| Just as military intelligence works to give armies and | | | | as non-billable overtime rates, fall out of control. |
| generals an upper hand on the battlefield, business | | | | 4. I know when my sales reps/managers are on |
| intelligence (BI) seeks to give CEOs and CIOs a tactical | | | | target, and I can intervene in time to make a |
| advantage in the business arena. Business intelligence | | | | difference. |
| is fundamentally concerned with transforming your | | | | Customer relationship management |
| organization's operational data into an accessible store | | | | 1. I can identify low-value customers and try to improve |
| of high-value information (called a data warehouse) | | | | their value or design them out of my business. |
| and distributing the right information in the right way to | | | | 2. I am able to spot customer relationship problems |
| the right people at the right time. | | | | early by monitoring leading satisfaction indicators, such |
| In both business and military operations, it's easy to see | | | | as product or service quality. |
| the correlation between the quality of intelligence and | | | | Sales and marketing |
| the success of operations: Those who comprehend | | | | 1. I'm able to target high-value customers in order to |
| and act quickly upon relevant facts have advantages | | | | lower my marketing risk. |
| over those who do not. | | | | 2. I'm able to rank the success of product promotions |
| For this reason, intelligence has value to the business | | | | to know what's effective by product and market |
| organization. Naturally, tools and technologies to collect | | | | segment. |
| and distribute of information--or to improve its | | | | 3. I know what's in my sales pipeline. |
| quality---will be embraced and employed quickly. | | | | Finance |
| In this article, we'll take a look at some questions that BI | | | | 1. I can identify underutilized assets. |
| can help answer, and we'll offer a few examples of | | | | 2. I'm confident that I have the facts to make the right |
| how business intelligence is used. | | | | capital asset choices in next year's budget. |
| Two examples of business intelligence | | | | 3. My budgets are based on accurate histories and |
| Some believe BI to be the magic differentiator | | | | current trends, not on pie-in-the-sky figures, guesses, or |
| between great and mediocre companies. Consider this | | | | sandbagged numbers. |
| example. | | | | Supply chain |
| The Big Bank had a target of acquiring 200,000 new | | | | 1. I can easily identify how much I'm spending with each |
| accounts, a number that would require mailing offers to | | | | supplier and use that information to negotiate lower |
| 10 million prospects using a 2 percent return rate, an | | | | costs. |
| expected rate for direct mail. Instead, the Big Bank | | | | 2. I know which carriers are most often damaging my |
| used BI techniques to mail to a "refined" subset of all | | | | shipments (and on which routes) and/or delivering them |
| prospects yielding a response rate of 12 percent. | | | | late to my customers. |
| Instead of mailing to the 10 million prospects, BI required | | | | 3. I'm able to predict product demand and trade that |
| the bank to send mail to about 2 million, which | | | | information for more cash and less inventory. |
| generated the required new accounts. In addition to | | | | Strategy management |
| reducing cost, the average profitability of an acquired | | | | 1. My employees view individualized key performance |
| customer was three times higher than usual because | | | | indicators, aligning them with the corporate strategy. |
| data mining had targeted the customers whose needs | | | | 2. My employees have instant access to a knowledge |
| best matched The Big Bank's services. | | | | base of information that helps them to do their job. |
| Here's another scenario. | | | | Human resources |
| A quick-change oil company takes information from | | | | 1. I'm able to use leading indicators to preempt health |
| 2,500 stores and has information uploaded each night | | | | and safety incidents. |
| to servers at its headquarters. The chain's main office | | | | 2. I have the leading information required to measure |
| immediately analyzes key operational measures: cars | | | | and manage employee satisfaction and increase |
| serviced, costs, revenues, profits, and trends. | | | | employee retention. |
| By 5:30 A.M., performance data is available to the | | | | What could you do? |
| company's managers who can check current revenue, | | | | If you answered "No" to many or most of these |
| average ticket price, time required to do each job, and | | | | questions (or similar questions), your business |
| other performance measures. Franchisees with | | | | processes may move too slowly in the |
| multiple locations can see consolidated views, as can | | | | technology-driven Internet age. You'll likely have |
| the company's regional managers. | | | | increasing difficulty maintaining a grip on your |
| Rate yourself | | | | customers, prices, profitability, and employees as |
| Now that you've read these two examples, try to | | | | more-enterprising companies leverage technology, |
| answer the following questions to see whether your | | | | improve their processes, and capture market share. |
| information systems allow you to accomplish the | | | | But if you answered "Yes" to many of these |
| following tasks quickly, easily, and directly. Answer "No" | | | | questions, yours is likely an intelligent organization. You |
| if you depend on others to procure information or if | | | | possess superior intelligence regarding your |
| your business and performance measurements lag | | | | employees, customers, partners, and operations. |
| after the fact. | | | | People at all levels can manage their own affairs, have |
| Revenues and profitability | | | | intimate knowledge of your organization's strategy, and |
| 1. I can identify the products, services, and channels | | | | know where to find information needed for further |
| driving my revenue and profit. | | | | analysis quickly and directly. |
| 2. I can rank customers and customer locations by | | | | Prabir Sen, |
| profitability. | | | | M. |
| 3. I am automatically alerted when critical costs, such | | | | |