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Hi, I'm Brenda Murphy, one of the hundreds of writers here at LifeTips.com. Enjoy these 107 Business Intelligence Tips! If you’re a business, why not hire the expert writers at LifeTips? And if you’re a writer, apply for freelance writing gigs.
Forecasting In The Supply Chain
Business intelligence is all about employing processes and tools to achieve efficiency in commerce. These technological approaches include all business functions that occur across the enterprise, including the supply chain.Assumed within this quest for efficiency is the ultimate goal of maximizing profit through minimizing operating costs. In order for this to become reality, the performance management-savvy organization must frequently rely on the application of analysis techniques like maximizing gross margin through measuring inventory return on investment or minimizing total operating expenses. Accordingly, supply chain optimization must look at the general problem of putting goods into the hands of one’s customers at the best cost and highest yield.
The classic approach to solving this optimization problem has involved traditional forecasting based on historic demand and prediction of future events. This approach is applied to aggregate data resident in smaller data repositories that require little manipulation. The analyst then manually manages any variability in the metrics. Using this forecasted demand, a plan is crafted that addresses the salient supply-related objectives, such as manufacturing rate, plant resource scheduling, re-stock strategy, or transportation modes.
The BI supply chain forecasting and reporting ability resident in today’s software solutions provides the technical ability to access and manipulate larger databases more swiftly. The metrics are gathered and manipulated using automated processes and key performance indicators using advanced capabilities, like scorecards and dashboards. Some vendors have integrated these features into their BI products and applying multiple modeling and analytic techniques to supply chain data to enhance the optimization problem.
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Cognos Tip: The Elements Of An Effective Business Intelligence Software System
Cognos.com Tip: Development of a corporate performance management capability using a business intelligence tool can be complex and resource intensive. In order to make the right decisions when selecting the vendor and software that will, arguably, change the company forever, understanding the basic elements that should be included is valuable. According to a 2006 white paper from the vendor Cognos, there are five key elements incorporated into their product suite:
·Scorecarding - Link initiatives and projects to strategy with metrics and strategy maps. Use the same scorecard metrics to drive enterprise planning software for integrated performance management.
·Analysis - Explore and analyze large volumes of data covering all dimensions of the business, whether stored in OLAP or dimensionally aware relational sources.
·Reporting - Create any type of report, for any user, with any data.
·Dashboards - Deliver Web-based dashboards with information from different data sources in a single visual report. Provide an at-a-glance snapshot of the business.
·Business event management - Business event management goes beyond the basic notification functionality provided in other products to automate the decision-making process, launch business processes, and integrate with Business Process Management (BPM). Where human intervention is required, through decision-process automation, event management notifies the people who are accountable and provides the relevant information they need to resolve the issue.
Many vendors offer similar business intelligence tool groupings, both integrated (like Cognos) and tool-by-tool. Careful research will lead the procurement team in the enterprise planning necessary to acquire an effective system.
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How Performance Intensive Is Your Business?
The book “The Performance Manager,” Mosimann, et al, cited work by the McKinsey Quarterly that identified three characteristics of business performance:
Transformational – activity involved with extracting/converting materials into finished goods.
Transactional – processing materials from basic form to applied products.
Tacit – procedural activities, such as retail sales or performing services, requiring tacit or experience for success.
Among the observations made regarding these interesting categories of business, the authors note that there have been more economic gains in tacit work activities.Is this possibly an effect of technology?Then they note that investment continues to be heavier in transactional activities.Is this a result of the decades old trend of shedding labor in favor of automation or off shoring?Finally, it is suggested that it was harder to sustain a competitive edge in both transactional and transformational business.Does this follow the adage of: if it’s easy to do, everyone does it?These observations seem to raise interesting indicators of how intensity of work performance can help classify your business.
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Cognos Tip: Chasing Numbers: Sound Financial Reporting And The Role Of Business Intelligence
Cognos.com Tip: Establish a higher priority for better planning tools and forecasting software. Such a planning process should focus on key economic and business drivers, the KPIs (key performance indicators) of performance planning. Try to make these improvements: ·Consistency across corporate planning and forecasting ·Plan from the top-down ·Streamline the process cycle time ·Forecast the future with both historical data and predicted key economic drivers Furthermore, the ultimate goal from pursuing this approach is suggested to be a transition to rolling forecasts and a subsequent organizational planning revolution.
