BUSINESS INTELLIGENCE: THE DIGITAL DATA COLLECTOR FOR SMALL AND MIDDLE-SIZED COMPANIES
Via Business Intelligence all of your company data is collected, analysed and digitally displayed with state-of-the-art technology. This greatly facilitates and improves analysis and strategic decisions in the future, anytime and from anywhere. On the one hand, the system brings order into a whole pile of mixed up data, prepares it so that it can be used by decision-makers, and thus enables a systematic decision-orientation. The following section describes what Business Intelligence can do for your business and how such an implementation works.
WHAT IS BUSINESS INTELLIGENCE?
Business Intelligence stands for business analysis.. It’s about creating and making meaningful decision-making resources available from an ever-growing stream of available data. On the one hand it is about providing internal data reliably and consistently as well as also processing and analysing external data. After all, internal and external data must be merged into a company-specific model.
Business Intelligence and external data
If studies are to be believed, the amount of data created in 2013 alone is greater than the amount of all data created since the Stone Age until 2013. Obviously, we are not talking about knowledge here, but about data. The reason behind this is the increasing networking of technical devices in the so-called Internet of Things (IoT) as well as the various social media channels. For example, around 200 billion tweets are sent annually via the Twitter platform. This means 500,000,000 tweets per day and 6,000 tweets per second. Or uploads of about 70,000,000 photos per day on Instagram.
If you are an entrepreneur in the area of B2C, which is business-to-consumer, it is crucial for you to understand the market. These days, you can either rely on market experts and buy industry studies, or you can engage with the market yourself. One of the ways possible method is to integrate external data into your business and analyse it with Business Intelligence.
Handled properly, you would for example be able to draw the right conclusions for your product development by the specifically analysed data from the flood of information.
Small and medium-sized companies are faced with the great challenge of collecting and sorting such large amounts of data, including big data, and filtering out the for your business relevant core information. The problem is not the obtaining of this essential information, but the logical filtering and structuring of it.
Imagine all of this as a whole pile of children’s photographs. Parents will relentlessly take around 500 pictures of their kids every day on their smartphones. If all of them are simply uploaded onto a computer, without being organized or filtered in any way, you will create in just a very short amount of time a huge and largely confusing pool of pictures, which you possibly won’t look at in the future. It is therefore important to organize these pictures right from the start – according to the time of year, occasions, people etc.
This is exactly the task that Business Intelligence Systems will do for you. They extract from the masses of existing data materials all relevant business information and process them into a foundation for smarter decision making. In other words, this means that your company will no longer make decisions according to some gut feeling but based on actual exact figures.
Business Intelligence and internal data
Whilst external data is important for detecting and responding to market changes appropriately, internal data shows how the company is taking advantage of these market opportunities. In addition to revenue development, the revenue and cash flow should also be considered in a business intelligence solution. Also, operational data should be included. Some examples:
- How well is the sales department doing?
- Which client segments are being processed?
- How high are the structure costs of the company?
- How do the purchasing prices as well as the supplier landscape develop?
In many companies, such data is hidden in various databases and there is no unified overview of the business. For example, customer data could be stored in a CRM (Customer Relationship Management) system, operational business data in an ERP (Enterprise Resource Management) system, business data in an accounting system and important analytics or forecasts in a spreadsheet such as Excel.
In such a system landscape, it is almost impossible to make the right informed decisions, because you will never have a complete overview of everything that should influence such decisions. A business intelligence solution helps you to restore the overview and to maintain it.
WHAT ARE THE BASICS OF A BUSINESS INTELLIGENCE SYSTEMS?
A Business Intelligence System is not a ready-made out of the box system, which you can simply install and get started. A Business Intelligence System is also not a standard software that you can just easily buy anywhere.
The Business Intelligence System Structure
A system basically consists of your databases, which you have already installed in-house, the ETL process (Extract, Transform, Load = data extraction, transformation of the data into the scheme of the target database, Load = loading the data into the target database ), which bundles the data in a target database, and the front-end, a dashboard in which the data is finally made available and visualized.
