
through adaptation and derivation of established solutions. So it is true in this case as well. Small businesses can’t be expected to stop what they’re doing to suddenly tack and become
“data-centric” thinkers so the vendor community has to develop strategies and solutions that plug in to the ways in which small companies work. This means software and hardware products that are
less complicated to install and integrate than those being offered to a large firm. Upgrades must actually offer real value instead of simply easier support means for the vendor. New delivery
options are required such as managed services or collocation models that are sensitive to the unique needs of smaller volumes (and therefore smaller expectations of costs). This isn’t rocket
science – these kinds of solutions are readily available now more than anytime in the past. They need to be appropriately “sized” for the capabilities and concerns of the SMB market.

Whether the functional requirement is CRM-based, accounting or other back office processes, production oriented technologies or electronic marketing, the need for soundly managed data is always at
the core. This is true in big businesses and small. It is crucial that industry gurus and recognized thought leaders devote some of their time and attention to helping the leaders in the SMB market
to understand that there is a problem for them to be concerned about and that there are also solutions available that they can live with (and prosper from). The opportunities are endless for
clients and vendors alike to forge new answers to seemingly intractable problems. Let’s get moving!

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Jeffrey Canter

Jeffrey Canter

R. Jeffrey Canter is EVP, Global Marketing and Operations, at Innovative Systems, Inc. He oversees research and development, product management, global marketing and communications, and client service and support.  Since joining Innovative in 1990, Canter has applied his business and technical expertise to the successful development of customer information projects for clients in a variety of industries, including financial services, hospitality and telecommunications.  Prior to his current position, he served as senior consultant and director of R&D for the company.  Canter is a regular speaker and author on topics related to managing and integrating customer data.

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