Alex Bekker, our Head of Data Analytics Department, depicts ScienceSoft's proprietary BI framework that we formed during 14 years of our business intelligence practice.
Companies don’t need business intelligence (BI) just for the sake of it. A company’s objective is informed decision-making, and a BI solution should enable it. One thing disregarded during BI implementation (like proper business performance monitoring or getting timely info about business operations), and the company may feel frustrated with the deliverables.
To ensure that our customers get the maximum benefit out of their BI implementation projects, we have developed a BI framework that covers all the functions that a BI solution should perform. Below we illustrate the framework’s four main components by the example of YourStyle, an imaginary fashion manufacturer and retailer. For your convenience, we accompany the descriptions with visuals.
The planning component allows identifying trends, creating forecasts, measuring business performance and analyzing plans.
- With trend analysis, BI users are able to identify patterns in historical data and understand the opportunities that a company can catch, as well as challenges that they have to overcome. For example, YourStyle’s executives can track how monthly gross profit has developed during the year.
- Forecasting allows predicting a future trend to set goals. YourStyle set their gross profit targets after their gross data analysis for the last 5 years. As we show YourStyle’s dashboards designed for executives, we can’t see the forecasting, which falls under the responsibility of data analysts.
- Performance analysis encompasses internal and external benchmarking. YourStyle can find top performers internally, say, by analyzing which of their collections brought the highest sales and gross profit. However, the company can get more insights by integrating the data about the typical and high performance in the industry.
- Plan analysis. YourStyle has their plans in a BI solution. They don’t have any mismatch among the plans when they look at them from different perspectives like gross profit by state, by month, and by collection. As both dashboards we examined are tailored to YourStyle’s executives, we see only top-level plans there. However, be assured that these plans can be further broken down to the plans of different departments.
The essence of the plan execution component is to compare the planned performance against the actual one. For instance, YourStyle’s executives can easily spot that the company has reached their net profit target by 66% only.
Besides, YourStyle’s BI solution allows undertaking root cause analysis. You can take a guided tour through a dedicated BI demo to see how YourStyle identifies the reason for lower-than-planned profit performance.
Change analysis allows identifying real or potential consequences of a change. YourStyle doesn’t have this component implemented yet. However, if they had, they could run different scenarios to understand what impact the introduction of a new collection might have had on their business.
The essence of the optimization component is to use the data from a BI solution to optimize internal business processes. YourStyle can employ the insights they get to improve their marketing by reconsidering the advertising mix for launching a new collection and sales by bringing best practices to the states that are underperforming.
Are you exploiting the full potential of your business intelligence?
Now, you have a checklist to answer this question with confidence. If you have planning, plan execution, change analysis, and optimization components covered, well done – you should already benefit from informed decision-making; if not yet – you have a reference BI framework to identify the missing components and prioritize where to start.
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