It is often said that humans are the most important asset to modern business. Whilst this is the case across most business functions, there is one area where both people and data are equally vital.
When it comes to decision making, it is fair to say that humans are fundamentally flawed. Psychology tells us that people are influenced by their prior experiences – which culminates as their gut instinct. Whilst a ‘gut feeling’ can be incredibly powerful, there’s nothing better than data and fact, particularly when it comes to something as important as influencing the direction of business.
This is where Business Intelligence (BI) comes in. Combining data and analytics, it transforms numbers and statistics into actionable insights, which workers can leverage to make smarter business decisions – it’s the Industry 4.0 of business information.
In the past, data mining was a lengthy process, privy only to IT experts who had the time and inclination to create lengthy reports that would be ignored by senior management.
Thanks to BI, data is now consumable, easy to use and accessible. It puts analytics in the hands of department heads, which powers better decision making. Being an IT whiz is no longer a prerequisite. Delivered in reports – via triggers and notifications – BI is single-handedly helping to define customer experiences and is creating competitive advantage.
This doesn’t just mean brushing over a Google Analytics report. In fact, in the age of progressive technology where information is readily available, comparing websites is the norm.
So, by using deep analytics tools, businesses are able to see both historical and live metrics, which track where they’ve been and where they’re going. This rich data provides recommendations on where to turn next in the right moment.
In practice, Business Intelligence is entirely customisable, and no two companies will ever feature the same data stack.
In the manufacturing sector, reports often include:
- Which products are the most profitable – which could therefore make a business case for a new marketing campaign to push sales in that area
- The highest revenue drivers – and therefore which products are good for cash flow, for example
- Customer segmentation – including geographical location, age, interests – and any growth areas to focus on next
These are just a handful of examples. At board level, these insights can power better decision making and, leveraging the 80-20 Pareto Principle, help the company to become more profitable with less effort.
- Cash flow forecasting – get up to date, accurate data to reduce risk and mitigate the need for overdrafts
- Expenses management – have visibility on which areas are driving the most expenses – which helps to influence decisions around cost-cutting
Using business intelligence software is the opposite of juggling cobbled-together spreadsheets or relying on basic, one-dimensional reporting.
- Production status – get real-time reports to see if production is early or late;
- Component planning – BI can plug into the digital supply chain, creating a powerful duo when it comes to purchasing;
- Lead times – get full visibility on warehousing, delivery trucks, supply, and the production line to monitor lead times – which can provide insights on where any bottle necks are;
- Order fulfilment – keep clients happy by monitoring fulfilment levels. Use the data to improve customer service.
These illustrations of BI are a drop in the ocean of its full capability. A bespoke model which automatically enriches data can give people the tools they need to help business groups move from data to decisions in hours, not months. Equip them to analyse production, sales, and revenue data securely—by utilising industry standard data security and access controls—while staying connected wherever they are.
This level of visibility has formidable benefits for a business’ bottom line. This can generally be split into two distinct areas: customer experience and internal processes.
With a better understanding of customers, their needs, what influences them, what would make them switch to a competitor – the list goes on – companies can adapt their sales, marketing, and operational processes to better suit the customer. It provides senior management with the knowledge to recognise areas of growth potential. This continual process of fine-tuning increases sales and reduces customer turnover, thus boosting profits and leveraging an advantage that competitors may not have even thought of yet.
Operationally, there are further benefits. The objective nature of data removes human subjectivity – which is valuable in several ways. Not only can people be prone to unintentional bias, but they can also skew findings and recommendations based on personal agendas. BI reduces this and boosts accountability – giving real time stats on the workforce’s performance – helping to improve productivity whilst leading to cost savings.
This neatly leads to efficiency – another key benefit of a digital supply chain. When processes are digitised and there is a reduced need for human input, throughput is increased. Previously slow, antiquated practices – which may have taken three hours for an employee to complete – now take minutes, saving capital which would have been spent on laborious wages, for profit-making areas of the business.
There is also the added value that comes from plugging into the digital supply chain. BI gives a clear indication of what’s happening internally. A digital supply chain can then communicate this with external organisations. This level of interconnectivity means that business networks can collaborate, allowing heightened visibility of demand, inventories, capacity and potential bottlenecks – creating a more resilient supply chain.
At Accu, we implemented BI and included a business intelligence manager, Beckie Pisacane. The investment has paid off already. We’ve begun:
- Mapping the data that shows how many orders we’ve dispatched day-by-day, allowing us to measure warehouse capacity and ensuring effective planning of resource
- Monitoring the number of times a product page is viewed and comparing this with the number of purchases – highlighting which product categories convert well, and helps us identify areas to improve
- Analysing on site search terms, allowing us to tailor search results with our customers’ needs in mind
- Identifying bestselling sizes, encouraging us to make smarter stock decisions
- Segmenting customers, providing direction to our customer development team, equipping them with the knowledge to know which customers to target
- Crunching the numbers, identifying opportunities and highlighting new manufacturing partners to work with
Very few companies are truly utilising the power of BI. In fact, just 24% of firms claim to have created a data-driven organisation – an actual decline from prior years.
Yet, the BI technology, data and organisational models to achieve an intelligent supply chain already exist. If you aren’t already harnessing your data, it’s time to start. And if you are already measuring and acting on that data, it’s critical for your business to take a more holistic approach to your BI as data velocity and variety continue to accelerate. Better customer service doesn’t always come at a lower cost, but the greatest competitive advantage goes to those who can first identify when it does.
Martin Ackroyd is the co-founder of component supplier Accu, which he founded in 2012 and is based in Huddersfield, UK.