Nov 20, 2012
Taking data and turning it into meaningful information
By John Cho, Partner, KPMG Enterprise
A number of Canadian businesses have been impacted by these current, uncertain economic times. As a result, for many companies, weaknesses in management reporting procedures, supporting technology and fundamental data have been revealed. Several finance professionals have been left scrambling to cope with the demands for continual and dependable information. To run a company effectively and compete in the marketplace, timely, reliable and relevant business intelligence information is a must.
Business Intelligence (BI) is a phrase that can mean many things to many different people. Essentially, it is a compilation of intelligent information that assists business owners and leaders to make better business decisions that ultimately boosts the overall value of the company. BI can help identify key business drivers and answer important questions such as:
- Who are my most lucrative, money-making customers?
- Which services and/or products are earning a profit and which are losing money?
- Which procedures are effective and producing desirable results?
- Which markets are earning a profit and which are losing money?
It is the information extrapolated from these types of questions that will help the organization gain meaningful insights on the cost drivers of the business - where there are opportunities and where to invest resources and money that can have the largest effect on profitability while effectively managing risk.
The main question for virtually all BI projects is where exactly to begin. Reviewing finance and management reporting procedures typically makes for a good starting point, but many Canadian private companies have made hardly any changes to enhance or better their reporting and the tools needed to get the necessary information required by the company. A number of businesses grapple with improving the timeliness and quality of support for decisions. Information is only valuable and helpful if it helps a business owner make better business decisions. By mapping your BI information requirements with your business plan, you can eventually build a foundation for greater performance measurement, competitive intelligence and efficient decision making.
A large number of private companies still leverage spreadsheets to maintain performance management and reporting. The finance team cannot and should not spend the majority of its day downloading and manipulating data in an effort to deliver meaningful information to the business. Instead - prior to bankrolling new BI technology - it is essential to understand the quantity of data, the numerous data sources and how much effort and energy is associated with generating the information required by the organization. To have a well-organized and efficient BI solution, Finance should first invest to align facts and figures with fundamental and strategic business metrics and focus on making certain that the data is accessible and dependable.
Finance should lead the way in creating a BI program for the organization. It should serve as a call to action to:
- Ensure your organization has the information it needs to prepare for the future
- Recognize crucial performance metrics that drive the business and support the overall business plan and organizational goals
- Have professionals on your team with the skill set required to evaluate, understand and adapt the data into comprehensible actions for the company
- Steer clear of the spreadsheets that result in a massive amount of statistical manipulation
- Establish the tools and procedures that drive more adaptability into reporting and facilitate efficient decision making.
Organizations willing to adopt BI are better able to provide the right information, to the right people at the right time. Throughout the journey, they will realize how meaningful, focused information can give their organization a genuine competitive advantage.
John Cho is a Partner with KPMG Enterprise™. He can be reached at 416 777 3994 or email@example.com
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG LLP. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
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