“Great! We bought a BI Tool!”… Now What?
Read our LinkedIn Post.
“Great! We bought a BI Tool!”… Now What?
Read our LinkedIn Post.
Suppose you have followed my suggestion in my previous post where I presented the different levels of Analytics usage that any company can find themselves in: Impaired, Localized, Coordinated, Company-wide, and Competitive.
First, let’s put out again the definition of Analytics that we’re discussing here:
Analytics is the effort to discover and communicate useful patterns within data
You are now aware of the potential power of analyzed data. Here are 5 requirements that will help you to evaluate your existing reports to get them in shape for the next level of Analytics
#1 Reports Must Be Worth The Cost
Measure the time it takes to compile and generate a report. If the time is significant, calculate how much are you paying out of the company’s revenue for the resource to generate that report.
If the time is not significant, measure how long does it take to update the report the next time it’s needed. Add the two measurements together then calculate the cost as the above.
If both measurements added are still insignificant, than you have one of those “magic” report, whose benefits may need to be re-evaluated.
Do you have a budget for company-wide reporting? If the answer is no, it’s time to rethink the way your company does reporting.
A truly useful report must be up-to-date when the report consumer needs it. Sounds obvious, doesn’t it?
Unfortunately a lot of truly useful reports must be compiled from multiple data sources. Generating an always up-to-date report is manageable for one source. But how about four? Six?
Each of these sources usually has it’s own timing of when is the best time to retrieve the data, also if you have 5 data sources (example: 3 spreadsheets, and 2 databases), most likely you also have multiple ways to reliably retrieve it.
Without some kind of automation, how many hours of human resource must be dedicated to this?
A single set of data may be processed and analyzed in many different ways. Before generating a report for a particular role within the company, be it the CEO, Managers, or even a Field Operator, it is prudent to “walk a mile in that person’s shoes.”
If done correctly, each of the role in the company will have their own specific reports that can truly help the person in the role to see more of what is happening and to anticipate and adapt to changes.
Bonus point if you have a screen for the person in the role to input changes in policies/regulations and process, so those can be used to tailor the updates of the said reports. Hint: You need a well designed Data Warehouse to accomplish this.
What do you call a 23 Excel spreadsheets per day reporting? Some may call it impressive, productive, or “Wow!”
But the receiver of these reports call it “useless.” Being the receiver of a mountain of non-aggregated, indigestible data does not make someone productive. It makes the person look for an EXIT sign.
Producing a lot of reports must result in an equally significant increase in visibility and decision-making quality and speed. To do this, reports (or even better: Dashboards) need to be consolidated at the appropriate level.
Does your company have a process in place for this?
Reports that are truly useful have names, which indicate their sole purpose in life. Here are a few examples:
In your next Management Meeting, ask your executives and managers to come up with the list similar to the above. And compare it with your existing reports, if many of the reports don’t have a name and don’t serve a singular, clear, actionable purpose, question their existence.
Be ruthless, life is too short for useless reports.
We make new reports or tweak existing ones to meet the 5 requirements above. Our clients love truly useful reports that we compile and generate for them because through those reports, they see not only what is going on, but also where to go next.
In summary, we save our client’s money and increase their company-wide efficiency by:
We invite you to contact us if your company is ready to make your data work harder for you.
Compete in what? In your industry, your marketplace. Against who? Other companies who are using analytics to gain market advantages.
Analytics is the effort to discover and communicate useful patterns within data
Surely by now this is not news to you anymore: Companies who took the time and made the effort to discover useful information from data patterns stand the chance to use the resulting insights to corner the market, shorten sell cycles, and often times, they seem to be on top of things before the “things” are even known or popular.
So let’s talk a little bit about what has to be in place to prepare your company for the already-fiercer competition where those who are still oblivious to the potential usefulness of their business data, vs those who have focused and invested in analytics and are reaping the benefits.
(Although in the end, we know that this is not much of a competition, it’s more like watching a long-distance race between a ship without a compass vs one with a GPS system)
It’s actually very simple. When it comes to analytics, every company falls into one of these stages:
Which one of the above stages is your company in currently?
