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Business intelligence (BI) is
a business management
term which refers to applications and technologies which are used to gather,
provide access to, and analyze data and information
about company operations. Business intelligence systems can help companies have
a more comprehensive knowledge of the factors affecting their business, such as metrics
on sales, production, internal operations, and they can help companies to make
better business decisions. Business Intelligence should not be confused with competitive
intelligence, which is a separate management concept.
A few examples of everyday business intelligence:
-
Inbound phone call count drops below X; where X is the
average necessary to maintain sales....
An email is sent to a key manager in charge of marketing
operations. The manager determines if there are marketing actions that
changed the inbound call count. This notification sets in place an
investigation that may have never been noticed or best.... noticed after
sales dropped 25%.
-
Warranty Expiration occurrence:
This example company has 5000 warranties to monitor, what are the chances
that anyone is looking ahead enough to catch expiring warranties?
This defined operation will perform multiple tasks such as sending a
friendly reminder to the customer/owner explaining the expiration date and
how that could affect them; direct the customer to a
re-registration/purchase renewal site, etc. But, in addition a call
will be put on a customer service persons calendar.
-
The regional sales manager wishes to receive sales forecast
reports on a weekly basis.
Task Centre can be set to gather the sales forecasts from the CRM system,
format the data into an organized pre-defined format and distributed to each
sales person, the regional sales manager and any others who have need to
know.
Imagine how this "automatic" distribution can save costs, increase
database usage by the team and instill urgency of timely and accurate
forecasts.
-
Web site customer inquiries.....
Sure many businesses have website inquiry forms but how many respond within
24 hours or for that matter ever?
Task Centre can be setup to parse ("look at the content") inbound
E-mail and determine if there is content which needs to be acted upon.
Not only does it look at the content, it reacts intelligently and promptly.
As an example: Jon Doe fills in a form asking for literature to be
sent about a widget - it's Saturday morning by the way! When Jon
presses the submit an email is formatted and sent by the website code to a
predetermined "person" or department at ABC Company.
Manual system response: Wait two days? Hope
"person" checks email on Monday morning and notices that it is a
website request. And, hope that "person" values those
requests more than the morning coffee.
Task Centre response: Within seconds Task Centre receives the email,
sees that it deserves a response, finds the reference to the widget
literature, locates the response literature on the ABC corporate network,
prepares the response to Jon Doe, e-mails it and a "how did we do"
link. Not to leave the human out of the loop, Task Centre schedules a
follow up activity in a CRM system for the "person" in the
office. Just to ensure that "person" doesn't fail or drop
the ball, Task Centre sets itself a reminder to look and ensure that
"person" did his/her piece. If he/she fails or delays, Task
Centre can react and handle as defined.
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There are many tools used to gather, format, and analyze
business intelligence. These tools come in various languages, versions,
formats and costs. There are general purpose tools and industry specific
tools.
We recommend only a few tools to start with. A spreadsheet
package such as Microsoft Excel is the layman's analysis package. Although
somewhat automated, Excel requires that the user know when to look, what to
analyze and who to distribute such information or analysis to -- Too much human
input needed, doomed to failure!
The primary tool we recommend is a self running software that
will "Tell you when your benchmarks are reached". Our premier
package is a product called Task
Centre. Another optional product we offer is KnowledgeSync where
Task Centre may not be appropriate.
With Task Centre, one defines the queries, triggers, data
conditions, important points, key performance indicators (KPI's) and other
benchmarks that are meaningful. Once defined, the system watches on a
constant or scheduled basis. When a benchmark is recognized a number of
resulting operations can be set into motion.
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Business intelligence (BI) is one of the many tools we need to
know how to operate within our business paradigm. Let's look at a bit of BI history.
Sun
Tzu's The
Art of War highlighted the importance of collecting and analyzing
information. Sun Tzu claimed that to succeed in war, a general should have full
knowledge of his own strengths and weaknesses and full knowledge of the enemy's
strengths and weaknesses. Lack of either one might result in defeat.
Prior to the start of the Information
Age in the late 20th
century, businesses had to collect data from non-automated sources.
Businesses then lacked the computing resources to properly analyze the data, and
as a result, companies often made business decisions primarily on the basis of intuition.
As businesses started automating more and more systems, more and
more data became available. However, collection remained a challenge due to a
lack of infrastructure for data exchange or to incompatibilities between
systems. Analysis of the data that was gathered and reports on the data
sometimes took months to generate. Such reports allowed informed long-term
strategic decision-making. However, short-term tactical decision-making
continued to rely on intuition.
