The Case for Business Intelligence

The Case for Business Intelligence

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According to Gartner, business intelligence (BI) revenue is set to reach more than $17 billion by 2016. That’s because there is a drive to enable the entire organisation with fact-based decision-making tools, rather than just a few stakeholders.

Globally, organisations across all industries are embracing solutions that aid them in converting information into intelligence.

SMEs need to rise to the occasion and take advantage of the opportunities that BI represents. That’s the word from Nick Bell, CEO of BusinessIntelligent, a provider of business intelligence and application development solutions in South Africa.

“With the global economy in the state it’s in, companies need to make the right decisions the first time,” says Bell.

“They cannot afford to be reactive because their competitors will step in and take control of the markets they play in. To improve competitiveness, they need to enable their people to make better quality decisions – that is what BI is all about. It makes a business predictive, proactive and informed.  BI deployments aid revenue growth and foster competitive advantage.”

Bell says the uptake of BI in the smaller and mid-tier space has been sluggish in South Africa because it’s still misconstrued as being too expensive. However, companies that value information and organisational insight are seeing the opportunities that BI has to offer and they are willing to invest in decision-making tools.

Business analysis first

The process should always start with business analysis ­– defining needs and recommending solutions that deliver value to the organisation. This is a specific skill that is usually best brought in from outside the business.

 

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It involves locating all the master data, which is information that is key to the operation of a business, fetching it and making it more accessible through technology like dashboards.

An in-depth understanding of the business identifies what drives the specific organisation, and what is needed to make improvements and ensure competitiveness.

A business intelligence dashboard, which is really a data visualisation tool that displays the current status of metrics and key performance indicators (KPIs) in an organisation, consolidates and arranges numbers and metrics on a single screen.

They may be tailored for a specific role and display metrics targeted for a single point of view or department. The essential features of a BI dashboard include a customisable interface and the ability to pull real-time data from multiple sources.

Then actionable data

One of the issues impacting the availability of information in the organisation, says Bell, is that most systems – like ERP, CRM and accounting, for example – are designed with processes in mind, not reporting. They contain data, but they are not designed to empower users with information.

“BI leverages the strength of your existing systems and gives you the power and the capability to turn that data into actual information. If you have determined where you want to take your business, BI reports can enable you to achieve those goals by enabling you to understand what you need to do to get there.”

It gives the business the ability to answer a question like what do we need to do on a daily, weekly or monthly basis to drive revenue? When it comes to your team, they can get access to information that will change the way they think about the business.

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Improving efficiency 

Bell had a customer in the packaging industry who wanted to improve the efficiency of the picking line. Of all warehouse processes, order picking tends to get the most attention as the cost associated with picking is a big chunk of the total warehouse labour budget. Another reason for the high level of importance placed on order picking is its direct connection to customer satisfaction. The ability to quickly and accurately process customer orders has become an essential part of doing business.

Key objectives in designing an order picking operation include increases in productivity, reduction of cycle time, and increases in accuracy.

Productivity in order picking is measured by the pick rate. In Bell’s customer’s case, providing reports on productivity for the people in the pick line would not have been appropriate.

“Instead, we completed a business analysis exercise and then used the information to build a visual solution. We placed TV sets in the warehouse which broadcasted workloads and performance levels of teams and individuals during each shift, and used these figures to set bigger targets. The warehouse was transformed into a competitive environment, in which teams and individuals were challenging each other to do better. Within a month, performance had doubled.”

That was achieved simply by being able to access the correct information – if you know how many items or cases are being picked every day, and how many have to be picked in order to double or treble productivity, you have a goal to work towards. The end result is vastly improved efficiency, leading to lower costs and higher profitability.

Bell says that when a business takes the opportunity to look at the costs of BI versus the return on investment, it ceases to be a grudge purchase. “People are shocked when they realise the massive value and performance optimisation that BI can yield.”

Empowering employees is key

Business-intelligence_Innovation-in-business

There’s another aspect to BI that should make business owners sit up and take note. Many smaller and mid-tier companies fail to empower their employees with information. Often, critical business information is the preserve of a select few – usually the owners and a couple of other people at the top.

“Rolling out a BI solution that gives the right people easy access to data and key reports has the effect of empowering more people in the business to make an impact. Again, it’s an exercise that reduces the cost of insight and the speed to access, while improving business processes.”

Bell explains that without BI, companies tend to drown in information, while being starved of intelligence.

“Data is redundant unless it can be analysed and converted into understanding that drives fact-based decisions. In today’s organisation, insight creation as well as decision-making is not just dependent on an individual or a department. Every member is an integral part of this process. With this shift in the organisational landscape, it becomes imperative that everybody is able to not only get the data, but also to analyse, slice and dice it, and collaborate that information within the organisation.”

This democratisation of data demands that you have the tools and solutions in place that can easily be understood and used by everyone.

Business users want BI tools that empower them, letting them get what they need rapidly and precisely, Bell stresses.

BI solutions make it possible for all users to gain business insights by understanding how data is associated, and enabling users to conduct direct and indirect searches across all data, anywhere.

“BI allows people to make sense of data so that they can make better decisions faster. It’s a business solution area that is growing rapidly across the globe because companies are seeing it as an imperative,” he adds. “In today’s economy, there are no margins to waste.”

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Small & mid-sized  starting to gain the intelligent edge

Small and mid-size businesses are often more agile and closer to their customers than their larger counterparts, which gives them a BI advantage.

A recent report from BI analyst Dresner Advisory Services, the 2013 Wisdom of Crowds Business Intelligence Market Study, found that SMEs have some unique characteristics when it comes to how they leverage BI.

One key finding: When compared to large enterprises, SME BI initiatives are more likely to be driven by executive management and the sales function.

“SMEs have the advantage of agility and the ability to use BI as a competitive differentiator,” says Howard Dresner, chief research officer at Dresner Advisory Services.

“Because of the closeness of executives to the technology, business and customers, they have an edge against larger competitors. While larger enterprises may have an advantage when it comes to BI resources, SMEs tend to face fewer operational challenges than their large competitors.

“Larger organisations get bloated with bureaucracy and process, forcing them to focus BI upon efficiency,” says Dresner. “In contrast, smaller enterprises are, by definition, more efficient and can focus externally – enabling them to take market share from larger players.”

Dresner says SMEs are able to execute quickly to achieve meaningful results. They did not report the same length of BI experience as larger enterprises. This is not surprising, given that BI vendors initially focused on larger enterprise customers in client-server environments.

The report found growing interest not only in SaaS, but also in mobile device support and dashboards. These are trends that Dresner expects will continue.

“SMEs tend to be more nomadic than their larger counterparts, so mobile is very natural for them,” he says.

“Cloud is also a natural fit, which goes hand in glove with mobile – enabling readily-implemented and consumed solutions at a price point that enterprise software can’t approach. And everyone loves dashboards.”

Monique Verduyn
Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.