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Business intelligence: Use data to improve performance

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19th Feb 2013
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Based on a series of user case studies and interviews, Rod Newing puts the case for using data analysis to improve commercial decision-making.

Accounting systems were originally designed to accurately record transactions and since they came into use during the mid-20th century, consultants and resellers who installed the systems typically created a permanent set of reports to be printed out at regular intervals from the accounts.

As the speed of business change increased, these reports failed to keep pace, so data was often rekeyed and then exported into a series of increasingly complex, cumbersome and error-prone spreadsheets.

“Our disparate systems meant that access to information was restricted and the way we

worked was inefficient,” says Tim Coletta, logistics and operational director for Lewmar Group, an international marine equipment supplier based in Havant.

“There were no reporting structures in place to record or report past performance, nor for future budget projections. Forecasts used to be out-of-date by the time they were produced.”

Accounting software vendors responded to this challenge by providing business intelligence (BI) functionality. These analytical programs give users direct access to all the data in their systems. BI is interactive, so users can examine historical, plan, budget and forecast data and build their own reports. These can be enhanced with graphs and calculated key performance indicators (KPIs). The software can also configure different views of the data, so each user can see what matters to them in their own personal dashboard, available via a web browser and on their mobile devices.

BI is intended to help managers be more proactive and productive, by improving their insight into what’s going on in their departments and sharing historical and future performance data from all parts of the business. This broader, up-to-date view helps them make faster and more informed decisions not only to solve problems, but also to prevent them from occurring in the first place. The overall result is to promote growth, increase responsiveness, drive down costs, boost efficiencies, improve cash flow and increase profits.

Lewmar Group, for example, worked with reseller Touchstone to implement Microsoft Dynamics AX, which is centrally hosted by Nildram Limited. The system measures KPIs and analyses every aspect of the business. The software highlights any problem areas such as orders behind schedule or potential stock problems. Critical data is presented in simple Microsoft Excel spreadsheets and customised according to the needs of each manufacturing division, sales office, or customer.

“Now, real-time information is immediate and we have an integrated view of all business information,” says Coletta. “Reporting has improved by 100% and we are able to concentrate our considerable skill sets to make best use of resources in those areas that will add constructive value to our business and, ultimately, our bottom line.”

Another company that has benefited from BI is I'Anson Brothers, a family-owned feed manufacturer that distributes around the world. It implemented Microsoft Dynamics AX with the help of Nottingham-based Sense Enterprise.

At I’Ansons, Microsoft Analysis Services data cubes and Reporting Services provide a management dashboard that ties financial KPIs to production and transport KPIs.

“Our chairman, Chris I’Anson, has the knowledge and experience to be able to walk into the factory and sense from the sounds and activity if something is not quite right,” says Andrew Birch, information systems manager. “We are translating that family knowledge and experience into KPIs and traffic lights so that if the indicators are green, we know that everything is OK.”

Instead of coming in to see how things are going on the factory floor, the I’Ansons chairman can check progress from a few green lights through Windows Mobile on his tablet computer.

Inventory management and cash flow are critical to most organisations. Overseas Trading Ltd, a global distribution company, reduced its inventory by a third after purchasing a finance system through reseller m-hance. The system’s business intelligence analytics and reporting tools support the smooth running of its business and assists with improving vital decision-making.

“Through better inventory control, and the ability to understand where changes can be made, our stock levels are down to £2.3m, a reduction by over one-third from 2008,” says financial director Phil Jennings.

“We now have more control over working capital and can employ it more effectively. The system has enabled us to manage through the recession and we have come out of it in a much stronger position.”

Similarly Dixie, a Danish fashion accessory company, only had basic account management and a very limited form of inventory control. “We had to open multiple systems to find relevant information, so we needed to control the business on many more levels and in a much more integrated and automated way,” says managing director Flemming Warrer Jensen. “We were missing a complete overview of finances, inventory, sales, and purchasing.”

Using Microsoft Dynamics NAV 2013 with TRIMIT Fashion, an integrated fashion business solution from Danish IT consultancy CORNATOR A/S, Dixie improved management visibility into business performance using “role centers”, which present relevant information to management, salespeople, purchasers, and inventory staff alongside their everyday tasks so they don’t have to search for it.

“A quick glance at the screen is enough for me to keep abreast of key figures and everything important,” says Jensen. “From orders, purchasing patterns, slow-moving individual items, the actual inventory value, cost prices, turnover lists, and so on.”

Inventory management has become 20% more efficient at Dixie. Even with significantly fewer inventory staff, the company has set a new turnover record.

“Uncertainty about numbers and results has been replaced with facts,” Jensen says. “It puts us at ease and helps us make better decisions. In the long run, it can have a positive effect on our profits, liquidity, and growth potential.”

Although there are many individual reasons and benefits from implementing BI, a good system will energise all areas of the business. The last word on BI systems goes to C Jeffery Wright, CEO of Urban Ministries Inc. “They present a wealth of extremely useful information in simple ways and much earlier in the business cycle,” he says.

“We can look at our business in new ways, easily identifying opportunities for top-line growth and bottom-line savings.”

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