Although the headlines have moved away from daily prophesies of doom and gloom and are making some reference to ‘green shoots of recovery’, organisations are still looking for ways to reduce their budgets. However, major spending cutbacks are potentially false economy for many business technology services, not least the new generation of business intelligence (BI) tools.
Sales may slow down when finances are tough, but they do not stop altogether – which means that there are more people fighting for a piece of a smaller pie. Therefore, when budgets are tight, an organisation’s competitive edge is more critical than ever. That means its management team needs complete visibility of everything happening across all functions so that it can make informed choices. In the current climate, the business-critical nature of these decisions is heightened because they determine the ongoing success, or potential failure, of the company. BI uses data generated on an ongoing basis, which in turn affords better understanding of operations so that processes can be fine-tuned to maximise both efficiency and sales.
Very simply, the more in-depth the understanding of the business, the more easily it can be re-engineered for competitive edge. This is achieved through extensive analysis of business data, which in turn requires powerful BI tools.
Business Intelligence 2.0
An accurate picture of the business at any given moment also requires access to information in real-time, which is enabled by the technical architecture, ‘Business Intelligence 2.0′.
An increasing amount is being written about BI 2.0, and it also has its own entry in Wikipedia. But the key to deploying it successfully is to avoid putting too much emphasis on the IT element of the popular term. BI 2.0 has been coined as a buzzword to refer to the instant access that decision-makers have to data. And, like the various other Web 2.0 technologies, BI 2.0 reflects the increased interactivity and ease-of-use it offers.
The business benefits of BI (2.0)
So what benefits will be reaped by organisations that invest budget and resources in BI 2.0? At a topline level, BI is a tool that helps to identify profitable customers and ways to retain them, as well as streamline operating costs.
More specifically, from a perspective of making money, BI enables businesses to identify the products, services and sales channels that drive its revenue. Customers can be ranked by their profitability, and this can be broken down further by factors such as geographical location and the channel to market to which they respond.
Visibility of this magnitude enables a company to make informed choices. For example, high-value customers can be specifically targeted in promotional campaigns, leading to better returns on marketing investment. At the same time, low-value customers can be encouraged to increase their spend, or the company can decrease their activity to retain them.
In addition, product promotions can be analysed and therefore ranked in terms of what made them successful, in order that effective tactics can be repeated. Monitoring key satisfaction indicators, such as product service and quality and the timeliness and accuracy of deliveries, can flag up potential customer relationship issues before they become a profit-draining problem. This helps to keep valuable customers on board.
Data this detailed is also invaluable to companies that provide services to third party organisations. For example, marketing agencies can offer their customers in-depth information on every element of each promotional campaign – such as which leaflet or advertisement generated the most sales. Monitoring and sharing the effectiveness of marketing activity in this way is a ‘value-add’ service with the potential to give the agency competitive edge. Combined with real-time data feeds, it also puts the end-user in the driving seat, enabling them to alter pricing, increase stock holding or amend advertising campaigns as required.
At the other end of the scale, BI is also an effective way for enterprises to maximise revenue by controlling costs, enabling them to analyse efficiencies by factors such as product, supplier and region. The impact of energy price rises for example can be monitored, so that manufacturing and transport costs can be regulated. Equally, the overall cost-benefit of using a lower cost supplier but getting a higher rate of defective products can be explored in detail, and an informed decision made on whether this strategy is the best to pursue.
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