April 23, 2015 by Donna Fritz
I recently Google’d the term ‘business intelligence software’ and there were 105,000,000 results. Even taking the less relevant listings out of consideration, it’s safe to say that business intelligence (BI) is a pretty hot topic today…with a lot being said about it. In this two-part series, I’ll attempt to cut thru the noise and clutter to give some practical cost-saving advice for mid-market companies who may be considering supply chain BI for their operations.
While BI has been around for a while, advances in Big Data have driven a number of new solution providers into the market. This is very good news for mid-market companies as BI has long been considered an expensive and complicated tool fitted for larger enterprises. Emerging solutions and increased competition are quickly driving prices down, features and usability up, and expanding deployment options to meet a number of business models.
Most (if not all) pundits agree that BI can be a valuable tool for assessing and managing business health and also for strategic planning. However, the influx of new solutions with flashy reports and current market buzz can be a distraction from BI’s core purpose. Without careful planning and discipline, BI can end up as another failed technology tool that never delivers on its promise, but still sticks you with the check.
There are a number of areas to consider when exploring if and how BI can help your organization… especially in assessing and maintaining the health of your supply chain operations. While not exhaustive, this brief series will outline four key steps that can be helpful prior to your final evaluation and selection. In part one, I’ll cover how to get started.
Often times, BI can be a buzz word mentioned in a conversation, which triggers reactions up and down the organization. Things can get rolling quickly, leaving you to accelerate and possibly short cut important steps to making the right tool selection. Like any system that drives decision making and is heavily data dependent, incorrectly implemented BI often produces misleading reports and lingering issues from decisions made with inaccurate information.
If you already have formalized KPI measurements such as a balance score card—even if compiling them requires a good deal of manual data gathering, comparison and chart building—your current reports can serve as an initial benchmark. That said, it’s a good opportunity to evaluate the KPIs in a couple of areas before moving forward.
If you operate on a more informal measurement system, it’s probably time to formalize it and put some disciplined data collection and evaluation processes around your critical indicators. Formalization doesn’t have to be overly time consuming and complicated. It can be a simple standard process that states the indicator, how often it is measured, thresholds, why it is important, the source data, the calculations required, and the department/position resources responsible. Here are a couple things to keep in mind when formalizing your informal KPIs.
There are two reasons advance prep is beneficial. First, reports are only as accurate and valuable as the data that drives them. And second, BI tools are designed to integrate data from multiple systems, which all need to be accessible and able to export the data into the BI tool’s data warehouse or other storage area. I’ll address each below.
In part two, I will cover the next steps: determining how the data will be utilized and shopping around for the best, most-cost effective solution for your business needs.