Johannesburg, 20 Nov 2008
It`s during times of economic downturn that business intelligence (BI) tools really come into their own because if used strategically and properly, BI can drive profits even when times are tough.
That`s according to Paul Morgan, managing director of ASYST Intelligence, a focused provider of BI and data management solutions to medium and large enterprises in South Africa.
"BI provides companies with a central view of what`s happening in the business. If a company`s bottom line is not looking good, BI tools provide the ability to take a deep look at what`s going on and get the nitty-gritty of why and where they are losing money. BI takes the guess work out of it and helps companies make better business decisions to improve the bottom line.
"It is during times like we are experiencing now that companies which have invested in BI can really see a return on that investment. Now is the time to focus on better BI," says Morgan.
He continues: "In the face of the global economic crisis, rising costs and slow growth, tightly managing performance becomes even more critical. But without BI to show KPIs in a quick and highly visual manner, executives are left to ponder about who or what area of the business is not performing.
"For a manufacturing company for instance, BI can provide invaluable insight into how individual suppliers are performing; who`s delivered late or in the wrong quantities and, which supplier`s inefficiencies are costing the business money. This enables the company to properly measure performance and puts it in a better bargaining position when it comes to negotiating costs and setting service deliverables and standards.
"BI can also be used to monitor and analyse customer performance for a realistic picture of who the most profitable customers are, and then make better decisions in terms of the allocation and use of resources in line with that.
"Customer profitability cannot only be analysed on invoice value - there are a lot of variable cost factors that determine final profitability such as transport costs, sales costs, support costs and so on that need to be taken into account", says Morgan.
When it comes to reporting, BI is invaluable in providing real-time information that can be used to improve efficiencies and improve decision making. Morgan cites as an example the Johannesburg branch of a car company which receives an order for a particular part that it doesn`t have in stock.
"Without real-time information on stock levels at other branches, that branch might, after a few phone calls to other branches in the region, fail to unearth the part needed. That branch may then make a decision to order the part direct from overseas when the exact part they need is gathering dust at the branch in East London.
"Shipping that part from overseas instead of from another town has big cost implications and it`s inefficient. Then there`s the cost of having the part sitting unsold at the branch in East London. Having accurate real-time information readily available is absolutely critical for better business decision making," says Morgan.
He adds that from a marketing perspective, companies could use BI to streamline their marketing initiatives and control costs rather than slashing the marketing budget altogether.
"This is relevant since marketing budgets are like IT budgets when it comes to being decimated during tough economic times. Companies can work within the constraints of a limited marketing budget by adopting a more targeted and strategic approach based on sound intelligence, enabling them to speak to the right customers, at the right time and with the right message. This way they don`t waste resources contacting the wrong customers or the same customers twice because of poor data quality or an inaccurate view of their customer base," says Morgan.
He concludes: "BI enables companies to dig into their data for an accurate perspective of the business. BI allows companies to unlock important information that they can actually use to improve the way they work, how they allocate their resources, where they spend their money, streamline efficiencies and drive revenue.
"These things are vital to survival and ongoing profitability with the toughening of the economy."
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