We are all aware of how beneficial technology can be to any company that is willing and able to implement a solution. What we might not know is how specific technologies can help us make both short-term daily and long-term strategic decisions. One technology some might not have considered, but has proven extremely advantageous to those who have integrated the strategy into their technical infrastructure, is business intelligence. Business intelligence, or BI as it is known in the technical community, is simply defined as a means of collecting and analyzing your company's data. Basically, any data your company produces or collects can be stored and analyzed to help get a step up on the competition. Four areas to gain this competitive advantage are, but certainly not limited to, distribution, promotion, product and price. Let's take a look at how these advantages can be achieved.
Distribution
When we first develop our distribution process, everything flows perfectly. Orders come in, they are documented, payment is filed, product is shipped and the customer is happy. This process works well manually or with the assistance of an experienced excel user – for a while. With time, the orders start piling up, payments don't go as planned, product is out of stock and the customer is not happy. What a BI solution won't do for you is guarantee payment – but a good solution can clean up the process and assure a much smoother work flow. Custom web applications can gather customer information for easier reporting and segmentation. A structured and secure data warehouse can store sensitive information so that it can only be accessed by those with permissions. Finally, a dependable reporting and alerting system can direct orders to the distribution center making for faster and more reliable product delivery. This same reporting system could also let managers know when a product or part is out of stock, on order, delivery date, and the quantity that is back logged. By taking a look at "what-if" scenarios available through the use of these solutions, managers will be better prepared for incoming orders as well as able to quickly react to unforseen problems.
Promotion
How much time and effort is put in to promoting your company's product? What is the best means of promotion; internet, trade shows, radio, television, direct mail or so on? What products do the best with what kind of advertising? What age group buys your products the most? You might already know the answers to these questions, but what a great BI solution can do for you is automate a process of receiving this information and allow you to dig down through your results until you are satisfied with the information you have received. So, you get numbers every week from the sales department on who bought the product last week. You also get information on where and why they bought the product allowing you to re-market to those folks for cross-sells and upsells. A BI solution can take all these aggregates and analytically mold them into graphical representations that can easily be viewed by the people that need to make the decisions. A few ways this can be accomplished is thorough dashboarding, graphs and charts, and analytical reporting. Below is an example of a management dashboard for a marketing manager who wants to know how the amount of activitiy has effected sales for the month.
Product
So you have this great product, it can climb down walls, cleanly dispose of trash and paint your fence – all at the same time. It is selling like the pet rock in the 70's, then sales plunge. Would this catch you by surprise? Your answer would most likely be no if you had a BI solution in place to analyze product trends. You would have seen that 8 other manufacturers have placed similar products on the market and you could have analyzed the marketing war that developed. From that point you could have made the important decision of competing or changing your product line. The BI solution could guide you through all of this by helping you manage, understand and track the data your company collects every day and enable you to be one step ahead of your competitors.
Price
Pricing should be easy – your product costs $2.50 to make in Gary, Indiana, is distributed to you for $2.75 and then you sell it to the consumer for $3.00. Everyone is happy, everyone makes a profit and the consumer gets a wonderful product. What happens when gas prices sky rocket? With the magical trickledown effect, production costs and distributions cost start to teeter, prices are up one week and down the next. At the end of all of this you are trying to maintain reasonable prices for your customers while also trying to maintain your business. A BI solution can help you to view industry trends and take into account "what-if" scenarios so you can make smart pricing decisions to assure profit and customer satisfaction in times of an unstable marketplace. By having all the information you need, you are much more likely to make the right choice when faced with a business decision. One of the by-products of a BI solution is an increased efficiency in the decision making process because of the up-to-date information that is being reported to management.
Here we talk about four areas your company might be able to gain competitive advantage in from a solid BI solution; distribution, promotion, product and price. While these all may very well be important to your company, this is only scratching the surface of what a business intelligence solution can do for you. The uses of a BI solution are truly endless and all areas of a business should be examined to see how they can be benefited by a strong and well developed business intelligence solution.
Written by Shane Graser, Data Management Group Consultant
Call 888.394.1664 to find out how Data Management Group can help you with all your business intelligence needs.
To find out how we can help you solve your information challenges, visit our professional services pages:
