Five key elements of a modern business analytics strategy can help businesses position themselves for growth in the new economy and continue to work and be smarter, especially in managing costs, improving profit, identifying new opportunities, driving cash flow and managing risk for more effective decision-making.
1. Scorecards/dashboards.
By using scorecards and dashboards, executives are able to monitor data efficiently, better understand performance gaps and quickly drive opportunities with more strategic decision-making.
Understanding how business is performing against predetermined targets is crucial. As companies become increasingly agile, executives simply do not have the time to sift through stacks of reports to discover how their business is performing. Business leaders can look to measurement tools, such as scorecards and dashboards, to monitor data and help manage strategy and performance goals.
There are different scorecard types that provide distinct characteristics to help decision-makers, including those focused on strategy management, business process performance management and basic performance monitoring. Regardless of structure, their impact on decision-making is even more significant.
Scorecards let executives link individual and team performance to organizational strategies. This helps employees understand at a glance how their individual roles drive company-wide performance. With digital scorecards that are tied to key financial and operational data, business leaders don’t have to sift through spreadsheets or paper-based reports. They are effectively able to monitor and manage their strategies as well as make smarter decisions to execute company objectives.
2. Reporting and analysis.
Reporting and analysis abilities allow decision-makers to assess and communicate how their company is performing in the industry and take immediate action accordingly.
Reporting and analysis helps executives see how they are operating in different regions or across product categories, as well as better understand the state of their market sector and industry competition.
With business analytics, Web-based reporting sits on top of core transaction systems so decision-makers can take immediate action on recent financial or operational information. Reporting and analysis creates a common context for decision-making across departments and staff levels and helps companies make data more actionable.
3. Financial performance management.
Deep insight into financial and operational data helps companies streamline business operations in order to increase profitability and sustainability.
Business analytics software for financial performance management helps executives streamline the complex process of tough decision-making by enabling users to evaluate financial results across countries, currencies, general ledger systems and legal entities. This deep insight helps finance make smarter decisions about which assets, resources, initiatives, locations, products or customer relationships may no longer be sustainable.
Armed with detailed financial analytics, business leaders can quickly evaluate how results change over time, in different regions and across various product categories. The ability to identify key financial and operational trends is always vital. By drilling down to transactional-level detail, trends can be spotted more easily so decision-makers can better understand resource requirements and plan accordingly.
4. Continue the planning cycle.
Replacing rigid planning cycles with business analytics software enables businesses to build intelligent plans for future development and growth.
Business analytics software for enterprise planning can help companies replace and revamp rigid annual budgeting and planning processes that tend to make minimal impact on business growth. This type of business analytics technology fosters continuous planning on a monthly, weekly or daily basis, positioning companies to achieve higher performance in both strong and weak economies.
With real-time visibility into up-to-date data, executives can create rolling forecasts that consider a broad range of potential future scenarios. This type of what-if analysis enables business leaders to develop intelligent action plans for variable future outcomes, thus boosting the agility and responsiveness of the company.
5. Continuous monitoring of performance targets.
Monitoring performance targets on an ongoing basis lays the foundation for future growth, providing organizations with a realistic performance outlook based on actual business and industry developments.
Companies should not seek shelter from the stormy clouds brought on by the recession, but rather take careful, intelligent steps to better manage costs, improve efficiencies, reallocate resources and streamline supply chains so that the foundation for future growth is established. Instead of setting targets at specific numbers, company decision-makers need to link performance targets to events, trends and risk factors.
This allows for more realistic performance targets based on actual business and industry developments and provides more flexibility to adapt to changing market conditions. The strategy will require a commitment to rid the company of inefficient processes in favor of intelligent systems capable of driving continuous performance.
For the past four years, BI software, a key component of the business analytics market, has ranked as the number one priority of executive managers surveyed by Gartner. Why? Because choosing the right strategy, executing against it, and ensuring you’re on the right path demands the access to the information and insight that modern business analytics delivers.
This is especially true during uncertain economic times, businesses of all sizes need to analyze operations and performance in an effort to identify the best ways to improve business processes, reduce or optimise enterprise costs and improve overall enterprise workforce effectiveness.
Smart companies need a modern, intelligent business analytics strategy that gives them the ability to understand past performance, get an immediate pulse on what is happening now, and both plan and model the future to gain more predictability and control.
This type of strategy is driven by the business in collaboration with the IT department and combines the elements of scorecards/dashboards, reporting and analysis, financial performance management, continuous planning and performance targets.
Together, this modern business analytics strategy fosters better control over information and visibility into how the new intelligence gained will impact the business value chain. Moreover, an inclusive business analytics strategy is pervasive across lines of business and employee roles, helps organizations find opportunity amidst economic turmoil, accurately measures efficiencies, streamlines the decision-making process, revolutionizes planning, budgeting and forecasting and lays a solid foundation for sustainable 21st century growth.
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