Over the years, organizations have invested billions of dollars in new ERP systems and other enterprise technologies. However, most fail to extract better information, decision-making, and overall business value from these investments.
We recently wrote about a common dynamic along these lines: most organizations fail to achieve the last mile of digital transformation. They focus too much on core things like financials and inventory management but fail to spend enough time on the truly revolutionary capabilities that will transform their businesses and maximize business value.
Business intelligence is among of these commonly overlooked game-changers. After spending considerable money on new enterprise software (ERP, customer relationship management, human capital management, supply chain management, etc.), one would expect better information and decision-making. But this typically is not the case.
So what exactly is the business intelligence and how can it help your digital transformation? Below are some talking points to unpack this concept in more detail.
Why business intelligence is so important
Digital transformations and ERP implementations have historically focused on automating the plumbing of organizations without a corresponding improvement to information analysis and decision-making. Put another way, it’s not enough for enterprise technology to enable more efficient and effective business processes. Without better data and information, organizations are missing a big opportunity to maximize their return on investments.
As enterprise technologies get bigger and data captured by organizations increase in volume, so too does organizational pressure to make better use of that information. Data is meaningless if it doesn’t improve operational visibility and decision-making, so business intelligence is a critical mechanism to make better use of enterprise systems and its data.
Definition of business intelligence
Business intelligence (BI) is a type of technology that allows employees and stakeholders to make sense of a huge volume of data and transactions. BI is a type of technology that mines data, interprets it, and presents it in a way that is easily digestible. Perhaps most importantly, it interprets data in a way that decisions can be made more confidently.
Business intelligence tools often include dashboards that enable users to slice and dice data in a number of different ways. It allows people to conduct what-if analysis based on data in the system. It also provides a toolset that can pull and summarize data from multiple sources, such as separate ERP and CRM systems as an example.
Beyond business intelligence: predictive analytics, machine learning, and artificial intelligence
Some used to view business intelligence as something interchangeable with reporting, but it is much more than that. Reporting typically focuses on providing historic data in a summarized fashion, but when leveraged effectively, BI can provide a forward-looking view of what is likely to happen in the future.
BI technology has advanced to provide predictive analytics to anticipate trends and patterns based on historic data. For example, statistical analysis capabilities within BI tools can identify correlations between different variables, allowing organizations to better anticipate what might happen in the future. This can be used in a variety of situations, such as predicting what will happen to sales if we expand into new markets.
Machine learning and artificial intelligence are two additional offshoots of BI. Technology can anticipate trends and problems before they happen, identify anomalies within real-time data, and “learn” to predict patterns based on real-time data. For example, ERP systems such as SAP S/4HANA have incorporated machine learning into even the most mundane processes, such as accounts payable. In this example, invoices are automatically paid while exceptions are flagged for human intervention – saving considerable time and labor costs.
Best business intelligence tools
There are a number of leading BI tools in the market. Some are incorporated into broader enterprise technology offerings, while others are standalone BI offerings that function regardless of which back- and front-office systems might be used. Here are a few examples of some of the leading BI tools:
Tableau. A very common, popular, powerful, and easy-to-use system that can make sense of data from a variety of sources. For example, we recently worked with a large manufacturing company with 3 different ERP systems. They used Tableau to integrate data from these systems while incorporating that data with outside third-party data such as macroeconomic indicators to anticipated future demand.
Power BI. This BI software is owned by Microsoft, which can either be used as part of a Microsoft Dynamics 365 implementation or as a standalone BI tool. It has powerful dashboards, analytics, and other tools that can provide better insights into an organization’s operations.
Hyperion Financial Management. This Oracle product is more of a middleware and financial consolidation tool, but still falls in the realm of business intelligence. It allows organizations to compile financial information from multiple general ledgers and financial systems to create a global and consolidated financial view.
Leading ERP systems. In addition to specialized BI systems, ERP technology can also provide BI and predictive analytics capabilities. Products such as SAP S/4HANA, Oracle ERP Cloud, and Microsoft D365 are benefitting from big R&D dollars to enhance BI functions. These tools have the advantage of being fully integrated with operational and transactional data in the ERP system, which can streamline and simplify things.
Next steps in your business intelligence journey
There are four things that every organization should do as they embark on their business intelligence journeys:
Identify your business intelligence needs and wants. The first step is to identify where and how better BI could help your organization. Start with the low-hanging fruit: reports and dashboards that you don’t have that you wish you did. From there, move to more creative ways that better BI and analytics might be used to improve your business and help you make better decisions. Independent consultants such as our team at Third Stage can help with this process.
Clean up your data. A good BI tool is only as good as the data feeding into it. If your data is dirty – which it probably is if you’re like most – then your BI and predictive analytic outputs will be flawed. Take the time to clean up your data so you can better map it to potential new BI tools, while also instituting master data management governance to ensure the cleansed data stays clean over time.
Consider innovative ways to improve your BI processes. Envisioning your ideal future state may be difficult if you don’t have experience with BI tools. You may not recognize the plethora of innovative ways that modern BI tools can enable better processes and decision-making. Leverage outside help to help you reimagine how your business processes and analytics may look with better BI technology. Again, this is an area that our team at Third Stage can help with.
Be sure to manage organizational change effectively. BI tools can be transformative and disruptive in nature, which makes it more difficult for employees to learn. Be sure to augment your technology investments with plenty of investments on the people and organizational side of the equation. This is the best way to maximize the value of your BI investments.
Regardless of where you are in your digital transformation journey, business intelligence should be a key part of your overall plan. The benefits of better visibility, better decision making, and more efficient business processes can be significant – especially when compared to the cost.
Feel free to contact me if you would like to arrange a Zoom call to discuss your BI or digital transformation journey in more detail. I am happy to be an informal sounding board as you continue your journey!