Some businesses are drowning in data. These days firms have more information about their customers than ever before, giving them more insight into their customers’ needs.
Simply having the data is not enough, however. Businesses need to be able to use the data to make important, strategic decisions that will ultimately end up making profit.
Paul Conlon, director of finance and administration at Coty Ireland, says that a new IT system for sales analysis his firm deployed has made an impact on both a day-to-day basis and on strategic decision making (see case study).
Getting true business insight can be a struggle for many companies, according to Richard Moore, business group lead for Server and Tools, at Microsoft Ireland.
Where business intelligence really comes into play is in gathering this information and using it to provide employees with the right data when they need it, to help them make decisions or reach a certain goal.
It is hard to put an exact definition on what business intelligence is. However, one common thread appears regularly: the ability to store and analyse information on businesses and their activities.
It goes much further than figures. Traditional accounting packages can deliver a certain amount of static reports but can’t incorporate information from customer relationship management systems, enterprise resource planning systems and other critical business tools.
Essentially, business intelligence is the digital dashboard that gives a fully rounded real-time view of the business by pulling together data instantly from all the various silos of information.
“Business intelligence takes off where different people need to look at the same information and slice and dice it differently,” explains Jayne McCormac, director of management information systems, Sage Ireland. “It is the process and technology used to support fact-based decision making.”
In the past, systems of this type were the domain of large corporations. “Business intelligence has been around for years,” explains McCormac.
In recent times, however, small businesses have begun to take advantage of the systems. McCormac classes business intelligence as “a critical business activity” and one that all companies should be looking at. The need for this type of system is clear. The advent of the web has meant that small businesses are no longer limited to a closed market. Once a business has a web presence they can do business in overseas markets — an important consideration in today’s global marketplace.
Using the web can also make businesses seem larger than they actually are. Moore explains that businesses can look like slick and sophisticated operations on the web. The reality may be small offices with a handful of staff, but the web is a great leveller and makes business size seem less obvious.
Prior to the evolution of people using the web for more customer interaction, small businesses would have been quite limited. Nowadays customers can order online, have loyalty cards, sign up for email newsletters according to their interests and view promotions.
But with this increased customer interaction comes an avalanche of data. “There’s a huge amount more information available about what customers do with businesses than there was in the past,” says Moore.
There are a number of benefits to using business intelligence for small businesses. In a business environment where companies need to make effective decisions quickly in order to advance their business, business intelligence can give firms a boost — and possibly a competitive advantage.
“The most obvious benefit is that it eliminates a lot of guesswork,” says McCormac.
It also allows businesses to react more quickly to certain changes, for example in financial circumstances. “The company can make timely decisions based on timely information,” adds McCormac.
It can also help improve the customer experience, a vital consideration for competitive businesses. Keeping customers happy, and retaining their business, is a key concern for companies regardless of what they do.
Moore explains that using business intelligence could help make decisions on product launches, pricing and so on. Having accurate, valid information means that companies make fewer mistakes and faster decisions.
As with all technology though, there are certain steps to be followed. Before implementing a business intelligence system companies need to know exactly what information they want to analyse. This will help them to decide exactly what solution would suit their needs best and avoid overspending unnecessarily on software.
“You could put in a brilliant solution and it could go nowhere and not get a return on the investment,” warns McCormac.
There are plenty of business intelligence services available to small firms.
A good business intelligence system should be flexible, allowing it to adapt to the changing needs of the company, growing as the firm expands over the years.
Business intelligence also needs to deliver relevant information and present it to employees in a manner they are familiar with, ensuring that they understand the data being presented to them.
“It’s all about delivering the right information in a timely fashion to people,” reiterates Moore.
With a proper system in place, small enterprises could gain a significant advantage from business intelligence. Coty Ireland is just one of the small firms that has realised significant benefits from implementing such a system and has made it an integral part of the business process.
Other small firms can follow its lead and benefit from investing in the systems. With the help of the experts, small companies have much to gain.
Case study: Made up with success
“We’d be lost without the system we currently use,” says Paul Conlon (pictured), director of finance and administration at Coty Ireland.
He explains that the new system has made an impact on both a day-to-day basis and on strategic decision making within the company.
Up until 2002, analysing sales trends and generating accounts and data for the company involved extensive Excel reports, often thousands of pages long, filled with data from its third-party distribution company.
The seven-person team handles a huge volume of business, with over 1,000 active SKUs (unique product identification numbers) at any time and 2,000 delivery points around Ireland.
Limited systems and incomplete information (the data from the distribution company had no customer information) meant that the firm lacked sufficient details to use it as a base for strategic decisions.
In conjunction with M2bis, Coty has implemented a multi-dimensional sales analysis, strategic planning and reporting solution, giving the company 100pc data integrity.
M2bis identified Microsoft Analysis Services to analyse the data from the distribution company while Crystal Analysis was suggested as the appropriate software for reporting, with its Excel reporting capabilities and add-ins.
The new system has had a significant impact on Coty Ireland’s business. It has reduced the weekly sales analysis timetable to a single day, instead of four, while procedures such as posting to the general ledger can be completed quickly and on working day one.
The system is also scaleable, as it is based on modular develoment, and Coty Ireland hopes to expand in the future.
Business intelligence web resources
Microsoft Business Scorecard manager, a business intelligence application
Datapac Business Solutions, the software development arm of Datapac, which provides business intelligence services to Irish firms
Software Resources, an Irish firm offering training on Crystal Reports and which provides performance management tools and other business intelligence applications
Sage Ireland’s business foresight details
A US-based business intelligence toolbox, featuring advice and information.