You cannot manage what you don't measure
By Elton Barry
Nowadays organisations have oceans of data coming in through their accounting packages, point of sales solutions, their payroll, customer management systems, etc. The question is: "What are they doing with such data?"
How does a company measure efficiency? How do you measure if your organisation is performing as it should? An old management saying that applies more today than ever before states: "How can you manage what you don't measure?"
It requires a change in mentality. Many SMEs, that form the core of the main economies in the world, are generally family businesses. They claim that they know their own business and the market as much as they know themselves. They pride themselves at having such information at their fingertips. Such business leaders would scoff at the idea of using Business Intelligence (BI).
The problem with SMEs is that the owners are the persons who have built their business, they are the ones who moved it forwards and they are the ones that could destroy it. For a business to survive any turmoil it is important that the owner caters for business continuity.
Business Intelligence (BI) is a logical means that helps in this area and tells you in what state your business is without hiding anything. The traditional way of obtaining information about one's business is through management accounts. But these generally show what the situation was one or two months ago. Sometimes such information might be too late in the day for one to salvage a situation.
A business needs to monitor its progress pro-actively. A Gartner report stated: BI has become an expected business competency for improving decision-making effectiveness.
BI can help answer several questions:
· What are my customer demographics?
· What is the growth factor compared to marketing costs?
Basic marketing tells you that it is cheaper to retain existing customers than obtain new ones.
While on paper things may look fine when digging much deeper in the data available and adding all the factors, things may show a different picture.
The International Data Corporation states that Business Intelligence provides a Return on Investment (ROI) benefit of 112% for big companies and 186% for SMEs. In the case of SMEs once a problem is pointed out it is easier for them to remedy things fast; unlike bigger establishments. That is why the ROI for SMEs is bigger.
To mention just an example a particular hospital in the UK saved £2.5 million per annum upon implementation of BI.
In order to implement BI the organisation must:
· Have a strategy:
· Have objectives
· Set its Key Performance Indicators (KPIs)
· Set parameters to decision taking
· Have the analysis tools to support decision making
· Look at its staffing needs and
· Have the technological tools needed to support such decisions
In order to achieve all this, a company must have relevant and consistent information.
There are three things a person can do:
· Make the right decision
· Make the wrong decision or
· Not making a decision at all.
The latter is the worst thing one can do.
At 6PM Solutions, we marry Agile with BI solutions to ensure that the business gets what it wants, when it wants it. To achieve this several steps are taken. These include:
· Facilitated workshops
· An iterative and incremental approach
· Frequent delivery of products and
· Involvement of the business users from the beginning of the project.
6PM's Agile approach will radically accelerate the capture of requirements and significantly reduce the time it takes to place your reports in the production environment. It ensures that the business receives today what it needs today.