Enterprise Resource Planning (ERP) solutions like Acumatica offer a wide range of Business Intelligence (BI) features. BI is a collection of technologies and practices that enable sophisticated analysis of business data. Used right, BI can help managers make informed decisions about their companies.
Understanding BI and Its Relationship with Making Informed Decisions
What does it mean to make an informed business decision? Opinions will vary on this question, of course, but in general an informed decision is one that is made using an abundance of facts. It’s a decision based on relevant, timely information—complete with context. The opposite of an informed decision is “going with your gut” or “shooting from the hip.”
It is possible to make an informed decision without BI. The problem is usually one of timing. With enough people and manual data gathering tools, a manager can assemble the facts he or she needs to make a decision. The difficulty with this approach in today’s business environment is that circumstances may change in the time it takes to get all the data together. Additionally, manual data analysis deprives the manager of the ability to quickly run different decision scenarios.
Example: Deciding When and Where to Liquidate Inventory
Figuring out what to do with excess inventory offers a great example of informed decision making with ERP. With BI, a business manager can create a dynamic dashboard that displays the company’s top products in inventory, sorted by cost and location. If the manager needs cash, this graphic data display shows which location is holding the most inventory. The manager can see which products are in the warehouses.
Using simultaneously-generated reports on seasonal sales predictions, the manager can make an informed decision about which products to sell to raise cash. BI’s accurate presentation of live data gives the manager the ability to avoid selling inventory that would be more profitable to keep on hand.
Example: To Borrow or Not?
Borrowing money is a big decision for most business managers. Taking on debt affects both the balance sheet and the income statement. In the worst case, debt can get a business in trouble. BI gives the manager a maximal amount of data to make an informed decision about borrowing.
For example, a BI tool can provide the manager with a 360-degree view of the business. Relevant operational and financial data appear in dynamic graphs. These might include Accounts Receivables (AR) aging, profit trends, sales pipeline, existing debt load, inventories and existing orders in progress. With all of this information available for assessment, the manager can forecast the impact of debt on the business. He or she can decide how much to borrow, and on what terms.
Example: Evaluating Sales Managers
One of the worst areas of business for “going with your gut” is in the evaluation of employees. With sales managers in particular, data is essential for making an informed decision about their performance. A sales management dashboard gives the manager an accurate, contextual information set for the employee evaluation. It might contain data about sales wins and losses, deal size trend and profitability. This way, the manager can see the “quality” of a sales quarter, i.e. if sales growth is matched by profitability.
Innovative Cloud Solutions has expertise with multiple BI solutions across any platform. We will provide advice and consulting to get the right fit for your BI needs. Contact us today to learn about all the Business Intelligence options available for your unique needs.