This is part two of a two-part piece on the topic of business intelligence. Part one can be found here.
Let's take a closer look at what really matters to small and midsized businesses as far as investing in a BI solution. We contend that most SMB companies need little more than their MS Office Suite and a mix of affordable, easy-to-use BI tools. These tools can help you drill down to the key performance indicators which identify your strengths and weaknesses in operational performance, marketing, and sales -- the key components to optimizing efficiency and profitability.
Equally important, the BI tools you implement must be easy to use and learn and must be able to present data in a way that everyone can understand. If you have access to BI tools that can convert all of your key performance data into easy-to-understand terms that management can fully grasp, you have a tremendous opportunity to boost bottom-line performance and overall profitability.
Conversely, if your proposed BI solution is hard to grasp, it likely won't contribute much to your objective of locating and analyzing key, actionable data that can help your business run smarter. Whatever solution you choose, make sure that all of you can figure out how to get the most out of it without needing a PhD. This cannot be overemphasized!
Key components of a cost-effective BI solution
As you contemplate a cost-effective BI solution for your company, you should make sure that the integrated software delivers most, if not all, of the functions listed below at a price point that fits your company's budget:
Alerts -- Alerts provide crucial monitoring, proactive notification, and automation capabilities that help your company adapt to changing conditions and avoid alarming scenarios pertaining to payables, receivables, budgets, sales, and inventory. With alerts functionality in place, you can pre-set a wide variety of benchmarks in all of these areas and protect yourself from missing key time-sensitive or date-sensitive events or failing to respond to deviations from acceptable levels.
Inquiry -- Having an easy-to-use inquiry tool enables you to drill down into a specific area and quickly extract data that is essential to your business. For example, if you need to examine sales trends by region over the last 12 months, identify the top 5 customers for the quarter, or locate the top 10 bestselling items for the last month, this type of BI tool will serve you well.
Multi-dimensional analysis tool -- SMB companies want the ability to bring in data from multiple locations and still be able to see a unified macro view of the entire enterprise. Analysis software should help you achieve this goal -- providing a quick snapshot of your business and enabling you to drill down into sales and purchasing trends, as well as perform budget analysis.
Dashboards -- The term "dashboard" has become omnipresent in the ever expanding BI lexicon. An effective dashboard is a graphical snapshot of your business's health that is easy to understand. Some common categories of data (often from Excel) feeding the dashboard are revenues by period, product sales by category, actual vs. budgeted financial indicators, and expenses by category, just to name a few. The good news is that you can take full advantage of affordable BI solutions that offer this type of functionality.
If your proposed BI solution is hard to grasp, it likely won't contribute much to your objective of locating and analyzing key, actionable data that can help your business run smarter.
Quick KPI's -- Whether analyzing business performance vs. another company or between divisions within your company, quick access to key performance indicators enables you to see how your business is measuring up at any moment in time. This type of solution should possess the capability to compare financial models and actual performance vs. budget and forecast numbers for different time periods. In addition, it should enable you to quickly establish benchmarking of results vs. competitors over varying time periods. Finally, you should be able to export any KPI report or model to Microsoft Excel or Word.
Graphical presentations of data -- Viewing data in graphical format makes the process of analyzing performance much quicker and easier. Make sure that your BI solution incorporates customizable graphical views of your data in grid, pivot table, and interactive chart formats. This should be a standard feature, not an accessory.
Flexible reporting capabilities -- The ability to create and generate reports (including exception reports) that accurately reflect your company's key performance data is crucial as is the ability to customize these reports and display them graphically, if needed. In addition, you should be able to export these reports to an Excel worksheet or include Excel spreadsheet data in these reports.
Remote access -- Most decision-makers conduct a significant portion of their business while out of the office. So, it is essential that they have remote access to a wide range of their company's vital business data any time they want via the Internet. Make sure your BI solution enables you to access your KPI's such as sales, product and customer analyses, income and balance sheets, and inventory reports whenever you are out of the office.
Report automation -- In order to stay ahead of the competition, most SMB companies can't afford to sit back and wait for their IT or accounting departments to provide the information they need to make informed decisions. They must be proactive in automating their entire reporting process -- from creation to generation to distribution of reports across the entire enterprise. Armed with streamlined, high volume reporting, these companies are equipped to respond to ever-changing market conditions and make the best possible decisions that impact the health of their business.