Despite what we hear in the media today about the buzz surrounding analytics and Business Intelligence, most companies in the world are still operating within Stage 1-3.
Case in point, I regularly encounter company owners who declared that they are doing very well without all these “Data Analysis.”
Let’s think about this. The only reason the above statement is true at the moment is because most of their competitors are still operating the same way (ship without a compass). But at the rate that even small companies started to put in place processes and systems to gather metrics (data warehouses, business alerts, Truly Functional Dashboards(TM), IoT systems, API integration, etc.) things will soon accelerate towards analytical competition.
The real question is: Who is going to be the first to install the GPS on the ship? Them or their competitors?
So what a company to do? In my next post, let’s discuss what you can do to take your companies to the later stages. What sort of personnel would you need, how much coordination and buy-in would you require from the executive team and what role would that play, and lastly, what technology is available to us today and beyond.
Until next time.
In my last post, we’ve established that the right level of visibility is crucial to be able to react — or even better, anticipate – changes that can hit your business from any angles.
Let’s take one of the most important aspects of a business: Customers, and see how we can design a system that provides the right level of visibility to customer information through out the company.
The word “system” has its own share of abuse, so to prevent that here, we’ll narrow it down to a system that tracks Customer Scores only.
Why Customer Scores?
A Customer Score is a number we assign to a particular customer or customer type. When it is applied to all customers, then we can rank them from the most valuable to the least.
This is one of the most important component of running a successful business, yet it is one of the most delayed if not avoided. Reason? Because it is tricky to figure out consistently , it takes a lot of thinking, and nobody has time for that, furthermore, after you figure out how to do it, then you have to come up with a continuous process to cope with the myriad parameter changes
Now, really, who has time for that? Our most successful clients do find the time.
Before we begin, the system we are prescribing here (in truth, all the systems we at nextCoder build and design for our clients) is designed with these rules:
Having established what system we need to deal with Customer Scores tracking, let’s get started by discussing what does it take to calculate a score for a customer.
Notice that I am not simply asking how much does a particular customer contribute to your revenue, that is just the first part of the equation, but what matters equally is how much does it cost to retain them.
At first blush, the first question (how much do they contribute) seems to be an easy one. We just have to ask the Account Receivable department, right? Until we start to ask the follow-up question, are they current on their invoices. Suddenly what seems to be an easy question started to become tricky to figure out.
The second question is much harder to answer. In reality, it cannot be answered until you have a system that asks the right question to every single department in the company involved in servicing the said customer.
The third question is how long has the customer been with the company? This question matters especially when the business depends on customer retention.
But what if my customers comes and go (and I have 100,000 of them)?
If the business only touches the customer for a short period of time (to buy a product, for instance), then a better question would be how likely for the customer to come back or to recommend the product. TIP: E-Commerce systems and their hooks to analytic services is your friend here. (Yes, we help our clients with this also, it’s quite amazing to gather data from six marketing platforms to answer a single question).
Ready for number four? What is the projected value of a customer? The earlier in the sales process we are able to assign the score to a customer, the better visibility we would have. In this context, visibility means the ability to forecast and predict revenue pipelines more accurately. This is crucial for business with long sale cycle and hard to predict trends.
NOTE: Obviously, depending on the nature of the business, you may end up with 5th, 6th, or even more aspects that you have to consider. But for the space that we have here, this will get us going.
Out of this exercise, we get Customer Scores formulas.
What does a good Customer Scores system look like? For starters it would have these components:
Once this system is running, everyone in the company will slowly gain the right level of visibility on Customers. Only at this point ideas, innovations, shortcuts without compromise on quality could emerge organically (unforced). Why? Because everyone is thinking about how they can help serve the customer better within the constraint of their own department
This is the fruit of visibility.
Furthermore, when everyone in the company has this kind of visibility, then as a company, you would be able to anticipate industry-wide changes and you will be in a position to withstand crises that would otherwise bring you down.
Do you have a Customer Scores system? Wait. Scratch that… Do you have at least a Customer Scores system? How about Employee Scores system, Vendors Scores system? How about Profit Scores? there are bad profits as well as good profits, right? Is there a good scoring system for Costs?
