In my Nov 19 article, I wrote about business intelligence becoming mainstream, and I framed the discussion using the "Gartner 2010 Top 10 Business Priorities" report, the first priority being "improving business processes".
Let's now talk about the 2nd priority, reducing enterprise costs. I don't know of any business owner who does not indeed put this high up on their list of priorities.
So how do you go about to identify areas to be trimmed? In many businesses, labor is the single highest expense line item, but how do you know if labor or processes are the real source of high costs?
- Are manual, complicated processes burdening your staff, bogging them down in daily tasks and preventing them to focus on strategic projects that grow your business?
- Are you clear on how much your current processes cost your business, such as what it costs to fulfill a customer order?
- How much does it cost to process payroll?
Start by setting some targets: what is an acceptable cost, what is industry-standard for any processes or activities that you want to measure. Business intelligence will help you measure your progress through the year, so that no rash decisions that could in fact hurt your business are made.Here are more suggestions:
- What is your labor costs compared to the same period last year?
- Can you trend this year against last year quickly and easily?
- Do you have the ability to see at a glance any anomalies that are causing expense creep?
- Can you currently measure and detect a sudden bloating of expenses in time to allow you to rectify matters before they cripple your business?
A trend analysis report can assist you to better manage all the expenses in your business -- and not just your labor costs -- by tracking them on a year-to-year basis.
Here's what your solution should offer:
Inquiry Having an easy-to-use inquiry tool enables you to drill down into a specific area and quickly extract data that is essential to your business.
Analysis tool You'll want the ability to bring in data from multiple locations and still be able to see a unified macro view of the entire enterprise. Analysis software should help you achieve this goal—providing a quick snapshot of your business and enabling you to drill down into sales and purchasing trends, as well as perform budget analysis.
Dashboards The term dashboard has become omnipresent in the ever-expanding BI lexicon. An effective dashboard should provide a graphical snapshot of your business’s health that is easy to understand.
Quick KPIs Whether analyzing business performance vs. another company or between divisions within your company, quick access to key performance indicators enables you to see how your business is measuring up at any moment in time. This type of solution should possess the capability to compare financial models and actual performance vs. budget and forecast numbers for different time periods. In addition, it should enable you to quickly establish benchmarking of results vs. competitors over varying time periods.
Graphical Presentations of data Viewing data in graphical format makes the process of analyzing performance so much quicker and easier. Make sure that your BI solution incorporates customizable graphical views of your data in grid, pivot table, and interactive chart formats. This should be standard feature, not an accessory.
Flexible reporting capabilities The ability to create and generate reports (including exception reports) that accurately reflect your companys key performance data is crucial as is the ability to customize these reports and display them graphically, if needed.
Remote access Most decision-makers conduct a significant portion of their business while out of the office. Thus, it is essential that they have remote access to a wide range of their companys vital business data any time they want via the Internet.
Report automation You don't want to sit back and wait for their IT or accounting departments to provide the information you need to make informed decisions. Reporting processes should be automated from the creation to generation to distribution of reports across the entire enterprise.
