Business Intelligence – A useful guide to SMEs

Business Intelligence – A useful guide to SMEs

By Sunny Pokala

Business Intelligence (BI), also referred to as “decision support,” allows organizations to better understand, analyze and even predict what is occurring in a company. In the past few years, it has become one of the most commonly deployed software technologies in the business world, particularly in the developed economies, helping executives, managers and professional analysts stay in touch with the on ground and current activities.

According to the definition provided by Wikipedia, BI refers to skills, technologies, applications and practices used to help a business acquire a better understanding of its commercial context. BI technologies provide historical, current and predictive views of business operations. In simple words, BI helps an organization turn a jumble of data into useful and meaningful information and then distribute this information to those who need it, when they need it so that they can make timely and better-informed decisions. It allows organizations to combine data from a wide variety of sources and see an integrated, up-to-date and 360-degree view.

This tool is especially important for SMEs, who while not having the vast resources of industry giants, are typically able to quickly implement business decisions. BI provides a win-win solution for IT and business users by allowing the IT department to be more productive in working with its business users to service special requests, while permitting these business users to become more self-sufficient. Operations and analysis are two sides of the business and BI allows IT to be a valued partner in both.

In this article, I have discussed a few points on how BI can help SMEs expand their base and stay in the growth trajectory. They are:
• Establish and monitor performance metrics and take corrective actions if they are in danger of not being met.
• Compare departmental turnover to identify potential morale problems.
• Identify the best selling products and see if this holds true in all of its retail outlets.
• Implement dashboards and scorecards so that executives and supervisors can quickly recognize operational exceptions or when expenses are likely to exceed budget.
• Identify customers who are cutting back on their purchases so that special inducements can be offered to retain them.
• Compare year-to-date sales for this year with last year’s and forecast what sales are likely to be for the entire year.
• Track customer orders and desired shipping dates against finished goods inventory and adjust the manufacturing production cycle and supply chain logistics to reduce inventory carrying costs.
• Integrate operational, spreadsheet and historic data for analysis purposes, while helping to stamp out “spreadsheet chaos” to provide consistency and “a single version of the truth” for the organization.
• Provide business users with the ability to perform their own ad hoc analysis, without having to tie up scarce IT resources.
• Be better able to understand and analyze their own operations and their interactions with their customer, in order to gain a competitive edge over their competitors.
• Keep a track of daily operations and strategic objectives and quickly identify when they are not in agreement.

The implementations of BI:
The BI spectrum is very broad in terms of its tools and functionality. At its core are the traditional capabilities of query, reporting and analysis. This is complemented by data quality and data integration to accurately and consistently consolidate data from multiple sources. Dashboards and other visualization techniques can help users quickly understand analysis results and are often considered part of the BI spectrum – as are search capabilities to locate information and reports, predictive analysis to discover hidden patterns and enable ‘what-if’ analysis, scorecards and performance management to help monitor business metrics and key performance indicators (KPIs) such as customer satisfaction, profitability and sales per employee in order to align individual and departmental metrics and efforts with the organization’s strategic goals.

The advanced analysis functionality permits organizations to define hierarchies so that, for example, sales could first be viewed for all the regions of the company and then the user could specifically view the sales in each state / country in each region. Other advanced analysis capabilities, such as filtering, can be used to include or exclude specific stores, regions, products or time periods in the analysis and the ability to look at the top 25 or bottom 25, or any other number, best or worst-performing products, stores or salespeople.

Core BI technology like query, reporting and interactive analysis is used to view or analyze what is or has already occurred, while data mining and predictive analysis allows users to predict what may occur in the future. BI uses sophisticated statistical techniques to find relationships that are hidden or not obvious. It can be used to identify which factors closely relate to customer chu
and attrition or which factors (e.g. a prospective customer’s income, education, age, last purchase amount, etc.) were most closely related to a successful response in a marketing campaign.

Business intelligence is not just about tools and their applications; it is also concerned with distribution and control. Reports should be abled to be published onto the web and delivered to a user’s preferred mobile device. Also, by using BI against both operational systems and data warehouses, a company can improve its daily operations and also compare current results with historic values to identify trends and snip the problem right at the bud.

The benefits of BIrnA major part of any manager’s job is to make decisions. If you can improve the overall quality of your organization’s decision-making process, you will improve the overall effectiveness of your organization. BI allows business users to analyze and better understand their organization’s plans and results. It provides insight into what is working correctly while identifying potential problem areas in time for corrective actions to be taken. It can be used to recognize opportunities as well as problems and alert your organization to potential issues when exceptional conditions occur, which are very likely to occur in the SMEs.

Since BI product suites include a variety of components, organizations can pick those that are most appropriate for the task at hand and for the experience level of their individual employees. While in the past, only technical specialists typically used BI tools, most business people (particularly at a newly set up or mid sized organization) can now successfully use them as well. This has served to democratize BI usage throughout organizations. The role of IT has positively evolved from one of digging out from its historic report request backlog to one of monitoring and administrating BI usage and setting the appropriate controls relative to who can access what data. This BI self-sufficiency has provided business users with quicker response time and the ability to drill down and perform interactive analysis while enabling IT to more effectively and more efficiently serve its organizations.

While many managers and supervisors pride themselves on their intuition, BI provides tools to help verify their insights and even discover new ones. It permits the new age business users to explore results at a high level and then drill down to analyze the underlying details. Business intelligence is one of the primary keys to effective decision-making; hence it is of immense benefit and assistance in any organization, particularly SMEs.