Before inviting the first Business Intelligence (BI) vendor in to give a pitch, CIOs at a small- or mid-market company should ask themselves one question: How will my organization use the data that a BI application will provide?

Organizations answer that question in one of two ways, says Leslie Ament, practice leader and director of customer intelligence research at Aberdeen Group. And the way you answer that question will direct you toward the type of BI investment you may want to make.

Some organizations plan to use business intelligence to support strategic decisions, such as developing new products or corporate performance management initiatives. Others may want to use the data for operational decisions, such as for sales, marketing, customer service, procurement or production. Little more than half of all organizations that use BI do so to support strategic decisions, according to Aberdeen. The two most widely supported business activities for which organizations use BI are sales and business development, and customer support.

Whether you use BI for strategic decision support or to streamline operations, either approach is valid. Recent vendor product offerings mean it doesn’t have to be expensive, with some applications costing in the mid-five figures. "Small- and mid-market players believe that BI has a high cost point for entry and that you need a lot of horsepower," Ament says. "That’s not necessarily true."

BI applications are becoming less expensive because vendors are introducing scaled-back versions that don’t require so much computing power. Cognos, for example, last year introduced its Cognos 8 BI application, which provides organizations a chance to choose different levels of offerings.

For strategic decision support, Ament recommends looking into BI platforms. Vendors offering these services are Business Objects, Cognos, Microstrategy, Oracle/Siebel, SAP, SAS, SPSS and Teradata. SAP, SAS and Teradata work with indirect partners in providing solutions to the mid-market, Ament says.

To support front-office activities, she suggests operational reports and/or dashboards by Maximizer, NetSuite, Sage, SAP, Siebel and Salesforce.com. All except Maximizer offer lower-cost Web-based applications specific to the small and mid-market. However, says Ament, "These are not pure-play BI platform vendors. They are CRM application vendors that provide operational reports and dashboards specific to marketing, business development/sales and call center activities."