Turn Business Intelligence Into Business Improvement

Fergus Gilmore
Managing Director of Deltek UK & Europe
Deltek
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Good decisions are based on sound knowledge and sound knowledge is built on facts. However, if there is no easy way to extract, digest or analyse the facts you need from your plethora of data, it can be rendered almost useless. Think of all your company’s analytical and reporting data as a foreign language you don’t speak. What do you do? Engage an interpreter to dissect it and produce an executive summary in your native tongue so you can understand it.

That’s exactly what the business intelligence (BI) functionality, built into your Enterprise Resource Planning software (ERP), does.

Business Intelligence explained.

According to the Advanced Performance Institute, BI is an umbrella term that refers to competencies, processes, technologies, applications and practices used to support evidence-based decision making in organisations. BI is a collection of approaches for gathering, storing, analysing and providing access to data, helping users to gain insights and make better fact-based business decisions, leading to improved performance.

For example:

  1. Analysing customer behaviours, buying patterns and sales trends.

  2. Measuring, tracking and predicting sales and financial performance.

  3. Budgeting and financial planning and forecasting.

  4. Optimising processes and operational performance.

  5. Improving delivery and supply chain effectiveness.

  6. Customer relationship management.

  7. KPI analysis.

You need the right tools for the job

To enable Professional Services organisations to turn BI into business improvement, many turn to technology. The best case scenario is that BI functionality will already be built into your ERP so that you can gain insights that are connected to all areas of your organisation.

But what should you be looking for and why? Most BI systems have five core components in common.

Data: Usually made up of applications, databases and spreadsheets containing information about your business’ accounting, time and expenses, human resources, customer relationship management, budgeting, etc. Metadata: Your data library – a way of taking the data and making sense of it by categorising and sorting in a way that is important and relevant to your business. Report-authoring interface: Your report writers need access to a straightforward graphic user interface.They need to be able to use information from the metadata and structure it in a way that the reader can easily understand. Consumer interface: This is the ‘face’ of the application that most people will see. It must be highly accessible, user-friendly and efficient. The interface must enable them to quickly and cleanly run the reports they want. Administrator interface: A facility enabling the system administrator to secure data, control the environment and monitor use. Metrics that matter: Mixing these core components with the metrics that matter provides the base recipe for turning business intelligence into business improvement.

For fast-growing project-based Professional Services firms, the following metrics are the ones that matter the most.

  • Revenue: Evaluate your revenue by organisation, project manager, customer and specific project

  • Profit: Profit is arguably the most important measurement of any business’ success. You should be able to assess profitability trends across contract type, ensuring that you are pursuing the right type of business.

  • Backlog: Your backlog analytics help you to track how much work remains. It also allows you to measure whether you’re operating above or below your budget.

  • Utilisation rate: A metric to evaluate how efficiently your employees are being applied to projects. Labour utilisation offers an insight into which employees are overperforming or underperforming. It also assesses if your staffing levels are appropriate or not.

  • Indirect rates: Comparing both your target rate and your actual rate over the fiscal year is a critical function and valuable metric.

  • Proposal win rate: Setting targets for proposal win rates across different parts of your business will allow you to evaluate the performance of your business development function.

  • Days sales outstanding: This is a measure of the time it takes to collect an invoice and convert it into cash.

  • Projects at risk: The ability to draw attention to any areas that need corrective action. Project-based businesses want to quickly know whether they’re operating projects that have the potential to generate losses, or if their projects will leave the company out of compliance with contract terms.

“It worked for us”

Ogilvy PR realised the power of business intelligence in business performance. As a leading global marketing communications firm with offices in more than 60 cities around the world, Ogilvy PR needed an enterprise solution to support multiple office locations. Ogilvy PR also needed to report numbers to its parent company and all employees.  

They chose a tool which has helped to streamline financial processes, increase visibility and accurately track time spent on projects. Now, their account managers can track project costs and status in real-time. This improved visibility helps their agency managers better understand profit and loss areas, allowing them to make appropriate adjustments. Period-close now takes half the amount of time it used to take, meaning the finance teams can report key figures to Ogilvy PR’s parent company without large data exports. Ogilvy PR CFO Andrew Kochar says: “Everything is tracked in one system and things are running smoothly. Revenue is being generated, invoices are being prepared and sent to clients, vendors are getting paid and reporting is easy.”

Data-rich and knowledge-rich

Extracting the right and precise information from your business systems is critical for making good, fact-based business decisions - so you can turn them into the catalysts for improved business performance.By adopting a smart business intelligence strategy, which is complemented by a tailor-made project-based ERP with integrated BI functionality, it is possible to be data-rich and knowledge-rich. Use business intelligence to improve your small business' financial performance by understanding your financial past to create a profitable future.

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