Benefits of Business Intelligence

Decision Making

Business Intelligence will affect the speed and quality of your decision making across the whole organisation.

Many decisions in an organisation are currently driven by past experiences and gut feelings. This type of decision making can lead to decreases in revenue and loss of market share. When implemented successfully, Business Intelligence can help you take the feelings and instincts out of decision making and turn it towards solid timely decisions based on cold hard facts from reliable data.

Quite often, the quality of your decision making is relative to the choices and information you have available. Even outgoing presidents have been known to excuse their mistakes by saying that they "made the best decisions with the data and knowledge available at the time".

If you were driving home for example and you have the choice of two routes, the fast freeway or the slower side streets. You would certainly take the side streets if you knew for certain, from reliable data, that the freeway was going to be at a standstill for the next few hours due to heavier than usual rush hour traffic.

The same goes for the day to day running of your business. You can determine a hot new product in an instant, or a product which maybe selling well, but with a negligible profit. Business Intelligence solutions allow you, or any member of your organisation to drill-down on specific, valuable pieces of information to afford you the best decisions possible.

In Human Resources you could identify problem or superstar employees and reward or reprimand as necessary.

In Customer Relations, you could pay more attention to your loyal and valuable employees instead of just sticking to a blanket customer service policy.

Your Sales department could track advertising campaigns and compare with actual sales results on an hourly basis to assess their success or failure.

Cost Cutting

One major way in which companies are able to cut costs is to make more productive use of their time. Business analysts and administrators often spend most of their time gathering, aggregating, formatting and distributing reports.

If a successful BI solution automated that entire process. The staff who were doing this could either be reduced, or put to use on other duties, such as analysing the data, looking for trends and inefficiencies. It would be like hiring a complete new, data analysis team at no extra cost.

For companies with a lot of identical stores or outlets, such as a hotel or restaurant chain, savings can be made by detailed, accurate and instant comparisons of costs. If most restaurants are spending a certain amount on electricity, yet one lone store has a utility bill of double that amount, it can be noticed immediately and steps can be taken to remedy the situation. Even more important is if one hotel is spending far less on its office equipment than another, it would be really worthwhile finding out how this might be possible across the entire network.

Some organisations have already implemented Business Intelligence solutions in various different departments. Often these were done using different vendors and technology. Some may even be outdated, hard to use and have a costly "per-seat" licensing model. Only the people in the specific departments know how to operate these systems and any new employees might need some costly training.

Microsoft BI solutions have a familiar look and feel, similar to Microsoft Office, Excel or Internet Explorer and so training is minimal, and by implementing a consistent, organisation-wide, Microsoft solution, your organisation would probably be able to save a lot on licensing fees. This is especially so because most of the technology involved already comes as standard with a Microsoft SQL Server license fee, which you may already have purchased.

Compliance help

With the world wrapped up in financial crisis and corporate scandals, governments are increasingly clamping down on listed companies and forcing them to be more and more transparent. In these days of high technology there is now no excuse not to have rapid access to your financial data for the regulators to inspect at will. However, it does help that they are merely enforcing great practices which businesses would be well-advised to be doing anyway.

In a report from Gartner (formerly META Group) entitled "Sarbanes-Oxley: The Impact on Financial Reporting," it is recommended that organisations focus on the following financial-reporting criteria:
  • Collecting financial data
  • Making financial details more accessible
  • Drilling down on accounting reports
  • Highlighting key analysis areas based on tolerance and financial metrics
  • Segmenting reporting into significant elements
  • Enabling workflow
  • Offering frequent flash reporting
  • Instilling a financial management mindset within the organisation.(1)
By using BI to help ensure compliance and mitigate risk, government, legal and financial industries can also gain a competitive edge in the market. BI can not only help achieve compliance but also unlock great quantities of business knowledge currently held separately in different areas of the organisation. Gathering and organising this data can also help grow the enterprise.

A great BI solution can provide the following to aid with compliance:
  • The capacity to view real-time posted transactions, enabling analysts to quickly and easily research problem areas in detail
  • A built-in audit trail that gives an in-depth view of finances at any moment
  • Role-based security to ensure the proper flow of information inside and outside the organisation
  • The ability to report and consolidate data within 48 hours of material events that could affect a company's financial performance
  • The ability to deliver information to any party and in any electronic or print format
  • Auditable report management that enables financial professionals to prove compliance if questioned
  • Ad hoc reports that help managers discover and quickly communicate changes in the business
When your BI solution successfully achieves some of the compliance goals, you can look forward to auditing and reporting becoming a great part of your enterprise culture.

References: 1. Van Decker, John. "Sarbanes-Oxley: The Impact on Financial Reporting." Gartner Research (formerly META Group). 13 March 2002.