Why it pays to be business intelligent
Posted by Kevin O'Callaghan on 7-Aug-2009 - Filed under: IT Consulting , also relevant to: business intelligence, Data Solutions, decisions, IT, microsoft, oracle, sales, sap, savings, sql - 4 Comments
Costs and savings are always two big factors in running a business and at the moment with economic uncertainty they take on more importance. With so much emphasis on financials, many organisations are delaying IT projects until their balance sheets become sounder. However, now may be the best time for companies to invest in business intelligence to gain a competitive and strategic edge.
If you’re unfamiliar with business intelligence, here’s a quick introduction. Business Intelligence or BI as it’s often abbreviated, allows a company to analyse and understand its performance by giving a detailed picture of what is going on in terms of its business and customers. It’s a growing area for many businesses and a recent Butler report urges many companies not to put off implementing a business intelligence solution.
But what exactly does BI try to answer? Well, it can be anything. Are you querying why your budget is being overspent in one department and under spent in another? Or worse, are now realising that you had a budget and now it’s gone? Could your sales revenue be growing in one country but not as profitable in another? Is your most profitable product now seeing a slowdown in sales or is your new product outselling your other lines? Do you have an acceptable level of returning customers?
Questions such as these are the essence of business intelligence. A recent Gartner report found that because of a lack of information, processes and tools, more than 35% of the top 5,000 global companies will regularly fail to make insightful decisions about changes in their business and markets. BI is there to plug that gap and allow business to make such decisions and to analyse trends over both a short and long term basis and be better prepared for where their markets will take them. For example, knowing whether your product sales dip in a particular country during the summer months will allow you to determine how much effort – and cost – should be allocated to that area during the time. Do you increase or decrease your marketing campaign? Do you hire more staff in that region or redeploy existing staff until sales pick up?
That’s what business intelligence sets out to achieve and at its most basic, it provides all of your data in one central source, thus allowing for faster more informed decisions and more effective planning.
Having one central source of data is your starting point. But trusting your data is key to successful business intelligence. With many data sources within a company, IT departments need to ensure that all sources of data are aligned and accurate. In many companies, different versions of the same data are scattered between departments. Sales teams will have their revenue figures and financial departments will have their own set of that revenue data. Ensuring they line up correctly and validate against each other means you can trust your data and then start making more informed business decisions. In a future post, we’ll look at the ways of storing your data and the transformation tools available to ensure your data is valid and consistent.
Whilst business intelligence is ultimately a decision based on large amounts of data, it needs to be stressed that it is more than just a series of Excel spreadsheets with sums and averages aligned against cost centers. BI allows you to dive into your business data figures and really understand how your business is operating and add context to items such as your budget and to be prepared for the future and to forecast more accurately.
However, BI is not just an IT department problem. For it to work, all departments within an organisation need to work closer together. While IT will provide and support the necessary infrastructure, it is up to each department to contribute and define the various business rules that will determine how successful the company will be. Understanding where areas of data duplication, missing data, corrupted or just incorrect data occurs is necessary to help make those critical decisions. IT may understand the technical need, but only those working in their department know what their business needs are.
So where to get started? If you haven’t launched a BI solution, the chances are you’re well on the way to one. Microsoft, SAP, Oracle, MySQL, IBM all provide BI tools and database solutions, but as is often the case in the IT world, there’s other low cost options, with many open source BI tools such as Eclipse, MicroStrategy, JasperSoft and Freereporting available to try out.
Determining which option is right for you is a decision we could write many posts about, however VIA here to help with your business intelligence solutions. In future posts we’ll take a look at some of these applications and how best to protect your data through data transformations and data reliability, we’ll also look at where problems with data integrity can occur.
What did you think? We'd love if you would leave your opinion in a comment below, or contact Via directly.
4 Responses to “Why it pays to be business intelligent”
commented on 7, Aug, 2009 at 6:09 pm
Kevin,
I’m a believer in businesses focussing more on their information and less on the ‘nuts and bolts’ of IT (which can often be outsourced). Knowing the customer, understanding trends, even external data such as market/competitor intelligence arms companies better for business success. This is where the action is in my view.
well done on this post .
Joe
commented on 11, Aug, 2009 at 1:25 am
Hey Kevin, good post, these are indeed challenging times, and when challenges are placed in front of us they push us to strive for intelligent and simple solutions. It will be interesting to hear how to determine the important data from the less important data (or is it all important?). Will you discuss how potentially data can be used to prove many different points? or sway our opinions to suit the data gatherer/presenter? Essentially, how can we provide a way to make the data presentation unbiased?
Keith
commented on 11, Aug, 2009 at 4:06 pm
Hi Keith -
I think you could coin the phrase ‘all data is important, but some data is more important than the other!’.
But I agree, you can use data to prove so many points and it’s a discussion we’ll have in a future post.
Data can prove anything, but how that data fits into the context of the business and it’s business rules is the key.
Business should define the rules to ensure success, but it should always be aware that rules can and will change.
An example would be to say that my product, Widget A is not selling as well and now, Widget B is my most successful product. I can show that the Widget B sales are higher than Widget A. Therefore I recommend that the business drop Widget A. But, perhaps the reason why Widget A’s falling sales is down to the business not being able to manufacture enough stock, get parts or ensure delivery to its customers. Widget B’s sales are up, but if you resolved the problems with Widget A, then perhaps your best seller will be your best seller again.
It’s back to those business rules and ensuring that the business, collectively, is aware of all possible triggers that it is influenced by and knows how to respond.
Thanks for your comment – and pre-empting another post when I’ll attempt to object orientate a business structure and put those pieces together with some B.I. logic!
Kevin
commented on 5, Oct, 2009 at 3:57 pm
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