Many small and medium-sized companies can easily, quickly and inexpensively implement BI in their organization, and achieve transparency in performance, increase the revenue, reduce the costs and grow profits!
Previously BI was reserved the largest companies with a stable economy, but the recent years’ technological developments and a revolution in the price levels have made BI accessible for even the smallest business or organization. It has made it easier to quickly identify the optimization possibilities and improve the financial bottom line.
What is Business Intelligence?
Basically BI is a graphical representation of all your business data across your IT systems, that contains information about your customers, suppliers, partners and employees.
All the knowledge is converted into easily understandable colorful graphs and dashboards at the same place, so it is easier for you to get an overview of the company’s historical performance and current status. The new generations of BI solutions will automatically also analyze data and identify trends and user behavior, and together with the expectations to the future, it can provide a well-documented forecast, and identify potential optimization possibilities in the daily procedures.
BI can be divided into three phases:
- Collection and preparation of the company’s data (for example finance or sales systems)
- Structuring and presentation of this data (reports and dashboards)
- Interpretation and application of the knowledge from this data to optimize the daily business processes.
- Increased transparency, understanding and documentation of the company’s performance and development.
- Easy identification of the optimization opportunities
- Fact-based decisions instead of gut feelings.
- Increased revenue
- Lower costs
- Major profit
5 reasons why small companies should use BI solutions today!
Why buy expensive software, hardware and maintain the costs for operation and maintenance, when you can buy flexible online access to the same – even for a significantly smaller amount of money?
And at the same time reduce the dependence on expensive external consultants! Besides these benefits, here are furthermore 5 reasons why small companies should implement BI as soon as possible.
1. Transparency in performance
With a Cloud BI solution, you will quickly and easily get an authentic picture of your company’s performance across your IT-systems – and all together in a single location. You can in the same dashboard quickly get an overview of the consolidated revenues, expenses, profits and cashflow – in relation to the budget. At the same time, you can get an overview of the company’s pipeline or the expectations for sales in the nearest future. Final you can receive alerts for aberrant behavior and results – both in terms of historical performance and budget.
In this way you don’t need to switch between the applications in order to get an overall status of the business development. Dashboards and reports can be broken down to the transaction level, and thus provide a transparency and confidence to information.
It is furthermore easy to share the company’s performance, status and expected developments in the future with other employees, partners, auditors, banks, investors and other stakeholders, in an easily understandable and recognizable way.
2. Improved efficiency and savings
Cloud BI solutions are becoming so intelligent that they not only report historical events, but also include a tentative version of Predictive Analysis (data driven) which analyzes trends and patterns in the data. It means that the new generation of BI solutions can identify and propose potential optimization opportunities, for example cost savings.
If you also have recorded a budget, you will be extra insured. Today BI solutions can automatically monitor and alert you, if performance either deviates from the normal level or if budgets are not maintained.
Repeated deviations may affect the budget observance in the long term, therefore it is better to deal with the issues in the start-up, before it develops into serious problems – all things that can be read directly on the bottom line.
3. Increase sales and profits
A BI solution will help identify which industries, products and services that generate the most profit for your company. Once you know the attributes of ‘core customer’ the important thing is to sell more to these costumers, and find new customers who are similar to them
I once spoke with a determined business man, who lived by selling popcorn, slush ice machines and all kinds of accessories. He had many small costumers, but was particularly proud to have landed a huge contract with the largest and leading kiosk chain, in the country he lived in. More than 50% of the year’s turnover came from this costumer, and he used more than ¾ to serve this costumer. The challenge was simply that this major customer had negotiated very low prices, which resulted in a very low profit. Therefore, he had a high turnover, a high time consumption, but low profits. Whereas his smaller clients, which gave a low turnover and was less time-consuming, gave a bigger profit with an inferior service.
If this talented business man, could replace the large costumer with several smaller customers, he could with the same effort have given few a lower revenue, but have more customers and a lower risk, with the same time consumption – but a larger profit for same service.
