B-Eye-Network published a nice post, written by Nancy Williams, where she commented how companies are using BI to drive profits and business performance. She compared a recent IDC study of corporate priorities that drive the use of consulting firms, with a her survey, about how companies are leveraging business intelligence. The top three of IDC study were improving operational efficiency, creating a more effective business model, and reducing costs, and she got similar results in her survey.
She commented that well-designed BI applications give companies the ability to measure, manage, control, and improve business performance. From scorecards and dashboards that report on performance, to sophisticated analytics that uncover root causes of unfavorable trends and predict the impact of alternatives courses of action, BI is a critical tool in the modern manager's toolkit. She mentioned some examples:
Business Intelligence and Operational Efficiency: For the COO and operations management professionals, BI provides precise and granular information for cost analysis, analytical tools for monitoring and improving customer service and product quality, and high-quality historical facts about demand for forecasting and capacity planning.
Business Intelligence and More Effective Business Models: From a strategic perspective, a more effective business model is one that enables a company to achieve sustained growth, competitive advantage, and suitable profitability. Business intelligence provides critical information about growth and profitability trends from a number of key perspectives
From a tactical or operational perspective, BI provides CFOs and financial management professionals with a precise and granular understanding of the relationship between operational performance and financial results and better tools for performance management, forecasting, and working capital management. BI provides the CMO, sales leaders, and marketing professionals a key tool for better customer segmentation, more precise campaign targeting, improved customer service and customer retention.
Business Intelligence and Cost Reduction: Business intelligence allows cost analysis from multiple perspectives, such as activity costs, relevant costs, incremental costs, fixed and variable costs, and controllable costs. Armed with better cost information, managers can reduce costs in intelligent ways that leave critical capabilities intact.
In order to leverage BI to achieve your company's strategic priorities, it helps to have a BI strategy that is well-aligned with your business strategy, she wrote. She recommends companies take the following key steps for leveraging Business Intelligence:
1. Do a structured analysis of opportunities where better BI would be useful for improving operational efficiency, creating a more effective business model, and/or reducing costs.
2. Prioritize the BI opportunities according to business impact, technical risk, business adoption risk, and competitive impact.
3. Develop a business case built around the prioritized BI opportunities, which together comprise a BI portfolio.
4. Assess your current state capabilities for executing a BI program and identify key gaps, if any.
5. Develop a pragmatic roadmap that includes program management activities, BI application projects, technical infrastructure projects, business process change management projects, and generation of BI program performance metrics.
In addition to ensuring tight alignment between the BI program and strategic business priorities, this approach will enable the CIO and BI Director to do a better job of meeting the demands of business users, she concluded.
Nancy Williams co-wrote with Steve Williams, a very good book called The Profit Impact of Business Intelligence (I wrote a book review on this book)
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