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.
“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.”
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.
Step 1: Know how and what you measure/want to measure.
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.
Existing KPI measurements
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.
- First, determine if your current reports are sufficient and cost efficient. If you have future enhancements to the reports planned, they should also be evaluated.
- Second, you may want to determine the scope of the reports covered in the BI tool. If other areas of the company—such as Finance, Sales and/or Customer Service – also use a balanced score card or other evaluation tool, there may be an opportunity to combine requirements and implement a more centralized solution.
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.
- It’s important to only get as granular as necessary. The temptation will be to dive deep into the details when, especially at first, a broader brush stroke can often get you 80-90% of what you need at 50% of the effort.
- Don’t do the exercise in a vacuum. Involve folks at all levels and in all affected departments to ensure major needs or road blocks aren’t missed. If you have internal resources with experience in this area who can serve as a project lead, all the better. If not, an independent resource who is reasonably priced will be able to help.
Step 2: Know your data sources.
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.
- Identify each system that stores data for the reports. If the data is housed multiple places, understand any differences that may be present. For example, if data is stored in an original state (non-rounded, non-truncated, etc.) in one system and differently in another, it’s important to know how the differences, when rolled up into higher volumes, can potentially alter your reporting results. This is especially important when complex calculations are leveraged for more sophisticated reporting.
- Identify how accessible the data is. It is important to know the amount of effort required to export it, whether or not the export can be automated and if the export is in a format that is easily usable. If you are housing information in an IBM AS400, for example, it is more difficult to export and work with data in IBM’s proprietary RPG format than exporting from a system that runs on a SQL or Oracle database and can export XML or CSV files through an automated script.
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.