Johannesburg, 20 Apr 2020
Organisations across industries are increasingly making a shift to using business intelligence (BI) tools. An organisation without data insight might not perform as well as its competitors that have a better grasp of what their data is telling them. As the demand for such abilities grow, the costs of incorporating BI tools are becoming more affordable, even for mid-sized and small business.
But what value can it add, and where to start? In this article, we present an approach to get more value from BI tools and be agile in making business decisions.
Management simplicity
To maximise the potential of BI capabilities, a top-down approach can especially be useful. With this approach, management-focuses are implemented as colourful visual cues on dashboards for quick evaluation. The process can be repeated for managers on other levels where BI insights can contribute to their decision-making.
One such a strategy is the balanced scorecard approach. It uses a standardised structure for reporting, albeit applied in varied formats by organisations. This strategy is a pragmatic technique to monitor cause-and-effect of activities within the organisation, using the feedback from outcomes to further adjust activities for improvement.
The classical balanced scorecard perspectives (or focuses) are financial, customer, processes and learning-and-growth. Outputs from one perspective are used as inputs to the next perspective, eventually contributing to the profit metric of the financial perspective.
Using these four perspectives, the dashboards can be designed to reflect metrics from each perspective, using elements like graphs for comparison, geo-mapping for distribution and tabular data for volumes. The result can be a very elegant combination of useful information portions, that collectively provide insight into the organisation's activities and outcomes.
Data from where?
From a regulatory point of view, a major source for BI will be data from the organisation's financials. Whether sourced from accounting systems or from spreadsheets used internally, there will likely always be a digital version available.
Depending on the nature of the organisation, other feeds may come from areas like HR, manufacturing, logistical operations and marketing. A rule of thumb for data availability should be: if it is important for business then it should already be measured.
The format in which feeds are available can vary significantly. BI tools in general should be able to accept data any format. Again, a rule of thumb regarding data format is that data in a spreadsheet is the most common format used globally.
A key aspect for success in data sourcing is to have representative data sets from all areas included in the management perspectives. Even in areas that do not have substantial and well-represented data sources available, by starting with a minimal (but accurate) data set, the results of BI will already be valuable. As the internal understanding and appreciation of BI matures, new efforts can be made in those areas to improve the data sets.
Process
An effective BI system grows to maturity over time. By following specific steps in the sequence showed, iterative improvements can be made both to the quality of data sets, and to the design of BI dashboards used by management.
Feeds from external factors (like changes in market prices or tax rates) may equally be important to the iterative process used.
This process and its effectiveness can be reviewed at any appropriate time-interval but should preferably always be done when an important change in business objectives or external factors has occurred.
Benefits
Tangible benefits from using BI can firstly be drawn from having a full glance of business activities on one dashboard, highlighting red spots that might need attention. Secondly, adherence to organisational compliance requirements are easily measured and reported on. Lastly and most importantly, the profitability of the organisation can always be visible.
Conclusion
If the saying is true, that a picture is worth a thousand words, then using organisational data to produce pictures in a BI dashboard should be worth more than a million words every day. The result of continuous BI improvements will most definitely result in improved savings and profits.
BI tools are invaluable in the plan-measure-evaluate feedback loop for an organisation. The “science” of business intelligence has become very practical to use in everyday business and is definitely worth a look for managers.
Hendrik van Zyl
Hendrik van Zyl is a business analyst/data scientist at INCASU. He obtained his bachelors as well as honors degree in Bcom Informatics at the University of Pretoria. He has a well-rounded understanding of how data can provide benefits/solutions for organisations and specialises in the implementation of data warehousing and business intelligence for INCASU's clients.
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