Business Intelligence, Key Performance Indicators (KPI) and Performance Measurement Systems
Business Intelligence (BI) is a business management term which refers to applications and technologies which are used to gather, provide access to, and analyze data and information about their company operations. Business Intelligence systems can help companies have a more comprehensive knowledge of the factors affecting their business, such as metrics on sales, production, internal operations, and they can help companies to make better Business Decisions.
Rationale for using BI
Business Intelligence applications and technologies can enable organizations to make more informed business decisions, and they may give a company a competitive advantage. For example, a company could use business intelligence applications or technologies to extrapolate information from indicators in the external environment and forecast the future trends in their sector. Business intelligence is used to improve the timeliness and quality of information and enable managers to better understand the position of their firm in comparison to its competitors.
Business intelligence applications and technologies can help companies analyze the following: changing trends in market share, changes in customer behavior and spending patterns, customers’ preferences, company capabilities and market conditions. Business intelligence can be used to help analysts and managers determine which adjustments are most likely to affect trends.
BI systems can help companies develop consistent and “data-based” business decisions, producing better results than basing decisions on “guesswork”. In addition, business intelligence applications can enhance communication among departments, coordinate activities, and enable companies to respond more quickly to changes (e.g. in financial conditions, customer preferences, supply chain operations, etc.). When a BI system is well-designed and properly integrated into a company’s processes and decision-making process, it may be able to improve a company’s performance. Having access to timely and accurate information is an important resource for a company, which can expedite decision-making and improve customers’ experience.
In the competitive customer-service sector, companies need to have accurate, up-to-date information on customer preferences, so that the company can quickly adapt to their changing demands. Business Intelligence enables companies to gather information on the trends in the marketplace and come up with innovative products or services in anticipation of customer’s changing demands. Business Intelligence applications can also help managers to be better informed about actions that a company’s competitors are taking. As well, BI can help companies share selected strategic information with Business Partners. For example, some businesses use BI systems to share information with their suppliers (e.g. inventory levels, performance metrics, and other supply chain data).
BI systems can also be designed to provide managers with information on the state of economic trends or marketplace factors, or to provide managers with in depth knowledge about the internal operations of a business.
For the BI technology system to work effectively, companies address the need to have a secure computer system which can specify different levels of user access to the “data warehouse”, depending on whether the user is a junior staffer, manager, or executive. As well, a BI system needs to have sufficient data capacity, a plan for how long data will be stored (data retention). Analysts also need to set benchmark and performance targets for the system.
Business Intelligence analysts have developed software tools to gather and analyze large quantities of unstructured data, such as production metrics, sales statistics, attendance reports, and customer attrition figures. Each BI vendor typically develops Business Intelligence systems differently, to suit the demands of different sectors (e.g. retail companies, financial services companies, etc.).
Business Intelligence software and applications includes a range of tools. Some BI applications are used to analyze performance, projects, or internal operations, such as AQL – Associative Query Logic; Scorecarding; Business Activity Monitoring; Business Performance Management and Performance Measurement; Business Planning; Business Process Re-engineering; Competitive Analysis; User/End-user Query and Reporting; Enterprise Management Systems; Executive Information Systems (EIS); Supply Chain Management / Demand Chain Management; and Finance and Budgeting tools.
Other BI applications are used to store and analyze data, such as Data Mining (DM), Data Farming, and Data Warehouses; Decision Support Systems (DSS) and Forecasting; Document Warehouses and Document Management; Knowledge Management; Mapping, Information Visualization, and Dashboarding; Management Information Systems (MIS); Geographic Information Systems (GIS); Trend Analysis; Software as a service (SaaS), Business Intelligence offerings (On Demand) – similar to traditional BI solutions but software is hosted for customers by a provider; Online Analytical Processing (OLAP) and Multidimensional Analysis; sometimes called “Analytics” (based on the “hypercube” or “cube”); Real-time Business Intelligence; Statistics and Technical Data Analysis; Web Mining, Text Mining and Systems Intelligence.
Other BI applications are used to analyze or manage the “human” side of businesses such as Customer Relationship Management (CRM), Marketing Tools, Human Resources applications and Web Personalization.
Thejes Consultants have the following Business Intelligence systems development and implementation experience:
- $1.5 Million project using a phased approach to developing and implementing a corporate Performance Measurement and Reporting System (PMRS) at AT&T Canada. Led a complex sub-project to create an innovative costing model working with a leading edge specialist, to assign network assets and operating costs to AT&T Canada products.
- Implemented Activity Based Costing at AT&T Canada, and provided detailed activity costs and value analysis to support Business Process Transformation efforts.
- Developed a Performance Measurement Reporting (PMR) system supporting Sales and Service Manager Compensation for 175 Retail Banking Branches nation wide at National Trust.