It’s an unfortunate truth, but some business leaders believe the budget and time constraints revolving around business intelligence makes it an unworthy investment. It’s not uncommon for managers to think they’re saving money by skipping on this tool, when in reality, a lack of business intelligence in an organization can actually cost organizations cash in the long run.
How, you ask?
Let’s explore a few ways your own business might be costing itself money if you haven’t implemented BI into your processes.
1. Your Competition
In today’s ever-connected business environment, companies are always looking for ways to maintain their competitive advantages. Have you ever stopped to think about how some of your biggest competitors are beating you? It’s likely some—if not many—of them have implemented business intelligence into their processes.
BI has come a long way in recent years, allowing companies of all sizes (and in all industries) to take advantage of affordable, easy-to-use solutions that help them gain insights that ultimately help their organizations run smoother and more efficiently.
Not too long ago, global enterprises were the only companies utilizing the power of BI. However, with recent innovations and altered pricing strategies, small and medium-sized businesses are now able to play this data game, too. Overall, companies that choose to utilize analytical solutions are enjoying benefits in nearly every realm of their organizations, including:
- Better and more informed decision-making
- Better pricing structures
- Improved customer service
- Enhanced marketing efforts
- Advanced financial management
If you’re letting your competitors handle their businesses with data while you sit on the sidelines, you’re voluntarily putting yourself at a disadvantage.
2. Over- or Under-Stocking
If you’re in the warehousing industry, you can’t rely on your instincts alone to satisfy market trends and seasonal fluctuations. If you once elide on monthly or quarterly reports to determine the amount of stock required, you likely learned during COVID-19 that this method is completely unreliable and outdated if the market takes a sudden, unexpected shift. This problem ultimately produces an effect of over- or under-stocked warehouses, which means your company is losing money somewhere along the way.
By implementing a BI solution, your company can quickly respond to changes in stock, giving you the ability to replenish to meet customers’ demands with real-time data, rather than trying to anticipate them. Whether it’s a one-time occurrence that’s pushing demand—or even a global pandemic—you’ll be able to keep up with trends and meet demand accordingly.
You might be tempted to purchase a low-end tool (or even use spreadsheets) to manage the day-to-day tasks and information of your business. As the world becomes more digital and measurable, the number of systems you’ll likely use in the coming years will only increase, which means the amount of data you’ll need to process will grow, too.
If you purchased a bargain-bin solution, you’ll soon find that you’ve outgrown a system that you’ve entrenched into your organization. Then what do you do? You’ve purchased licenses, spent hours on training, and asked for employee buy-in on a product that doesn’t do everything you need it to do.
To avoid this conundrum, do your research as soon as possible, getting a powerful BI system built into your own processes from the beginning. If you’re already in this situation, reach out to our Power BI experts at MIBAR to learn how we can transition you to a cloud-based business intelligence and analytics tool that’ll deliver the insights you need to grow.
4. Goal Setting
You’ll never find the right product if you don’t actually understand what your company is trying to achieve. Before you can truly understand how the lack of a BI system is costing you money, make sure you have a clear idea of your goals and the capabilities required to solve those issues or fulfill the objectives. From there, you can select a BI tool that adheres to those requirements so you won’t spend money on something that doesn’t do what you need it to.
5. The Leaky Bucket
In the leaky bucket scenario, your company is represented by the bucket and your customers are the water within the container. Using this analogy, it won’t help to add more water (bring in more sales) if your other customers are leaking out of the bucket at a high rate.
ERP systems are built to give you valuable insight on sales revenue and new customers, but they aren’t designed to tell you detailed information about which customers you’re losing. BI, on the other hand, offers real-time data so you can see customer loss when it’s occurring. Armed with this data, your sales manager can dispatch a sales rep to determine the cause of the leak and offer solutions to retain your remaining customers. Plus, when you understand existing customers’ needs, you’ll be able to improve their satisfaction and be more attractive to future customers, too.
On the other side of the sales funnel, BI can assist you with designing cost-effective targeted marketing campaigns to minimize leaks while acquiring new customers. You’ll be able to analyze customer buying trends so you can pivot pricing strategies or improve product mixes to match changing preferences whenever you need to.
6. Underperforming Employees
Before BI, it was hard to accurately assess employee performance. Managers often relied on quarterly reports, customer feedback, and annual appraisals, which don’t always point to the exact areas of underperformance or exceptional work ethic.
BI provides a visual representation of data in the form of dashboards that give you a very quick overview of not only business performance, but also of individual employee performance. With a few clicks of a mouse, you can monitor performance and identify areas that need to be improved.
7. Manual Reporting
Take a moment to consider all the time your organization is spending generating reports, rather than attending to other mission-critical tasks. Besides being labor-intensive and time-consuming, manual reporting can lead to a lot of manual data entry errors, which can be quite costly in the long run. Not only that, but manual reporting is often done through a series of disparate systems that don’t talk to each other, leading to an organization filled with competing and incomplete sources of truth.
Let MIBAR help you unlock the potential hidden in your business data
If you’re concerned that a lack of a BI infrastructure is costing your organization money, we’d love to talk to you. Contact us for a free consultation to find out how we help companies in your industry get the business insights they need to make actionable, timely decisions with Power BI and other cloud-based business software.
Check out this Power BI case study for an inside look at how we released the power of real-time data for a consumer packaged goods company.