Businesses have to make a lot of decisions. Important decisions. And it’s not a good idea to make those decisions off a whim or pull them out of thin air.
Business decisions need to be backed by research. That’s where data comes in.
But just having the data itself doesn’t cut it, because data isn’t the same as information. A 50,000-line Excel spreadsheet isn’t helpful in and of itself. What do you do with what you find there? What does it tell you? There’s no practical takeaway from data alone.
For data to hold any value, it has to be converted and analyzed so it can become actionable information. This process is called business intelligence (BI). It’s what transforms data into a format that is actually helpful for executives who want to make more informed business decisions.
In the past, BI was something reserved for large organizations. But as more affordable software, storage, and licensing options have become available, it’s now within reach for almost any company—and can be beneficial for almost any company.
Strategically constructed business intelligence systems can help you …
- Accelerate and improve decision making
- Gain operational efficiencies
- Optimize business processes
- Identify and resolve potential risks
- Identify potential new revenue streams
Can you think of any business that wouldn’t benefit from that list? I can’t.
Now, if you’re thinking, “My company does research. We have data, and there’s even someone in IT who does analysis. I even get reports with graphs and pie charts every few months.”
Then I’d say, “Good for you – but don’t pat yourself on the back quite yet.”
Unfortunately, many executives rush to assemble a BI initiative without considering the components required to make it successful or the standards by which to judge that success.
And as a result, very few organizations are actually maximizing the value of their data. Research indicates that, while 70% of BI data users think they are effective at analyzing and managing their company’s data, industry leaders believe the actual percent is much less.
So, how do you know if your company is using BI effectively? Or, conversely, if you’re ready for a data overhaul?
Here’s a good place to start…
1. Do you understand what your BI aims to achieve?
There’s no point in your company having a BI system unless it aligns with your larger business objectives. You should be able to obtain and analyze the information you need to run your business. If you don’t know what the system needs to do to help you do your job better, then how is it helpful? Your system needs to provide you with the right tools and information in order to be effective.
2. Is BI used across your entire organization?
BI isn’t reserved for executives. It can help in nearly every department of your business if you let it. That being said, your BI software should be able to create portals or reports that display different data depending on the user. That way, users aren’t burdened with sifting through information that isn’t relevant to them. This also prevents users from seeing sensitive information you don’t want them to see—like the salaries and/or commissions of others, for example.
3. Does the IT department control all your company’s data?
Over 40 percent of respondents to one survey indicated that they were either somewhat dependent or very dependent on others for access to their BI data. If that’s the case for your company, it’s time to rethink the way you do BI. Modern systems are very user-friendly, so it doesn’t take a ton of technical expertise to get the information you need, in the format you want. If decision-makers still have to wait around for assistance, IT eventually becomes a bottleneck—and the efficiency benefits that BI offers are lost. The BI that people need to make decisions should be available via an accessible web portal, dashboard, or automatically generated report.
4. Do you have extensive amounts of data in Excel spreadsheets?
While Excel is good for storing, organizing and manipulating small to moderate amounts of non-real time data, it should not be your company’s BI solution. It doesn’t take long for a growing company to accumulate more data than Excel was designed to handle. Because Excel relies on manual processes, it can be riddled with errors as well as multiple document versions. Either situation leads to faulty intelligence that can hurt your business. With software specifically designed for BI, you can automatically combine and analyze real-time data securely from multiple sources — which simply isn’t possible with Excel.
5. Is your BI system automated?
Most data isn’t formatted in a way that it can be plugged directly into a BI tool. It must first be consolidated in one place from multiple sources—often using an integration. Then it must be put into a common format so it can be manipulated. Too often, this is a manual process—which not only wastes time but also creates errors. It’s estimated that almost 90% of spreadsheets contain significant errors. To get the most out of BI, data collection and formatting must be automated so you can rely on the output.
6. Do you know the difference between reports and KPIs?
There’s no doubt that reports are a crucial starting point for analysis, but it shouldn’t end there. Key performance indicators are measureable areas of your business in which you want to improve. If your data can’t tell you how you’re doing with your KPIs AND deliver clear, actionable data about them, then you’re missing out on one of the key advantages of BI.
“If the BI system just automates and streamlines the reports and information that the company has always produced, then an opportunity has been missed. The best systems today structure information and its presentation in terms of what is most important to the company – its key performance indicators (KPIs).”—Craig Schiff, President and CEO of BPM Partners
7. Is your BI available on mobile devices?
We no longer live in a world in which people take their laptops to meetings. If BI is intended to strategically influence business decisions at nearly every level, shouldn’t it be available how or when users need it? That means you need to create smartphone- and tablet-friendly portals and/or specific native apps to make it easy for your employees to access BI anywhere at any time.
“Only 41.5% of users claimed to use mobile phones or tablets to access their BI data, but of those users, over 60% were accessing their data daily. Clearly having a mobile option available is extremely important, mainly because it helps keep employees fully informed at all times.”—Paco Darcey, Business Analyst at Clutch.co
You may now be asking yourself, “What’s next?”
Answer: Get your company’s executive leadership on board.
This is perhaps the most critical deciding factor for whether a BI system is effective or not: executive ownership. It’s only through the thoughtful, strategic advice and oversight of your organization’s leaders that BI objectives will be aligned with organizational strategy, that the necessary resources will be allocated, and that an effective team is put in place to own day-to-day BI development and operations.
Use these seven questions to help you determine the ROI a business intelligence solution can deliver. Right-size your approach to getting the intelligent data you need for your business to thrive.