The first in a series of articles about how managing information can help your business.
Business Intelligence, Management Information and Data Warehousing. These are all terms that have been embraced by large companies over the past decade in an attempt to gain strategic insight into customer behaviour and steal that all important market advantage away from the competition. But what do all of these terms really mean and are they relevant for small to medium businesses typical of those found in Gibraltar?
A study of Fortune 100 companies undertaken in 2005 by Wirthlin Worldwide on behalf of Accenture, a leading consultancy, found that 90 per cent of senior executives within these companies saw Business Intelligence capability as the most influential benefit for a company’s prosperity.
In the 2006 annual Gartner survey of over 1400 Chief Information Officers of leading organisations from over 30 countries, Business Intelligence capability came out as the top technical priority.
So what is all the fuss about? In order to understand exactly what all of the concepts mean and the benefits they provide, it helps to start by looking at the problem that these principles address; primarily the ability of a company to analyse and report consolidated business information.
Many companies run several operational computer systems, each one addressing a particular business process such as stock ordering, sales processing or account management. These systems usually serve their primary operational tasks well and to some extent may even exchange information. However, when managers try to consolidate the wealth of disparate system data to aid the strategic decision making process, it seems like they are trying to extract the proverbial “blood from a stone”.
This is where Business Intelligence (BI) solutions provide the key. Businesses are typically data rich but information poor. Operational systems hold a wealth of data, but to unlock the potential of this data it needs to be transformed into information. This is exactly what a Business Intelligence solution provides. A good BI solution should deliver some or all of the following benefits:
• Consolidated historical and topical information about sales and customer behaviour
• Key Performance Indicator (KPI) reports
• Conduct What if scenarios: perform market segmentation and understand better how to win new business without losing existing customers
• Analyse growth trends, model the impact of changes in influential parameters and predict sales trends or customer behaviour
• A single version of the truth where business performance is concerned
• Manage growth proactively not reactively
Solutions do not have to be costly or complicated to install. In fact a good BI solution should simplify the business manager’s interaction with IT and for that reason BI solutions should be business led initiatives rather than IT led ones. The technology employed need not be complicated either and whilst BI for the large organisation may require a generous amount of computing power, the small to medium business can achieve a lot with very little. The key resource is the human one, ensuring that the right questions are asked and that the insight provided is acted upon.
The next article will look at Data Warehousing and Strategic Management Information.