In modern businesses, increasing standards, automation, and
technologies have led to vast amounts of data becoming available. Data
warehouse technologies have set up repositories to store this data. Improved
Extract,
transform, load (ETL) and even recently Enterprise
Application Integration tools have increased the speed of collecting the
data. OLAP
reporting technologies have allowed faster generation of new reports which
analyze the data. Business intelligence has now become the art of sifting
through large amounts of data, extracting pertinent information, and turning
that information into knowledge upon which actions can be taken.
Business intelligence software incorporates the ability to mine
data, analyze, and report. Some modern BI software allow users to cross-analyze
and perform deep data research rapidly for better analysis of sales or
performance on an individual, department, or company level. In modern
applications of business intelligence software, managers are able to quickly
compile reports from data for forecasting, analysis, and business decision
making.
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Business intelligence often uses Key
performance indicators (KPIs) to assess the present state of business and to
prescribe a course of action. Prior to the widespread adoption of computer and
web applications, when information had to be manually inputted and calculated,
performance data was often not available for weeks or months. Recently, banks
have tried to make data available at shorter intervals and have reduced delays.
The KPI methodology was further expanded with the Chief
Performance Officer methodology which incorporated KPIs and root cause
analysis into a single methodology.
Businesses that face higher operational/credit
risk loading,
such as credit
card companies and "wealth management" services often make KPI-related
data available weekly. In some cases, companies may even offer a daily analysis
of data. This fast pace requires analysts to use IT
systems to
process this large volume of data.
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When implementing a BI program one might like to pose a number
of questions and take a number of resultant decisions, such as:
-
Goal Alignment queries: The first step determines the
short and medium-term purposes of the program. What strategic goal(s) of the
organization will the program address? What organizational mission/vision
does it relate to? A crafted hypothesis needs to detail how this initiative
will eventually improve results / performance (i.e. a strategy map).
-
Baseline queries: Current information-gathering
competency needs assessing. Does the organization have the capability of
monitoring important sources of information? What data does the organization
collect and how does it store that data? What are the statistical parameters
of this data, e.g. how much random variation does it contain? Does the
organization measure this?
-
Cost and risk queries: The financial consequences of
a new BI initiative should be estimated. It is necessary to assess the cost
of the present operations and the increase in costs associated with the BI
initiative? What is the risk that the initiative will fail? This risk
assessment should be converted into a financial metric and included in the
planning.
-
Customer and Stakeholder queries: Determine who will
benefit from the initiative and who will pay. Who has a stake in the current
procedure? What kinds of customers/stakeholders will benefit directly from
this initiative? Who will benefit indirectly? What are the quantitative /
qualitative benefits? Is the specified initiative the best way to increase
satisfaction for all kinds of customers, or is there a better way? How will
customers' benefits be monitored? What about employees,... shareholders,...
distribution channel members?
-
Metrics-related queries: These information
requirements must be operationalized into clearly defined metrics. One must
decide what metrics to use for each piece of information being gathered. Are
these the best metrics? How do we know that? How many metrics need to be
tracked? If this is a large number (it usually is), what kind of system can
be used to track them? Are the metrics standardized, so they can be benchmarked
against performance in other organizations? What are the industry standard
metrics available?
-
Measurement Methodology-related queries: One should
establish a methodology or a procedure to determine the best (or acceptable)
way of measuring the required metrics. What methods will be used, and how
frequently will the organization collect data? Do industry standards exist
for this? Is this the best way to do the measurements? How do we know that?
-
Results-related queries: Someone should monitor the
BI program to ensure that objectives are being met. Adjustments in the
program may be necessary. The program should be tested for accuracy, reliability,
and validity.
How can one demonstrate that the BI initiative (rather than other factors)
contributed to a change in results? How much of the change was probably
random?
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Will I need to become a "technical engineer" to use the tools?
In most cases, our process engineers and business intelligence
specialists are available to implement and train your team on the tools and
terminologies involved.
We find that with a few hours of direct training with your
analysis team members, we are able to put your team in a position to understand
the KPI's, the external factors and finally the tools. It is especially
important that we train the responsible analyst to interpret the data in a
manner that is meaningful to the business plan and growth goals.
Like any software or technology, training and understanding of
the "Why" is critical. We ensure that the "why" is understood without
question or doubt.
If you are ready to understand the "Why and How" of growing your
business, Contact us today.
Every day you wait allows your competition to gather your
successes.
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Major portions of this article is licensed under the GNU
Free Documentation License. It uses material from the Wikipedia
article Business intelligence.
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