In this post we focus on the Customer only because it will take a book to discuss the others aspects. But the thrust is the same. Whether you have 10 or 100,000 customers, you still have to “See” them in the right context that is relevant to your business growth.
So it comes down to: Do you want your business to grow? If so, you need visibility, all the time. Without a system that is designed to provide that for you, how can you maintain the visibility over time?
Too many companies are too busy running and not looking for information that can result in better directions. This is why nextCoder was founded, to come alongside companies and build systems that give them visibility where it matters.
If any of the above resonates with one of the needs within your company, hit me with a note and let’s discuss. And of course, follow this space for more Business Intelligence tips. This post is also published at our website: nextcoder.com
In my previous post I’ve established why visibility is very important in running and growing a business. And how the lack of visibility if both a vicious cycle that can result in the decline of a business, and that visibility is both ways, top-down and bottom-up.
Now let’s explore further what exactly do we mean by visibility? In other words, what needs to be visible and to whom?
The short (and useful) definition of visibility:
Being able to see at anytime what is going on in the business that is relevant to the question or task at hand
Executives have the task of making strategic decisions that should affect the business positively. From this vantage point, visibility is being able to see what is going on to make not only good decisions, but timely ones. In practicality, this translates to knowing what trends are in effect within the business. In other words where are things going based on the events that happens at certain periods of time.
NOTE: Sampling of data taken at certain intervals is a common way to get this kind of visibility. The cross-section of the company where the sample is taken can also provide important insights.
Employees doing daily tasks are the main source of data in which the sampling can be performed. Every aspects of the tasks that can be measured should be measured. Visibility here means more than just being able to perform the task, but also to know why a task is required and how the task affect other areas across the company.
The more successful a company in providing this visibility, the more it can work as a unit rather than disparate departments busy protecting their own interests.
This is truly what is meant by the term Business Intelligence.
When we can see clearly what is going on in the business, we can decide which action to take and the timing of which the action is taken. So the main motivation to increasing visibility is to know what to do when certain things transpire in the business that needs attention, way before it becomes a problem.
More importantly, is the long term effect of visibility:
The increase in the overall performance of the company in conducting business. At the extreme level, this could mean becoming a game-changer in the industry. I don’t need to belabor why this is important, it’s what makes a company valuable, to anyone who deals with it.
Let’s take an example, let’s say company A found out that the revenue is increased over the same period previously but so does the cost. Let’s use the concepts we learned above about visibility to find out why.
In this situation, the first step is to find out what caused the revenue increase. Let’s say that the increase of revenue is caused by more new customers purchase the products.
Then we take measurements across departments in the company on how much each department either contribute or is affected by the increased revenue (new customers).
NOTE: This is a good example of looking at things differently, instead of focusing on the Sales Department vs Accounting, we start to get the feel of what is taking place at other departments because of this known fact (increased revenue).
Upon analyzing the result of the measurement, we noticed that the Customer Service calls spiked up during the period and the procurement department also are busy sending out part replacements.
I turned out the new customers are not equipped with enough knowledge about the product, resulting in higher refund rate (dissatisfaction) or parts replacement due to damage.
Knowing that, the company tasked the marketing department to come up with materials that can be incorporated with the product packaging, so the customer has to go through them in order to enjoy the product.
The above scenario sounds like an easy and typical problem to solve. But consider this:
Interesting questions, isn’t it? And it’s a set of questions that is rarely talked about. Let’s consider some answers:
As we can see clearly, without visibility, this whole process would be much slower if it happened at all.
Now let’s make this closer to home. Were the above story to happen within your company (or the company you work for), what would be the outcome?
Do you have enough visibility?
In a form of a list, this is Visibility for starters:
Visibility is something that we don’t miss until bad things start to be noticeable. Companies who are proactively putting in place a system — Business Intelligence tools such as a Data Warehouse, Dashboards, fall into this category — that allows for visibility to be achieved, will find out that the more they use it, the more effortless for them to not only react, but also to anticipate changes and “roll with the punches” so to speak.
Next post, we’ll see what is the make up of a good system that provides the 6 aspects of Visibility listed above.