A large volume of data like profit and loss statements, cash flow statements, sales analysis reports and other commonly generated reports, when handled properly can lead to big positive changes. There has been a trend in the last few years where large corporate organizations have been turning to business analytics, CPM and Business Intelligence tools to increase operational efficiency and making solid evidence based business decisions. Forecasting sales and using predictive analysis has helped many organizations gain a competitive advantage in their respective industries.
Business analytics is definitely a powerful tool when properly handled. However many organizations have invested into it but not reaped the benefits. Why would this be?
Contrary to popular belief, Business Intelligence on its own or Business Analytics on its own doesn’t really deliver the desired results. It is naïve to think otherwise. It is quite easy to get deceived into thinking good progress is being made because any one component on its own does give you some valuable information, which you didn’t have before. It gives you an impression that you have gained some insight into something you didn't know before, but doesn't help you translate that information into strategy. What does work however is a combination of Business Intelligence, Business Analytics and Corporate Performance Management.
Business Intelligence: To enable organizations make better decisions with more ease, speed and accuracy, you need to collect, integrate and analyse information at the enterprise level. You also need users to have the freedom to explore, interact with information easily and effectively in a simple drag and drop methodology without the need to know coding or complex algorithms. This is Business Intelligence.
Business Analytics: Numbers are not just figures. They speak to you. They carry a message. And often times, these messages are critical and determine the future of a business. If you can discern it and exploit the most sophisticated statistical techniques and get predictive insights from data, it is powerful to help you make evidence based business decisions. This is Business Analytics.
Corporate Performance Management: You need to be able to simulate, monitor and plan the potential impact of your decisions on company performance, effectively linking your core decision making processes from strategy formation to financial control, from profitability analysis to sales and operational planning. This is Corporate Performance Management. It’s the combination of all of the above that puts you in the lead. We like to call it Management Intelligence.
However, how do you know if you are ready for a system such as this? Hopefully these pointers can help you.
Do you have company data to work with? •Firstly it is essential you have enough relevant and trustworthy data about your company. Are your financial reports and sales figures fairly dependable? In most cases, if you are using an ERP of any sort, you should probably have enough data. Some other organizations have their data on Excel sheets, which is fine too as long as your data is dependable. Without having dependable and enough historical data, it is not worth investing in a Business Intelligence tool. Building meaningful data can take many man hours and hence you should probably budget 40% of your IT budget towards establishing a meaningful database. It can even make sense to outsource this task to organizations specializing in ERP and Data Warehousing solutions.
What do you want to discover from your data?
Have you thought about what you will be using your Business Intelligence software for? Usually organizations look to a Business intelligence solution to solve an existing problem. You need to know that problem. What are you trying to solve? Just collecting data, analysing it and not having a goal will be counterproductive. Consider areas in your organization where the current process isn’t as efficient as you would like it to be. Eg: Do you want to gain insight into your income and expenses patterns? Do you want to make changes to your budget on the fly and be able to forecast the implications 6 months down the line? Writing down the problems you are trying to solve before investing in a Business Intelligence tool, will help you select the right partner for your organization.
Do you have a Data Analytics person?
Most Business Intelligence solutions still require intense user interaction and management. It would help if you had a data analyst type person or someone with the required skill set on staff. Without having a designated person capable of working with your data, you might not fully exploit the potential of your Business Intelligence solution. There are some solutions which are extensively Excel driven. If you are an Excel guru and do not struggle working with multiple spreadsheets and complex formulas, then these BI tools are fine. BI360 is one such tool. A great BI tool, if you are good in Excel. However, if you are looking for a simple drag and drop application with very basic knowledge, there is one very good All In One solution which doesn’t require any coding or advanced data analysis skills. Any user can easily build dashboards and analyse data with minimal skills. It even works on iPads and Windows 8 tablets. Its called BOARD. Check it out at www.board.com.
Do you have a budget for a Business Intelligence Software?
At this point, I assume you have a fair understanding of your current situation, your goal and your strategy to get there. You probably have also identified the problem you want to solve. Now it’s time to go shopping. Make a few calls. The prices vary a great deal depending on your needs. Some vendors offer complete end to end solutions which can be good for a large organization. There are other vendors who offer software licenses per named users or even based on monthly subscriptions. Usually a typical Business Intelligence tool doesn’t cost much. It’s the implementation and consulting that costs. Also as mentioned earlier, try and choose a solution that is a combination of Business Intelligence, Business Analytics and Corporate Performance Management. Because any single solution on its own will rarely deliver the required results. Try and choose a solution that is end user driven, DIY and with very minimal consulting requirements.
Finally, are you ready to act?
To make all of this worth it, you have to be prepared to act quickly and decisively. You have identified your problem, invested in a great tool and have new found insight into your company data. You now have the knowledge necessary to effectively change operations in your organization. You have gained valuable insight into the foreseeable future through predictive analysis. This is where a combination of Business Intelligence, Business Analytics and Corporate Performance Management helps.
Its time to strategize and execute so that you can get to your goal. Try and stay focused on the goal at all times. The BI tool is a tool to help you get to your goal. Not a software that magically takes you to your goal.
1. Set your company goal. Eg: Increase profitability by 25% in 12 months.
2. Identify problem from data perspective. Eg: I do not know revenue patterns or customer spending patterns.
3. Go shopping. Try and look for a BI tool with minimal consulting requirement. A DIY tool will probably work out best for you on the long run, even though it might cost slightly higher upfront. You will save lots on ongoing consulting and report building needs.
4. Analyse data, Create live dashboards, Make changes on the fly, Predict future implications, and strategize.
5. Execute.
These are some of the world renowned corporates and early adopters of Corporate Performance Management, Business Analytics and Business Intelligence solutions.
NEC PUMA NIKE SYNGENTA PEPSICO DHL ROLLS ROYCE GIORGIO ARMANI ACER DUPONT BASF BATA H&M JOHNSON&JOHNSON
Santosh Chandran is the Business Development Manager for BOARD Management Intelligence at Olympic Software. He regularly blogs about business intelligence and corporate performance management. You can follow him on Twitter or on LinkedIn. Please contact him directly if you would like to find out how BOARD can improve your business results through better decision making, phone 09 980 3964 or email: santoshc@olympic.co.nz