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Deploying Reporting Software
Deploying reporting or any other type of business intelligence software capability is a complex and difficult process that is often hard to standardize.Help in accomplishing this capability may come from a concept pioneered by the BI developer, Cognos.It is called the BI Competency Center and is based on three suppositions:
·The deployment must connect to senior management, users, and vendors.
·There must be adequate financial support from the CEO and CFO levels.
·Appropriate staffing must be provided by the CIO function.
In order for the deployment to be successful and lead to financial and performance gains, the following observations apply:
·The business reporting software must be used at every level of management.
·The functional business areas served must be data driven (retail, multi-site, or vertically integrated manufacturing are examples.)
·The functional engine must be provided from within the IT department.
·Corporate executives must be the ultimate users.
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Cognos Tip: Understanding The BI User Community
Cognos.com Tip: Business intelligence standardization seeks to define and homogenize each of the many facets of the technology to enhance corporate understanding among user groups and functional disciplines within the organization. Make sure you recognize the various users and their particular needs. There are six general user groups: ·Executives ·Managers ·IT Administrators ·Professional Report Authors ·Suppliers and Customers ·Business Consumers
Executives, managers and business consumers make up fully ninety-five percent of the BI user community. The following characterizes each user and identifies their basic BI needs.
Executives are the key decision makers within the organization. Their influence spans the strategic and tactical operations of the business and they are the main drivers of most policy components. Their needs are somewhat unique compared to other users and include information regarding key metrics, function appropriate updates and status alerts, and secure access to information.
Managers comprise at least a quarter of the community and consist of the tactical-level executers of corporate policy and are responsible for directing most functional business area activities. Their broad functional responsibilities require individualized right of entry to many BI capabilities, including multi-dimensional data query (e.g. drill-down/through) for subtle informational kernels, user-friendly Web-based BI authoring, and, infrequently, analytical and performance measure management.
IT Administrators are a key BI user group, including information architects, technical support, and other IT professionals that configure, deploy and support the entire BI technology suite. This vital assemblage requires the complete range of BI access, functionality and control for all users. They also require vendor-provided systems and tools that possess ease of maintenance and infrastructure compatibility.
Professional report authors, also called ‘power users’, are expert authors that are the developer’s ‘users of choice’ for BI software, despite representing only five percent of users. They require advanced BI capabilities in the areas of report authoring tools, large-scale distribution ability, comprehensive BI capabilities for data sourcing and outputting, speed of data access, and capability response.
Business consumers are the rank and file members of the organization’s functional business area teams and share their basic needs with the supplier/customer group. Each group requires little interaction with the reports they are privy to, yet require the information to be presented clearly and succinctly.
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Effective Visual Presentations In Performance Reporting
The spectrum of business intelligence (BI) users spans a group of professionals ranging from programmers, engineers, IT specialists, and scientists on the technical side to salespersons, marketers, accountants, economists, HR pros and operations types on the business side. Additionally, managers and executives are included, cutting across both. In some senses, the management and executive users are frequently removed from the "heat" of the BI battlefield, thus requiring special treatment due to the more generalized nature of their job descriptions.
Presenting business performance metrics to this user group is one of those cases where special treatment in often needed. Specifically, performance reporting techniques that are geared to more effective visual presentation. Stephen Few, in a White Paper prepared for the Cognos Corporation, discussed a number of interesting characteristics of effective visual displays. Graphs, he suggests, were invented to give meaning to quantitative data beyond that contained in a table of numbers.
He goes on to note that both serve a very different purpose and should be selected to present information very carefully. For example, tables are wonderful when the information to be presented requires the observer to choose values. Tables are also useful when precision in the values is required. Graphs, on the other hand, create relationships between values through the discerning of size, shape, or color. As such, there is no substitute for a properly designed graph when communication of trending, patterns, or exceptions is desired.
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Cognos Tip: How To Make Decisions In A Business Performance Management Setting
Cognos.com Tip: Decision-making is one of the most important functions an executive or manager is called upon to perform. How does one optimize their decision-making skills? One approach is to employ components of the set of techniques known as business performance management.
Study and analysis has shown that most decisions involve an iterative cycle involving three core questions: · How are we doing and where do we stand? · Why are we at that state? · What else should we be doing? Performance Management encompasses systems, methodologies, metrics, processes and software technologies to identify ways to improve overall business performance. These performance management software techniques, commonly associated with business intelligence (BI), enable executives and managers to answer these core questions.
