The goal of Business Intelligence (BI) is simple: Efficiency. BI allows companies a closer look at how they are operating by taking inventory of where they are doing well and where they can improve. The purpose of BI is to leverage data to make decisions that improve and optimize revenue.
So what does the BI process look like for companies? This is three-fold.
- Look at your historical data to uncover opportunities in your own operations that drive efficiency in both revenue and costs. This is an essential first step in your efforts.
- Use predictive analytics to estimate how changes affect you.
- Use coherent and consistent tools (developed using both your historical data and your projections) to inform and speed up your decision-making process.
In this article, I’ll breakdown why using BI is critical for businesses and provide tips to help you leverage the three-fold BI process.
Why You Need BI in Times of Crisis
In times of crisis, Business Intelligence is an area of your company that really shines. Revenues are decreasing and budget problems come into play. By leveraging BI, you’ll discover things you may already know about (like the obvious revenue changes), but you’ll discover things you didn’t know, like the root cause of those changes and how they affect specific levers within your organization.
That is why a BI framework needs to be set in place. If your company doesn’t already have this set up prior to the crisis, it is not too late to get started. If it does, now is the time to leverage it to answer your questions and align your decisions to your company goals.
You might ask yourself, should we be investing right now? What is the benefit to the company, to our customers, and our employees?
This can seem counterintuitive for most companies because when a crisis hits, your first instinct might be to cut costs. But cutting costs doesn’t mean you stop investing. You must maximize efficiency and returns.
Think about the 2008 financial crisis. During this time, BI was one of the few industries that grew at an average rate of about 10% per year. We might even argue that we would not have the modern BI tools and technologies we have now at our disposal if it wasn’t for this time. At that time, companies realized that in order to survive and grow, they needed to innovate and invest in areas where the money would be best used.
For example, BI is one of the fields that British Airlines invested in even in the midst of the 2008 crisis. They needed to know where their revenue opportunities and cost-cutting opportunities were to help rebound and grow after the crisis.
Tips for Leveraging BI in a COVID-19 World
During the current COVID-19 crisis, much like during the 2008 crisis, most companies are looking at operations, sales, revenue, and costs. The high-level challenges businesses are facing are the same. Companies are losing money, and that’s not a surprise. However, leaders need to know much more than that.
Leaders need to know in excruciating detail what is driving their revenue at both a local and global level. Local legislatures are different everywhere. What might be relevant for the U.S. (even specific states), might not be relevant for countries within Europe. That’s why it’s important to narrow down consumer behavior and assess what is relevant for your audiences.
Here are a few tips and things to keep in mind as you are trying to gain clarity and develop your business foundation for moving forward.
- Make time to benchmark and assess your new goals. Clarify what your ultimate goal is (as a company, and as a business unit) and define how you measure it.
- Do a targeted exploration of your data to uncover unlikely or overlooked revenue drivers and/or areas of cost inefficiency.
- Analyze your data in a daily fashion instead of weekly. News and policies are constantly shifting because this is an exploratory period, and this is having an effect on your business.
- Take a look at your consumer demographics. For example, are QSRs doing enough to offset the loss in revenue from dine-in?
- Create test scenarios, measure their impact, and test the likely outcome against your defined goals.
- Select the optimal scenario relative to your goals.
- Measure your achievements against your goals, taking into account any new data available.
- Don’t be afraid to change tactics in case the approach taken does not get you closer to your goals.
It doesn’t take relatively long to put together dashboards that are automated and at hand to help you make decisions. You just need to ask the right questions and be mindful of the sheer amount of data that you’re collecting, which is the key to your company’s growth in the post-COVID-19 era.
When business is going well, it’s easy to overlook how much data your company is collecting. It’s even easier to neglect maintaining your BI framework that turns valuable insights into action.
However, COVID-19 has expedited the need for all companies to put their data to work to speed up the decision-making process.
A comprehensive BI practice can help you define the proper metrics to survive a crisis better, and these times can be a silver lining for many businesses. Companies are forced to revisit metrics they may not have been paying attention to in the past, and as a result, they must establish new goals and be mindful of the current situation we are all in.
Whether you need to start a BI and Data Visualization team from the ground-up or already have one developed, Cognetik’s proven expertise can help businesses can through this together. Contact us if you have any questions, or even if you just need someone to bounce ideas off of.