BI Best Practices Benchmark Report, Part 2: Reasons to Implement

Author: Bit Software
Date: 02- 08- 2011

BI implementations are driven by a variety of immediate business needs and long-range strategic goals. Organizations in pursuit of operational excellence are often motivated to promote data-driven decision making. According to BI Gleansight study, „just as often, the move to establish or enhance the BI platform is driven by a recognition of gaps in current analytic capabilities, where information that should be readily available is too hard to obtain”.

Analyzing all 273 responses received, Gleanster achieved a top 9 of the most important reasons why a company should use BI tools.

1. Make smarter business decisions.

According to Gleanster`s study, BI provides an organization with the opportunity to run its business more intelligently:

- by making the facts of the business readily available, BI eliminates guesswork.

- by making the meaning of facts and statistical trends easier to understand through techniques like visualization, BI promotes better interpretation of information.

2. Identify new revenue / growth opportunities.

Top Performers put a premium on this use of BI, finding answers to questions like:

- which products and categories are hottest now, based on total revenues or growth?

- what do customer service calls tell about customer frustrations or new and improved products and services?

3. Reduce operational costs and waste.

When it’s time to examine the budget, all companies need to know where the money is going.

- while some of that information is available in standard financial reports, BI proves its worth by allowing a drill down from high-level summaries to more detailed information.

- at a minimum, one can identify the areas with the greatest cost growth to be scrutinized and the managers whose cost control discipline deserves to be rewarded.

4. Make timely course corrections.

- by speeding the collection and analysis of key metrics, BI gives managers the information they need to make adjustments throughout the month.

5. Identify competitive threats and risks.

- by gathering the right information and presenting it in the right way to the right people, a company can expect to have an early warning system for dangerous trends.

6. Increase customer profitability.

More than three out of four Top Performers set this as a goal for their BI initiatives. Why? Because:

- one of the best applications of BI is in the context of customer analytics, specifically learning who are the most profitable customers and why.

- BI can help with the process of segmenting customers according to common characteristics and track whether changes in strategy or tactics are having the desired effect on customer profitability.

7. Improve employee productivity.

- BI systems make important and commonly requested information readily available, improving the productivity of managers and workers alike.

- BI can power a performance management dashboard that tracks employee productivity in general.

8. Reduce time to market of new products and services.

- by using BI to systematically track operational efficiency and tie it to a program of continuous improvement, you should be able to impact operational metrics like time to market.

According to „BI Best Practices Benchmark Report”, this was one of the areas where they saw a gap between Top Performers and Everyone Else, with the leading companies giving a 10% higher ranking to reducing time to market as a reason for implementing BI.

9. Measure employee and departmental performance.

- BI provides a consistent and systematic way to measure the performance of companies, departments and people.