I am frequently asked questions like, “I get that you’re talking about metrics, but what do you mean by business intelligence?” Let me give SNS’s definition of business intelligence (BI), and break it down for clarity. After all, business intelligence is essentially a new back office function for smaller businesses, so there is a lot to unpack before deciding it is worthy of investment.
Business intelligence is the practice of taking data from a company’s myriad input, systems and using it to provide a clear understanding of key business metrics that drive both day-to-day and big picture decisions.
Ok, I’ll admit it … that’s a lot, but we can break it into a few pieces.
Business intelligence is the practice of taking data from a company’s myriad input systems…
In this piece, we are talking about systems people use to input data like CRM, accounting, manufacturing, expense reporting, etc. A business has many places where data is entered, and figuring out how things are going on the ground – i.e., before financials are impacted – requires pulling information from multiple places and manually smashing it together with spreadsheets. Business intelligence functions can automate the movement of data from those different sources into a single reporting platform like Microsoft Power BI or Tableau.
Business intelligence says that a company can build a system to eliminate manual reporting efforts by automatically pulling information out of many systems and putting it into a single place for reporting.
…and using it to provide a clear understanding of key business metrics…
A company must define its priorities and how the company measures success. Part of the practice of business intelligence is to understand those priorities and metrics, and to deliver always-on reporting (meaning automatically updated and accessible via browser and mobile) to meet them.
Automating these metrics used to require the ability to write software code. Thankfully, “no-code” solutions (like Power BI) have enabled analysts with finance backgrounds to set them up. This change has taken place in the last seven years and is a game changer for smaller businesses looking to establish BI. A financial analyst is a likely candidate to grasp BI concepts like data modeling, which will enable them to enter this world.
Business intelligence defines and delivers key information directly to the people who need it on an always-on basis.
…that drive both day-to-day and big picture decisions.
BI makes data so accessible to people with such little effort, which means reporting that used to come monthly can now be always-on. Therefore, monthly decisions can become daily decisions. Consider the example of a salesperson who is selling a product at a negative margin because cost basis information is not available for a given month until after month-end, when finance “crunches the numbers”. That person may sell 45 days’ worth of product at a negative margin before the pricing gets corrected. With always-on data automatically adjusting based on up-to-date data, the salesperson – and their manager – can receive word on day one and correct their pricing accordingly.
Business intelligence enables a faster cycle of feedback leading to metrics-driven decisions each day about how an employee may spend their time, or what decisions they will make to improve their performance.
If your company is not investing in business intelligence, then it is time to start. Try asking a creative problem solver to learn about data modeling and try it out in Power BI (which has a free version with all modeling features available). Consider a particularly vexing reporting process stuck in spreadsheet hell.
If you are interested in outside help to accelerate your process, give us a call or schedule a back office assessment today.