We all know about reports. We use them every day and they have been the mainstay of business management since the beginning of the computer age. In fact, even back as far as ancient Egypt, Rome, and Greece, hand-compiled summaries were perused by managers.
So, how does Business Intelligence, or ‘BI’ fit into all this? Moreover, what has analytics got to do with it? If you run your business on reports, you might ask yourself why you would need to do anything differently. After all, the information you need is right in front of you. If you are like many businesses, you have a large number of reports you can run from your ERP system that gives you everything you need. The usual process is to dump at least some of these reports into an Excel document which cuts things up and puts together the summaries you need.
Once these processes are in place, they often work quite well and get you the information you need. Of course, there is often a little time taken to extract the data, and process it into the required forms. Moreover, when you go away on leave, and the system falls in a heap, well that just helps to justify your existence anyway!
Wouldn’t it be nice if you could shortcut all of that and have a tool that just answers the actual business questions? Questions like:
- How were sales last week? Are they up or down compared to the previous week, or the same week in the previous year?
- How do they compare to the unobtainable budget that we have been given.
- How is that new product going? Is it getting traction? Are we beginning to move the product?
I can already hear the commentary: ‘but we have our weekly sales summary report and it has all of that in it!’. That may be true, but there is one problem with using the static report approach. Humans! You see us dumb apes are very curious. After getting hold of some piece of info like – ‘sales this week were down 5%’, our next utterance is often something like: ‘Why’, or ‘Which products caused the drop’. It is the second and subsequent questions that form the crux of the difference between reporting and BI. Business Intelligence is all about the next questions. BI gives you an easy straightforward way to dig into the data using something called ‘Analytics’, which means what it sounds like – analysing the data.
A good Business Intelligence tool lets you filter and change dimensions in a snap. Want to switch a chart from sales by day to sales by product group? Snap, one click and you are looking at the distressed sales of that new widget the sales guy was sweet on.
Excel has a thing called a Pivot-Table. This is a form of Business Analytics. However, using it in Excel is a bit unwieldy and doesn’t share well with others. Also getting the data into the app each day/week/month is a bit of a chore.
A good Business Intelligence tool automates all of this giving you just the end result. The best tools allow you to do all this from a mobile device like a phone or tablet. Instead of reviewing the sales report on the plane to a major supplier, you can quickly answer the business questions as they arise.
It is not unheard of for some people (no names!) to go into an important meeting completely unprepared, but knowing that all the info they need is a tap away on their phone. I once actually saw this in action. An MD was quizzing a channel manager about the sales of a certain category of product, asking why the sales were falling. The manager knew that there was a general downtrend with some products, but didn’t have the details to hand. Fortunately, with the aid of web-based BI tools, a quick chart was thrown together in a few seconds showing sales by product category over time for this channel. It was immediately clear which products groups were causing the drop and a quick analysis by a few other metrics shows the common cause was – well -that’s a secret!
The bottom line is that Analytics is the investigation of business data using Business Intelligence tools, whereas reporting generates fixed and static sets of information extracted from business systems. We have always done business analytics, it’s just that now we don’t need to do it in our heads, or on paper (or, god forbid, in Excel), we can now do it quickly and easily using the power of BI.
To find out more about how Endeavour can assist your business, contact us today on 1300 583 097.