How intelligent is your business?
Business intelligence relies on the quality of information a business collects and it?s ability to sift through it, enabling the ability to make informed decisions. Information is power and for small businesses it can provide the competitive edge that can make all the difference. So how intelligent is your business and is there anything you can do to improve your understanding of the data you collect?
Business intelligence (BI) enables businesses to make decisions based on hard data, rather than gut instinct. It is the ability to interpret information the business collects as a result of its day to day activities, ensuring staff are able to access key information in a way that supports better decision making. Being able to access information at the appropriate time is critical to providing a quality service or product and can be as simple as being able to retrieve a clients contact details or as challenging as knowing when to order new stock or hire new staff.
In fact I would suggest that running a business without access to this kind of information is tantamount to running blindfolded! Business planning is just one tangible result, but being able to retrieve data as and when it is needed is the foundation of good decision making and customer service. Understanding how your business works is essential to success and it isn?t always as obvious as it might sound.
In 2008 we analysed our client base and discovered that we spent a significant amount of time and energy on a small number of clients who were not generating sufficient revenue to warrant the resources. This allowed us to work with the clients to focus what it is they really needed and reallocate resources of our own onto other areas. During the recession of 2009 we were therefore working smarter, not harder and this was reflected in our profit margins and helped us survive and thrive.
The foundations of business intelligence
As I have already said, business intelligence is based on the quality of data you collect, but perhaps more importantly the accessibility of the data to each member of your team. Obviously, you need to gather the data, before you can think about how it is distributed, but the cornerstone of your businesses intelligence is the data itself.
During a workshop earlier this year a client said that their key objective was to get better visibility throughout their business and it isn?t the first time we have heard this. A couple of years ago we were working with a retail business with units across the south of England. Their primary objective was to get a better understanding of what stock was held within the business and where. They have had a difficult couple of years, but recently told us that he system we had developed for them had definitely helped them meet the challenges of a declining market.
For new businesses, it is worth thinking about what you collect as early as possible, as this will avoid issues as your business grows. All too often we see small businesses rely on poor quality information gathered in a haphazard and random way that hinders the business as it grows.
For established businesses, you need to review how and what information is collected and then consider how this can be used. Most established businesses will have systems in place, but we regularly see a collection of disconnected systems that duplicate information and are often inaccessible to key personnel.
How to improve you business intelligence
Start with the basics, look at what you need and then check that there are processes and procedures in place that ensure these are followed. Do not allow individuals to design these, as they will only cater for their specific needs and not consider the businesses overall needs. You will often find, especially in larger businesses, that departments get so frustrated waiting for the business to provide solutions that they end up evolving their own systems that ultimately end up creating silos of information that are inaccessible across the entire business.
For the vast majority of businesses the first system they invest in is their accounts system (Sage Line 50, Quickbooks, etc.,) as keeping accurate records of your income and expenditure is a statutory requirement. In our experience accountancy firms will have a pseudo Information Technology (IT) department that will help businesses to set-up and train staff on how to use it. This is a classic example of the needs of one function in the business driving forward a solution that meets their needs without considering the rest of the business. This isn?t a criticism, but clearly demonstrates that the need to take a holistic view is essential when considering how information is collected.
Getting the basics right is not hard, it just needs careful consideration and an awareness of the issue in the first place. I have worked with micro businesses that do this better than corporates and used to be shocked at how some businesses survive on the information they gather.
We have recently completed a project that will ultimately improve the clients businesses intelligence, but the challenge they are facing at the moment is gathering their business data into a single source so that we can complete the data migration and launch the system. Their business model uses a loose collection of associates that support the core team delivering a service within a corporate environment. Each person within the business has traditionally collected data (stored on their laptops) about the clients and a central administration function manages the financial elements of the business. Their new system is designed to pull all of the data into a single platform that everyone within the business to access data relevant to their role within the business. However, they are finding this a real challenge as they have never put in place any processes or procedures for ensuring information is collected in a structured manner.
These days there are so many ways information can be collected there is no reason for this kind of issue to arise, but as any small business owner will tell you, there is always something else that needs doing. However, not doing something as simple as collecting your clients contact details properly will come back to haunt you sooner or later.
When considering what information needs to be collected, think about some of the following:-
- Can you access up-to-date contact details of all your clients, prospects, suppliers and partners?
- Do you know what your sales pipeline looks like and do your sales staff record the progress of all opportunities?
- Do you know what you need in order to fulfil any contractual obligations you have?
- What stock are you holding and when should you order new stock; this is especially important for high value items or where lead times are measured in weeks or months?
- What is your expected profit margin for specific contracts?
- Are you getting a return on investment for specific activities; this is especially true within your marketing expenditure?
- Are there areas within the business that are less profitable than others?
- Who are your most profitable clients and why?
- Can you anticipate issues, or are you always fire fighting?
This is by no means an exhaustive list and depending on the type of business you run, your requirements will differ, but it should get you thinking along the right lines. At this stage you should be able to define the data needed to provide the answers and can put in place the procedures that ensure the data is collected.
Your business intelligence is reliant on the data you collect, so to improve it, you need to focus on the information you gather and make sure everyone in the business understands why this is so important.
Don?t swamp people with information, focus on the most important areas and tailor it to each persons role within the business. We often find the information is staring people in the face, but they can?t see the wood for the trees.
If you would like to find out more about how we can help your business improve its intelligence please contact us on or take a look at some of our recent case studies on the main site.
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