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By Jason Dove
This article will answer your question: Why Business Intelligence?
Unlock your company's most valuable resource with Business Intelligence.
Remember IT? Information Technology? It seems many businesses forgot that the computer age was supposed to be about information and efficiency.
Instead, the entire computer industry became about the collection of data for its own sake.
In recent years the concept of Business Intelligence (BI) has evolved, and as a result, many managers have been reminded why they were collecting all of this data in the first place.
As a manager, you should be able to ask any question about your company operations and be provided with a clear answer from the information held on your computer systems:
* Seasonal sales figures
* Bulk buying trends
* Geographical spread of customers
* Staff efficiency and performance
* Advertising campaign effectiveness
* And any other process analytics
If you cannot, you are making decisions in the dark.
Business Intelligence is the torch that can light the way.
Back in the mid 90's Joe's Garage installed a computerised records system. This was nothing flash a stand alone PC installed with some basic business software, which came free with a magazine, and records customer details, sales and stock.
Joe has been dutifully entering every customer and transaction for fifteen years.
Big Companies use Business Intelligence
While the world's largest organisations have invested heavily in Business Intelligence, and are busy reaping the rewards, the majority of businesses are reminiscent of pirates burying hoarded treasure and never spending it, and in some cases, forgetting that it is there at all.
You already sort of use Business Intelligence
Most companies gain benefit from the tiniest amount of BI which exists by default within their business software process analytics.
Something as simple as checking a customer's payment history before agreeing credit is an example of BI at work.
Unfortunately, extracting more complex information is beyond the capabilities of most business software.
Joe only uses his customers' contact details when he needs to inform them when their required parts have been delivered.
One day, Joe buys a pallet of oil at a bargain price and realises he can offer cheap oil changes.
Unfortunately, his computer system cannot provide him with a list of customers who have not purchased an oil change in the past year.
Databases, the Hidden Treasure
For each of the little clues that your current business software imparts, there is a wealth of hidden treasure buried deep in your data records.
Do a large percentage of your customers always buy a particular add-on purchase with their main order? And the customers who don't - are they aware that this add-on is available?
Does your current software answer this question?
The answer to these questions (and many more) can be found in the information already stored in your company database, and extracting these answers is the heart of Business Intelligence.
I have worked as a BI specialist for over a decade, and on every, EVERY, assignment I have undertaken I find managers surprised by the wealth knowledge they have collected through the course of normal business, and how interrogating this information can move their business in a positive direction.
Undeterred, Joe spends all of his evenings and two weekends manually looking through each record on his database.
By the end of this tedious process, he has a list of thirty customers who have not changed their oil in twelve months or more.
However, as Joe was scouring the last few records, he identifies another pattern - an oil top-up is included as standard in every car service. He realises that offering free oil top up could entice more profitable work into his garage and, if advertised, could also attract new customers.
To find out which customers to target, Joe must begin his manual search again.
Unlocking the Treasure Chest
The basic premise of Business Intelligence is to utilise a range of reports to access the company database and then analyse the available data in order to provide clear and concise information which meets the decision maker's requirements.
Most business applications, whether off the shelf or bespoke, have a basic set of reports included. These vary in usefulness from package to package, and a comprehensive set of reports for one business maybe completely useless to another.
These reports are usually developed by a general programmer with no BI expertise and certainly no knowledge of your business or the process analytics you require.
To make up for this short fall in reporting accuracy, some products offer a limited set of tools which allow data to be extracted into a spreadsheet.
However, this only produces a boundless mixed up mass of data to be picked through, in an alternative format. Spreadsheets do have a raft of helpful tools, but are the wrong application for this job and can make even the simplest of tasks very time consuming and prone to error.
Obviously the ideal way to access your valuable data resource is to create reports which group data together in common ways and compare various results.
This can be anything from seasonal sales figures for a particular product to identifying the most efficient person in a call centre. During my BI career I have worked on projects to optimise performance and streamline processes for everything from selling paint to counter-terrorism.
