Although most businesses have huge amounts of information about customers and operations, it’s often hidden away in systems and spreadsheets. But now, powerful software can unlock this data, giving managers crucial insights into their companies.
The raw material of any business in the digital age is data. There are almost no processes or transactions that don’t leave a digital footprint these days and the vast amount of data that’s generated automatically by most companies dwarfs traditional methods for dealing with it.
In theory, the various repositories of information about transactions, customers, suppliers, markets and processes ought to come together seamlessly. That should help staff become more efficient, management decision-making should become more integrated between different business units and this holistic view should also help shape business strategy.
Data, intelligence, insight
So why doesn’t that happen in many enterprises? Simple: crucial data is stuck in silos around the company. That promotes what academics call an ‘analytical approach’ to management, rather than a ‘systemic’ one.
The analytic approach seeks to reduce a system – such as a company – to its elements in order to understand each of them more fully. The marketing function knows what motivates customers; finance has masses of data about transactions and performance; sales owns information about customer activity; and the logistics and operations people understand cost better than anyone.
Exploiting all this information is easy, at least in theory. We analyse sales data and trends to build forecasts. We can find out which salespeople or teams are doing well – and why. Geographical data helps us gain market insight. Recording costs in the manufacturing process means we can uncover potential efficiencies.
Bringing all this analysis together to ensure managers make more coherent decisions and spot opportunities is much harder. Enter the systemic approach, looking at the enterprise in its totality, acknowledging its complexity and its own dynamics. That’s where Business Intelligence (BI) software comes in. It’s designed to create a more unified and useful view of company information and create a single version of the truth.
The visibility to succeed
Traditionally, BI is very expensive, very smart software that sits on top of big enterprise resource planning systems and sucks in data to provide insights. In theory, by asking the right questions, managers can get clarity about what’s happening around them, how they run their business and the effects of key decisions.
But advances in the way technologies work together within company IT systems have helped free up information without needing a costly BI solution.
A company’s core financials package is a good starting point. Modern finance systems allow management to streamline and automate key processes; ensure data is available in consistent, comparable formats; and offer tools for analysing and displaying key trends. Since most activities are expressed as financial data at some point, it makes sense to use this data to gain insights into the business.
Not everything lives in the financial database, of course. Many BI systems are designed with spreadsheet ‘front ends’ so that users feel comfortable with them as tools for collecting and manipulating a vast array of information.
In fact, the tool most commonly used to gather and crunch data at the local level – Excel – now incorporates many of the sophisticated analysis and collaboration tools that were the selling point of these BI systems.
A single view
Although Excel is a much more powerful tool than many people realise, it’s not in itself a BI solution. But further pieces of the jigsaw are already in place for many businesses. For example, companies can set up Microsoft SQL Server to deliver customised, automated reports drawn from data in Excel spreadsheets located around the business.
Making sure these reports are used effectively is the next step and that means clarity and timeliness. Well-presented insights – such as KPIs or reports – that help managers pick out meaningful data are crucial. And it’s no good if they have to wait for a quarterly analysis – data is collected in real time and it ought to be used the same way.
Microsoft SharePoint offers a solution for both issues, as well as for collating and sharing data. Business units and management teams can also set up digital dashboards that draw information from around the business, analyse it and present it as straightforward KPIs. And because they sit on top of data aggregated from around the business, it’s easy to drill down to a more granular level and uncover deeper insights. It’s certainly easier than relying on group emails or formal requests for customised reports.
The fact that these technologies work seamless across platforms – including mobile devices – means managers always have crucial information to hand, wherever they are. That’s increasingly a matter of survival. According to research group Gartner, BI has remained one of the fast-growing software segments despite the economic slowdown because businesses use it to increase competitiveness.
No software can eliminate the value of gut instincts, of course, but it can back them up with real insight and a depth of knowledge about the business. With the right systems and processes in place, any management team can have the right information to make the right decisions at the right time.
THE EXPERT VIEW
The National Computing Centre’s marketing director, Mike Dean, believes that affordable Business Intelligence (BI) systems are now flexible enough to cope with smaller, faster-changing companies.
‘That’s good news: many managers across the spectrum of business understand only too well that they need to know much more detail about what’s happening inside their company,’ he says. ‘But like CRM [see page 10], there are management challenges, too. For BI to work well, it needs to cut across functional silos and draw in data from a range of departments – it’s not just a finance function initiative.’
That’s where the modern BI systems come in. ‘They’re so much more adaptable, helping bring together these different information sources without overly constraining managers and users,’ Dean adds.
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