Following long hours of discussing the potential benefits of business intelligence (BI) or after attending a few conferences for executives, your upper management has finally decided to go for it and install a BI solution at your company. The beauty of modern BI tools is that regardless of the size of a company, there will always be a place for their use.
Let’s get real, however. Implementing a BI project will require effort and funding. It is important to recognize the true value from these efforts, demonstrate measurable results and ROI. That is why before jumping head into a BI implementation project, it is important to critically assess your company’s current needs, performance, operations and finances. To know whether your business is ready for BI, lookout for these tell-tale signs:
You lack visibility into the operations, finance and other areas.
When it comes to monitoring a company’s performance, to this day some people rely on their intuition and experience to identify which factors are causing profits to decrease and what to do about them. This may even occasionally work, but to rely consistently on the gut feeling, especially as the company grows and gets into a different market is very risky.
The times when Tom and Jane from a neighboring town were your only competitors are long gone and to survive and thrive in the new environment one needs to know exactly what’s going wrong, have all the required information at the fingertips to analyze current events and determine future trends.
With a BI solution, businesses can build easy-to-see dashboards that show management how well a company is performing by monitoring monthly (or even daily) sales trends, managing all expenses and tracking profits and profit margins. This may be particularly important for smaller companies that should be more careful with the amount of cash available to spend.
You don’t know who your best customers and best-selling products are
With an increasing number of products or services provided you should be able to identify them. As a business you must know exactly which of your products are selling best and who you largest customers are. Sometimes, companies may rely on a few “big fish” accounts, which place large orders once in a blue moon; however, when analyzed carefully it is regular, dependable and high-volume customers that bring more cash in the long-term. With BI tools sales departments can better rank their customers based on multiple criteria, such as a value of purchase, recency, frequency and consistency.
Having built more accurate profiles of their most profitable customers, businesses can come up with strategies to acquire new customers with similar profiles and needs as their existing leading customers. By focusing on the needs of high-value customers, companies can also improve existing account management strategies, providing their more profitable customers with better deals and service. At the end of the day, the more a business can form relationships with its customers, the more sustainable the business becomes.
As companies grow, without a proper tool it can become increasingly difficult to track all transactions, while accounts payable and accounts receivable can become a mess. It’s important for management to know exactly who owes whom cash, how much and when payments are expected to happen. Otherwise, good luck trying to balance your company’s cash flow. A BI solution can help with this issue and reveal all the required information right away, making it easy for you to follow up on overdue amounts timely.
A good BI dashboard would be of help when managing your contractors, suppliers and paying them on time. This will ensure you keep strong relationships with them and may put you in a position to negotiate better terms that would benefit the company in the long term.
Apart from these three reasons, BI is a requirement for growth-minded companies. When introducing new products and services, during and after M&As, and when there is a need to integrate data from multiple sources, you should look into a BI solution. With the development of cheaper self-service BI solutions, BI is no longer the domain of large enterprises and there are suitable solutions for small and medium-sized companies.
If any of the above-mentioned statement ring true for your company then your business is ready to start using a BI solution and start benefiting from value it adds.
If your company is looking to speed up budgeting processes and improve reporting, please feel free to get in touch with us at firstname.lastname@example.org. Within the first week, our experts will analyze challenges your company is facing and propose several working solutions that would cater to your specific needs.
Centida is one of a very few specialized niche firms that follow the principle of “from finance practitioners to finance practitioners.” Our advisory services focus on the improvement of operational, day-to-day activities in finance and controlling departments.