When it comes to Business Intelligence and what it means within organizations, these days it is primarily Sales Intelligence – Slicing and Dicing data to get insights into which products are selling in which regions/areas/cities, which salespeople are selling which products, etc. They are all possibly different views of the same data but provide different insights for different purposes. They also make a lot more sense, and are more useful if a time dimension is involved. Is a product in a region selling more or less compared to last week, last month or last quarter? Is a particular Regional Sales Manager’s sales of Product A trending up or down or staying the same?
Companies also use Financial Intelligence – slicing and dicing Income, Cash and Expenses to see where income is coming from, what are the trends there, time-wise, and where they are spending their money and what are some of the trends there?
Determining the company’s overall performance to a larger extent is Process Intelligence (Business Process Management + Business Intelligence). Organizations increasingly are outsourcing many of their functions – product design, sourcing materials globally, manufacturing, order management, order fulfillment, collection, Human Resources, Finance and Accounting, etc. End-to-end performance of business processes, especially when it includes third-party actors is extremely crucial. It is like placing your own customers in the hands of third parties, literally.
Guess what? Sales performance and Financial Performance to a large extent is dependent upon Process Performance. If a customer support person provides lousy support, word of mouth from that customer will make your Sales Intelligence show blips in product sales and your Financial Intelligence will reflect blips in income down the road. That’s how they are all connected.
Process Intelligence and slicing and dicing information down to the level where meaningful improvement can be implemented can be as important as Sales Intelligence and Financial Intelligence, if not more. Process Improvement is not possible with aggregate avarages. You need detailed drilldown information so that you fix problems at a level that needs to be fixed. If Customer Support surveys indicate overall negative values, you need information at a customer support person level so that you can reward those that are performing well but address those who are contributing to the overall negative values with training, education or termination.
What is surprising is that Operating Expenses in companies are from 40% to 80% of Income. A large part of this goes to Business Processes, naturally. If they are service oriented companies, the percentages are larger – say a Phone Company or a Electric Utility or a Global Logistics provider like UPS. Profitability in many of these companies is usually in single digits. Using Process Intelligence to improve business processes has the potentail of even doubling profitability or turning a loss making company into a profit making company.
Sales Intelligence and Financial Intelligence are more like rear-view mirrors. They show you the end results of your efforts the past time period. Process Intelligence can be more like the steering wheel which can guide where the vehicle is going! It’s a goldmine waiting to be exploited!
It is wiser to find out than to suppose – Mark Twain