It is not necessarily a question about big customers and orders – but about understanding how you can get more profitable sales from existing as well as new customers – and this is something a BI solution can help with!
4. Cheap and subscription based
Previously BI solutions were expensive and complicated to implement. First you had invested in expensive licenses and hardware that required maintenance. Then there were expensive external specialists who generated reports and dashboards, and caused a natural dependence on individuals.
Today you can buy automated Cloud BI solutions online on monthly subscription terms, without constraints and obligations, and for a very low price. A few integrates automatically with your various applications and has the most necessary out-of-the-box standard reports and dashboards.
Most providers even offer a free trial period of up to 30 days – so you easily can qualify whether you get the best solution and value before you buy. Your payment is continuously adjusted according to the number of users. In this way you have no unnecessary cash tied up in unimportant licenses and hardware – and you always have the latest updated version, optimal security and back-up of your data.
5. Quick and easy to implement
Today you no longer have to upload your data to BI solution in the cloud manually. You are no longer dependent on having access to data specialists that have made meaningful reports and dashboards. It is now possible to get your own BI solution in less than one minute with three easy steps:
- Register your company as a ‘customer’
- Choose from integration list the applications you use in your business (remember to have your username and password for each application ready)
- Standard reports and dashboards are generated automatically in less than 1 minute
Most of the solutions today have a form of report generator or Data Exploration Tool, that advanced users can use to develop new reports or examine data from other angles than the standard reports do. It requires that you have a background or prerequisite for working with data, otherwise it does not make sense.
Take full advantage of your BI solution with a budget
BI and budgets are closely connected. Together they form an effective tool to ensure that everyone in the company is focused on what matters the most. It will help accelerate efficiency, increase revenue, reduce costs and grow profits.
With the BI solutions Predictive Analytics (PA), the data-driven part of a BI solution provides insight into deviations in relation to earlier performance, but cannot judge whether the results are good or bad. To judge whether the result is good or bad, it must be related to an expectation or a budget.
With PA and a budget, you will be able to monitor the performance deviations in relation to the average or historical normal performance level, and in relation to the budget or expectations.
Issues will possibly be caught in the bud, and are addressed before they develop into serious problems.
Most of the small companies can content with an overall budget based on key figures and do not need long, heavy and sometimes trivial detail-based budget processes.
The most important thing is to set some general indicators, so everybody knows what is expected.
Today all solutions can be discovered on the internet, for example at MoreReporting that automatically can load the accounting data and generate an overall draft budget based on the recent period’s results. Then there may be adjusted either percentage or manually. It does not need to take more than 10 minutes to make an acceptable overall budget.
How much does it cost to get started with BI?
Sometimes it can be a jungle to find out the prices on BI solutions, and there can be really big differences between how the prices are composed. Some products are based on the number of users and others on the number of integrated systems.
There can be great variety in price and functionality from one provider to another. So watch carefully what is included and what is not.
Prices for an online BI solution start from about $ 20 a month for a company and the first user.
Afterwards you pay the $ 10 a month per additional user.
The easiest way to success!
My recommendation would be to start with your finances. Then you are guaranteed the opportunity to ‘pick some low-hanging fruit’ and achieve a fast yield.
Managing the finances of a company is crucial for success and progress. Too many small companies are too focused on whether there is more money in the account at the end of the month than at the beginning. It does not necessarily give an authentic picture of business performance, and can often result in wrong decisions.
A company that has mastered the following four key economic indicators – is a company in control.
- Cash flow
Previously it was usually with queries such as:
- Who is TOP 10 customers in the company in terms of revenue?
- What is our TOP 10 category?
It is very interesting, but it is far more important to see and understand the developments in the last 12 months in the TOP 10 customers’ turnover, and the trend or pattern that can enlighten us in relation to the customer’s behavior.
Or how our TOP 10 items of expenditure have developed during the past 12 months. Are they going in the right direction, or do we need to take action?
Anyway it is only a question about getting started! There is a pretty good chance that your competitors already have started or are considering to start in the very near future.