When I started at Phocas and was asked what I did, I said I worked in ‘business intelligence software’. I found many people were thinking ‘what the hell is that?’ so now I explain business intelligence software helps people make better ‘data-driven’ decisions. And most of us do it every day without even thinking about it.
What does a fitness app and business intelligence software have in common?
Everyday apps we use on our phones help inform decisions around topics such as health and fitness. If the data we are getting does not suit our purpose – we decide to take different action:
- Apple health – if it looks like you won’t hit your step target, you take the dog for an extra walk
- MyFitnessPal – if you are closing in on daily calorie limit, choose a low-calorie alternative for dinner
- StrongLifts – if you missed a few workout goals, perhaps de-load the weights next time to prevent injury
These apps don’t create any new information, they use 1’s and 0’s generated by the sensor in my watch or figures that I have entered in the MyFitnessPal app (a CRM for calories) to provide the visual cues which keep me on track.
Just having the app doesn’t lift the weights for me or make me eat less calories, but it makes it a lot easier to identify potential issues that could detract from the goal – being healthier.
So, we’ve seen how data is used in an everyday sense to make decisions and we can see how easily this would translate in a commercial setting. E.g., Using an ERP to check last years’ purchase order for CAD software to ensure you aren't overpaying.
However, in a business that has multiple sales and purchases with a single customer or supplier, many times in a month, it’s impractical to think that the above method can be used to manage this process. Aside from missing important variables, it could even end up costing you 2 or 3 annual salaries for sales and purchasing administrators.
Business intelligence for a healthier balance sheet
Gartner, the industry research body for data, defines business intelligence (BI) as an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance. I prefer this summary from Swain Scheps in BI for Dummies: BI is a process. “It's about creating a culture that makes evidence based, rational decisions. (A culture) that seeks out a clearer picture of its past and present.”
But put simply, BI is about using the data your business creates to minimize the grey areas and obliterating ignorance, much like in the examples of the mobile phone apps.
I use the fitness apps mentioned previously to help guide me towards my goal of having a healthier body. If I were running a business, I might use a BI tool like Phocas Software to guide me towards a healthier balance sheet.
The beauty of BI is that it is company-wide, you can gain insight into trends, patterns and opportunities across all types of data. This is especially useful around understanding people and our irrational actions, such as the way we research and purchases goods and services online.
Business intelligence to understand customer behavior
“We were entering a market with some very established players,” said Stuart Worgan, Finance Director for Ruroc. “We were always confident in the design and graphics on the helmet, as well as the strong online and social aspects to our business. We knew if we could get the product right, and get it out there, with people riding in it, we would be able to sell it globally.”
Pitting themselves against these players could quickly become a ‘David & Goliath’ battle for market share. They needed an edge. If they could accurately interpret and predict consumer patterns, in the most tumultuous times in recent history, they could turn the tables using their agility to their advantage.
Traditional methods requiring heavy reliance on an IT resource would have made it extremely difficult to do this – cue Phocas business intelligence. Having used the platform at a previous role Stuart saw the impact it could have on this business and by leveraging the tool they were able to see that "When a country goes on lock down, we have naturally noticed a drop off in sales for that market for 24-48 hours,” said Stuart.
“On day three, we have seen a rebound, and that’s allowed us to be more targeted with our social media activity and online advertising. We use Phocas to track these sales trends, allowing us to be more proactive with our planning.”
Supported by their use of BI, Ruroc have seen massive growth in this area adding $1m sales in a single day.
Ask 10 people working in business intelligence and you’ll get 10 different definitions of what they do. Ultimately, BI is about embedding data in your culture so it’s available and up to date for every decision – because data is rational and unbiased. BI software helps consolidate all data from across a business into a single source of information so that everyone is basing decisions on the same figures. Running a business on data can give you a competitive advantage and compete in tougher markets.
For more information about business intelligence download this ebook: Building the case for business intelligence