One of the more commonly used tools in BI is the “dashboard,” which is generally an electronic display of business information such as sales, budgetary, market, and production information (among many other types) focused on displaying “Key Performance Indicators” (KPIs) which are updated in near-real-time. Dashboards can be tailored to the end-user, so an accounting professional focuses on what is important to her while a production manager can see vastly different information that may be more relevant to him.
You might be thinking ‘Why would we need to invest in developing dashboards when we regularly review this type of information during business meetings?” There are two main advantages to BI over traditional report-based information. The first is the timeliness of the information. How often do you actually review reports? Weekly? Monthly? Given the speed of change in the business world, knowing something a week or a month after-the-fact is nowhere near fast enough. Imagine what would happen if your check engine light was delayed by a week! You would likely have been left stranded by the side of the road days ago. In that vein, how much does it help you to know that your customers shifted 50% of their purchases from you to a competitor a month ago? Couldn’t you much more effectively deal with the problem if you knew about it sooner?
The second advantage of BI is that this information is designed to be concise. Most managers don’t lack available data to pore through. Businesses tend to go overboard when it comes to writing and publishing reports, using reams and reams of paper or spreadsheets that are well-intended but often poorly executed. Report writers often think it’s better to have too much data than not enough. What this leaves decision-makers with is the monumental task of sifting through these reports to get what they need. Not surprisingly, most often the information is just ignored- after all, who has the time to trudge through all of it? BI’s focus on KPIs forces report designers to provide only the minimum amount of information needed to allow decision makers to understand things at a glance. This saves time and helps motivate users to actually look at the information regularly.
How does this fit into Lean? The DMAIC process (Define, Measure, Analyze, Improve, Control) is highly dependent on metrics for feedback into how effective improvements have been as well as to aid in identifying areas that need priority attention. If this feedback process is delayed by weeks or months, it can seriously hamper a team’s efforts. Imagine a team that has been working to improve material yields at a key production process. They made several improvements and needed a way to check their progress. In a report-based business this could mean they have to wait until the following week or month to get a report telling them how effective their efforts have been. A BI-based business could potentially provide them with that information only hours after the improvements are implemented, allowing them to adjust on-the-fly and refine their improvements immediately. Projects that used to move in weekly increments now have the chance to move daily or even hourly.
Have we convinced a few of you that BI is worth a try? What’s next? As usual, it depends. Obviously the BI field is heavily dependent on computer-based systems so if you’re still using a paper-based accounting/ERP system, you’re not going to be able to do much without upgrading. For the majority of businesses using computer-based systems, there are many options. Some larger systems like SAP already have BI built-in with many more adding this functionality regularly. There are also stand-alone services like Microsoft’s Power BI that can interface with a range of services like SQL servers, Excel spreadsheets, and a wide range of cloud-based services (Quickbooks Online, Salesforce, etc.). Interested decision-makers should talk to their software providers to see which service would work best. The cost of the service depends on the provider and the scale of the BI implementation, ranging from a few dollars a month into the thousands and tens of thousands of dollars for large operations.
As the technology improves, BI’s role in business decision-making will increase significantly. Dashboard technology has already moved out of the IT department onto the end-user’s computer, allowing non-coders to design, create, and publish their own dashboards simply and efficiently. This will change BI’s from being utilized only by the large companies that can afford a team to administer them to being accessible by even small businesses who just want to know how they’re doing at a glance.
