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Business Resource Center - B2B Technology Articles
The information you need to lead
Business intelligence puts it all together
Running a successful business means practicing effective management. While our instincts have to be sharp, it’s our access to information that will make or break our bottom line. Today, the technology and procedures available are able to put the right information into the hands of business leaders … and at Integrity we call this ‘Business Intelligence.’ Business Intelligence refers to using technology to give leaders the information they need to survive and thrive in today’s competitive world. It can be used for multiple purposes and involves integrating electronic data from separate programs, files, or software to provide you with real-time information. One specific thing this service can offer business leaders is the ability to see and better use real-time financial figures. Read on to learn how this use of Business Intelligence can impact your organization…
The Old Way
While your accountant or internal financial officer can provide you with financial statements, it typically includes information about past activity. They compile past sales figures, accounts payables, payroll, etc. and provide you with an income statement, P&L, or other tax-related documentation. We certainly can learn from this information so as not to not repeat mistakes or to pinpoint trends in sales; however, how well does the use of this information help you to accurately predict the future? In the past, business owners and leaders made many decisions based on past activities. Their “gut” told them which decisions to make because of the years of experience and knowledge in their particular industry. But what impact could you have made if you had clear, real-time information to back up these “gut” decisions, whether in favor or against them? You probably could have operated your business a lot smarter and a lot tighter and seen great success.
Business Intelligence is helping business leaders today do just that. Instead of relying only on figures that reflect last month’s, quarter’s, or year’s activity, they can get up-to-the-day facts on their sales, payables, salaries, etc. and make decisions using real information. It is a powerful thing!
How It Can Work
Because Business Intelligence helps integrate separate programs, files, or software, the business leader is able to have data compiled and reported on in an automated fashion. Think about it this way: if you have separate reports and spreadsheets that provide you with information about your accounts receivables/payables, your payroll, your sales activity --- all of this information can be combined into one report and compiled to give you usable data to help predict future business. For example, let’s say you wanted to look at your future labor-loaded gross margin (or the amount of margin you will earn on a product/service/department of your company compared to the salaries/benefits you will pay those sales people/departments). This is typically a figure not reported on by traditional accounting reports because it involves the combination of information from many, many sources in your organization. With Business Intelligence, you now are able to determine if your organization’s margins are at a point where you 1) need to hire more staff to accommodate predicted sales, 2) focus sales in a particular area of business because you are at capacity in another, 3) determine the productivity of individual staff members, 4) need to run a little lean now to protect from a predicted drop in sales later …. The list goes one and on! Bottom line: you now are able to use the information available in the separate system, programs, and software in your company to make better-educated decisions on how to run your business. Sure, you could probably ‘guess’ correct on some of these decisions, but how wonderful would it be to say with certainty, “Yes, we have to hire an additional repairman because our projected business is so high”?
Determining Where to Start
When helping any of our clients determine what Business Intelligence can offer them, we try and get them to first focus on what numbers or information they don’t have access to or are currently compiling by hand that would help them make more educated business decisions. The answer to this question will lead in the right direction to your Business Intelligence solution. Furthermore, it is great to consider what benefits you would be providing to your sales staff, customer service personnel, accounting department if they had _______ information. Fill in that blank and figure out how to give your entire organization a better picture of how your business is running, will be running, or should be running.
Eventually, using Business Intelligence in this fashion will become a sort of “survival of the fittest” game among competing organizations. Organizations that choose to arm themselves with more accurate figures will be able to make better decisions and move their businesses forward successfully. Those who keep relying on their “gut” or outdated data will slowly, but surely, drift into extinction because they didn’t adapt. Start predicting your own future with Business Intelligence!
Can your company benefit from Business Intelligence? Complete the following sentences to determine what Business Intelligence could mean for your company:
- I spend a lot of time compiling information about ________ that is often outdated by the time I am finished.
- My organization would benefit if we had __________ information automatically delivered to us/compiled for us in real-time.
- I would like more accurate and timely information from my system in the following area __________ (i.e., sales forecasting).
- If I could streamline this process of my business _______________ it would enable me to gain the benefit of __________________.
If you would like more information about Business Intelligence, share your answers to these statements with Integrity and Harlan: hgeiser@integrityts.com or (309) 664-8116.
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