Business analytics, Business Intelligence and Performance Management were terms that almost sounded like a fad just a few years ago. But as understanding of its potential grew, it was a revelation to realise that analytics is critical for virtually every aspect of a business.
What market challenges will my organisation face a few years out? What should I do now to secure a robust market share in three years’ time? What type of resources will I need? Which area of my business is vulnerable? Which one of my products suit a particular market better? In years past, the answers to such questions almost completely relied on instincts of the CEO and CFO. Today, with Analytics, Business Intelligence and CPM, the answers are more based on evidence and statistics.
Business Analytics is a powerful tool in the hands of a CFO. However, the true potential of analytics depends on a couple of factors.
- The quality of the questions being asked.
- The ability to collect data that can address those questions.
- The accuracy of the data gathered.
- The ability of end users to draw meaningful insights from the data in an easy and effective manner.
With the right discernment, a CFO armed with Analytics can provide valuable insight into customer spending patterns, create a unique value proposition and identify new services and revenue streams well ahead of competition. A CFO armed with the right BI tool has the potential to steer the organisation into a healthy and profitable future.
How to roll out BI & CPM in an organisation
As with any business process, it is essential to have a robust system and a leader in order for it to be effective. The CFO ideally is a perfect choice to lead the BI roll out process.
The CFO has access to much of the unprecedented data of the company. This data is perhaps being collected from various companies or branches, supply chains, production processes and customer interactions. It’s highly likely that the CFO is already using analytics in his or her own way to better understand where the business is strong and where it needs improvement or even how to allocate resources more efficiently. As the profitability chart fluctuates, analytics and BI can be a game changer.
The CFOs role as a steward of the most important resource of any business, which is money gives them the credibility and trust to lead the BI roll out process. They tend to have the wisdom to discern patterns and forecast the implications.
Getting the buy-in from Department Heads
Without the support of the CEO and absolute buy-in from department heads, even the most carefully planned BI roll out will most likely fail to deliver the aspired results. The CFO and the BI team should ideally work closely with Department Heads to identify precise questions for the BI tool to answer. That would mean asking the tough questions such as “What pricing is ideal for a customer with a particular spending pattern?” or “What product should be pushed or probably pulled out of the supply chain?” There could be many more questions, but do remember that each of those questions should have a specific business purpose. The analytics results should trigger a business response. Simply printing out pretty charts and endless tables of consolidated figures in front of the department heads isn’t going to accomplish much.
Accurate Data availability
Trying to paint an easily understandable picture of the health of the business means the data underlying the insights produced by the BI tool MUST be impeachable. Ideally, data should be entered into the system only once and be accessible to address many different queries. The more often the same data is entered in multiple ways, the more likely the data will not be consistent. Unreliable data can easily undermine your entire BI and Analytics effort.
For near to ideal outcome, the Analytics team should also have a team of staff who can help the CFOs determine and implement the analytic capsules. Having people who understand BI and CPM and who can ask the right questions is as important as having accurate data. People with the ability to interpret data, provide insights and tell a fact based story can prove to be valuable assets.
In conclusion, many early adopters of BI and CPM have only begun to scratch the surface in leveraging the true potential of Business Intelligence and Corporate Performance Management. I would like to encourage CFOs to seriously consider BI and CPM. It will not only prove to be a vital contribution to the growth of your company, but also raise your individual competence to a whole new level. Organisations without a good BI, Analytics and Corporate Performance Management tool will very likely be left on the side-lines in the coming months and years.
Santosh Chandran is the Business Development Manager for BOARD Management Intelligence at Olympic Software. He regularly blogs about business intelligence and corporate performance management. You can follow him on Twitter or on LinkedIn. Please contact him directly if you would like to find out how BOARD can improve your business results through better decision making, phone 09 980 3964 or email: firstname.lastname@example.org