In order for the system to produce the desired effects, it must first be determined what kind of controlling and performance management model you want for your business. Often, the systems are already well-developed in companies, which provides a good basis to get started.
Definition of Controlling and Performance Management concepts in Business Intelligence
If this is not available, the Limendo Business Consultants from South Tyrol, Bolzano, recommend to first carry out a review of the existing controlling system and to then benchmark and compare it against other systems.
After this initial inventory, it is important:
- To record the strategic goals and to understand them
- To define a long list of KPI (Key Performance Indicators = parameters) together with the business owner and the management
- To analyse the KPI and to evaluate them with regards to their measurability, controllability and effect
- To work out a dashboard with all important parameters together with the business owner and the management
In addition, must:
- The system landscape of the company has to be incorporated
- Management goals must be broken down into individual objectives
Once, all these parameters and desired data are defined, the implementation of the Business Intelligence Solution can begin.
HOW CAN I PROMOTE BUSINESS INTELLIGENCE IN MY BUSINESS?
After a successful implementation, you can use the Business Intelligence System as follows:
- Running ongoing KPI evaluations
- Create a live data access for particularly important and critical data
- Compare target and actual data and compare them with the budget
- Display prognosis and projections
- Display various data on different hierarchy levels
Whilst the entrepreneur has access to all data of the purchasing department and is able to see several evaluations regarding the suppliers and material groups, the purchaser is only allowed access to information regarding the suppliers and their material groups.
Whilst a hotelier has full access to all areas of his hotel, the SPA Manager can only see the data for the SPA department.
On top of that, this also creates these additional advantages:
- • Requirements for fast business decisions
- • Automated creation of reports and presentations for meetings
- • Avoiding wrong decisions
- • Same databases for all employees and the management
- • Controlling can focus on real implementation controlling and standards are available for all at no extra effort
IS A BUSINESS INTELLIGENCE SOLUTION ALSO NECESSARY FOR SMALL COMPANIES?
A Business Intelligence solution is definitely worthwhile also for smaller companies, because the one-time implementation effort will pay off rather quickly. In the long term you will save the high personnel costs normally associated with data processing. Because the effort alone, just to analyse and understand the existing information material, is nowadays almost impossible to achieve for a full-time employee. A suitable business intelligence solution can be found even for smaller budgets and with fewer resources.
Making the right decisions will pay off in the short term. However, it is important not to think of business intelligence as a ready-made out of the box software, but rather as a never-ending project. You will work on your business intelligence system continuously.
HOW IS A BUSINESS INTELLIGENCE SOLUTION INTEGRATED IN YOUR COMPANY?
Obviously, the implementation of a Business Intelligence solution requires some effort, both in terms of personnel and financially. However, once this solution is properly set up, this effort will pay for itself very quickly. Depending on the size of the solutions, you will have to expect between 3 and 6 months to introduce a specific solution. Here, there are different methods of how the system is constructed. Very important is the regular exchange between employees of the company and the implementation.
- Defining requirements
First, the internal requirements for a Business Intelligence solution are defined. In which areas would technical help make sense? What kind of expectations do the management and the employees have regarding this solution?
- Incorporate employees
It is important to incorporate the employees as early as possible into this process. For the different areas, such as production or purchasing, so-called key-users must be defined. These will follow this project closely and they are responsible for the testing of the data quality for the Business Intelligence solution.
- Selecting a BI Solution
Based on this information, we will then select a suitable Business Intelligence Software. Currently, numerous versions currently exist in the market and our business is very familiar with all of their various disadvantages and benefits. We will recommend the BI Solution that will best suit your specific needs.
During the implementation of the system you will be supported by our project management, which coordinates the technical tasks as well as provide a contact person for the key-users.
- Practical Business Intelligence
During the implementation, the employees and key-users will also be trained. This will ensure that the Business Intelligence solution is quickly incorporated into the everyday business routines and become indispensable.
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- Request a call back or simply write to Limendo Business Consultants.