In my last post, we took a look at what BI is and isn’t and how it can really be used to make real-world business decisions. I promised you an example to help illustrate my point, so here we go.
Let’s take a buyer of raw materials in a production facility. If that buyer is asked what type of report they would find useful, the answer may be a report that shows all purchase orders that have not been fulfilled and delivered and are overdue by 10 days or more. That could be a very useful report, right?
Problem is, the report itself does not answer a key business issue, but does provide insight into issues that require further analysis. It’s a standalone datapoint. Let’s assume that we now want to provide that same buyer a dashboard that answers a key business question and supports a positive financial influence on the organization.
When asked what we (MiPro) would do, it’s simple: we would execute a proper requirements-gathering effort based upon understanding an individual’s main work responsibilities. Through this effort, we would come to better understand what information would provide value in a dashboard. Asking that same buyer what they would do next with that information regarding 10 day overdue deliveries, the scenario may unfold such as this:
- The buyer takes every purchase order from the report and looks up (queries) what materials are on each purchase order (which would be another valuable report for that buyer).
- Then, based upon the materials that are on each purchase order, the buyer reviews the production schedule and determines if any production will be impacted (another valuable report).
- If a production line is negatively impacted, then the buyer works jointly with the production scheduler to determine whether materials need to be expedited or the production schedule can be changed.
- The buyer then works with the suppliers to communicate whether the materials require expediting.
As you can begin to see, in this scenario the true requirement would be a dashboard that identifies what production lines will be shut down due to overdue purchase orders not being fulfilled. That’s real business value. That’s way more than graphs and nice colors. From our original user and problem, we find tremendous downstream effects leading to real business disruption.
With an intelligent BI implementation, our buyer could drill back into the details to take actionable measures. The dashboard could offer true business value, answer key business questions and present significant risk mitigation to operational business and (ultimately) financial metrics.
In all of this, the buyer’s daily work process is used to define the dashboard that provides him/her with the most value. The buyer may have been able to get to the answer without this process or dashboard, but it would have been through a time-consuming series of individual reports as opposed to logging in, identifying the issue at a glance and drilling back to the details.
There’s working hard and working smart, right?
So, how does this tie back to the original statement of using BI to improve the bottom line? Certainly shutting down a production line is a Bad Thing, but being surprised by not being able to fulfill orders is an Even Badder Thing that still leads to a shutdown. BI can help in preventing this from happening by making the buyer’s workflow more effective and mitigating risk, both of which contribute to financial success.
In my next post we will talk about making HR strategic and turning non revenue-generating business units into contributors to the top and bottom lines and provide another example of how to do this. Stay tuned.