Knowing What to Look For
Although Business Intelligence is a skill in itself with its own experts, your company's biggest asset is its own managers and staff. This fact is often overlooked, and is the reason why a lot of BI implementations fail, as external experts build a library of information which they alone have determined the requirement for. The end result is an elegant suite of Business Intelligence reports which do not answer any of the pertinent questions being asked by the management.
Having an accurate description of the goals and desired outcomes for each project is a crucial factor.
These not only vary from organisation to organisation, but are also dependant on the wider circumstances.
For example, identifying the most successful sales rep for bonuses during good times is an entirely different proposition to identifying the least productive sales rep during a lengthy period of slow trade.
Once you have an idea of what you need, the next step is to ensure that your business has been recording the data on which to base this decision, and identify whether the information has been recorded accurately and consistently.
This can be an involved job in itself, but any good BI consultancy will offer this as a separate evaluation as one of their base services.
Despite Joe's limited funds, he decides to invest in a BI expert for a week's work to obtain a prescribed list of information which he feels he can quickly profit from.
The BI expert does his job well - he takes care to communicate in a consistent exchange with Joe, provides exactly what is required, and even proposes some additional ideas based on some of his past experience.
Joe sells some oil at a discount price, but after looking at the result of the BI reports, it is apparent that his idea to offer the oil as a free gift alongside other services will be a far more cost affective use of the oil.
How to Make the Most of BI
Even for companies with a high IT skill level, it is often beneficial to hire a BI expert for at least some of the implementation.
A good BI consultancy will offer guidance every step of the way and not just try to sell consulting hours or software before knowing exactly what it is your business requires.
Purchasing a two day consultancy to ensure feasibility and identify the various options available is a worthwhile move which lays a solid starting point for both parties.
To those new to Business Intelligence it may seem like a huge task to implement a system like this from scratch. However, there is a solid advantage to having a fresh start with a clear vision - too many of the implementations I have been involved with have had to cater to previous versions of BI which were more trouble than they were worth.
Also, many BI implementations are huge and sprawling, attempting to cover entire companies in one swipe. Bigger BI implementations can lose focus and produce process analytics for their own sake without a clear business requirement.
Far better results are achieved if implementations are split into small, well focused projects. Splitting work by department is good, implementing one logical BI area at a time is even better. Obtaining details for a focused advertising campaign is a good start to examining what BI has to offer, as is implementing a staff rewards scheme based on an accurately measured set of performance attributes.
Keeping the area of interest small initially is a good way to demonstrate the positive impact that BI can have on any organisation.
With the extra income generated from the BI guided oil sales / offers, purchases some more oil and rehires the BI expert to produce a report to be run daily. This report takes the form of a letter offering a free oil top up addressed to all customers whose cars are due for service within the next two week period.
Times are rough financially, and Joe's focused advertising has a high take-up rate as people search for bargains. This provides a steady stream of extra income at a time when other garages in the area are struggling.
Joe has also started to wonder about lost customers, and so requests a report to highlight all customers who have not visited his garage in over two years, what was the last job done for each, the time taken to carry out the job and the average time taken for each type of job.
The results shock Joe as it is now apparent that the wheel balancing jobs done by his apprentice Steve take twice as long as they should and are apparently responsible for 70% of the lost customers.
Joe responds by sending Steve on a two day wheel balancing course and sends out letters to these lapsed customers offering 10% off any other service they take with his garage within the month.
Business Intelligence is a great tool for aiding decisions and evaluating effectiveness of advertising, new working practices and staff performance. Utilising just a small part of the broad spectrum of advantages BI has to offer can revolutionise your company.
Can you afford not to have BI working for you?
Jason Dove ( Jason.dove@scry-business-intelligence.com ) is author of 'Crystal Reports Formulas Explained' a step by step guide to creating and using formulas for the industry leading BI reporting software.
He has provided BI consultancy for some of the largest companies in the UK, and is now working with Scry Business Intelligence to bring benefits of Business Intelligence to SME's.
Read his free start guide to Crystal Reports at http://www.scry-bi.com/shop/detailsStartGuide.php
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