Get Smart About Business Intelligence
Small manufacturing and wholesale businesses can increase efficiency — and potentially profits — by implementing software that enables real-time, company-wide communication and instant access to information. Is business intelligence a smart choice for your business?
Business analysis is the set of tasks and techniques required to identify needs and determine solutions. For small manufacturers and wholesalers, “business analysis” often means asking the resident Excel expert to slog through spreadsheet after spreadsheet to come up with a report based on last quarter’s data. You may get a fairly accurate picture of your business at the end of the process. Or, you may not.
But what if your business had access to the rich detail and instant access of business intelligence (BI) software, the high-tech tool that larger companies use?
In today’s fast-paced, competitive market, small manufacturers and wholesalers can no longer strictly rely on low prices, high quality and on-time delivery to stay ahead of their competitors. What were once considered advantages are now requirements to stay open for business. Both manufacturers and wholesalers today face more competition, increasing globalization and customers with greater expectations. Because of this, it’s become imperative that all the links in the supply chain be managed successfully.
What can BI do for you?
Now that the prices on BI software have dropped and their developers are targeting businesses just like yours, it’s entirely possible to efficiently track and move your inventory, generate and monitor products, negotiate with suppliers and maintain quality standards.
With BI software, executives can see live updates to key performance indicators on their desktops; warehouse and factory managers can pull reports — such as customer lists, factory processes, and sales and revenue reports — and make adjustments based on real-time order data; sales representatives in the field can instantly access client information even if they’re sitting in the client’s office.
The result is that businesses function more efficiently — especially those in the wholesale and manufacturing industries because these typically require tracking multiple units or locations.
Leveling the playing field
“BI can make a small or medium business work on par with a larger competitor,” says Matthew Mikell, global product marketing manager with SAS, a BI and analytics software and services supplier that offers small business products starting around $16,000. Other manufacturers, such as SAP-owned Business Objects, Microsoft and IBM, have solutions tailored for smaller companies.
In fact, 9% of small businesses in the United States already use BI as a tool to help them better understand market drivers for sales and forecasting and for increasing their profit margins, according to a recent study by small business consultants AMI Partners. The firm’s 2007 U.S. Small Business Overview and Comprehensive Market Opportunity Assessment study concluded that BI helps companies make sense of large amounts of data to drive sales and better position marketing and messaging. Although BI manufacturers are used to competing with one another for business from larger clients, with small businesses they know they’re up against the in-house database expert. BI may be more expensive, but the investment can help to improve your bottom line.
According to SAS, BI software aims to help companies turn data into knowledge, enabling them to develop unique demand, supply, operational and customer insights. As a result, you can improve the efficiency and effectiveness of their supply chain, their process and after-sales customer service.
Why it works
The principle is that better information leads to better decision-making. Specifically, the up-to-date and easy-to-analyze information provided by a BI system might help you better manage inventory and production, recognize a sales pattern that will help you know when to approach a particular customer for a reorder or predict which of your products might emerge as top sellers. Or, for example, you could monitor the level of service calls you get from clients, on the assumption that fewer service calls means your products aren’t being used frequently — prompting a call from your sales rep.
For example, a wholesaler could feed government-provided economic indicators into a BI system then compare them to order data. If a surge in retail orders corresponds to a larger economic trend, the wholesaler could model their orders according to the trend’s movement.
The speed of technology
BI also allows information to circulate much more quickly. The software can be loaded onto portable devices like an iPhone or BlackBerry, so when a member of your sales staff records an order, the details are instantly reflected throughout your system, from inventory levels to executive-level revenue projections to an updated analysis showing the products that a particular sales rep tends to sell, or the quantities a client tends to order.
“BI allows you to dig deeper into your data to find that nugget that can really affect your business. With Excel, there’s just not that level of granularity and sophistication,” Mikell says. “BI lets you quickly distribute that information throughout the company.”
BI software has given larger manufacturers and wholesalers an advantage over smaller competitors by making them more efficient and adaptable. And as the prices have fallen, smaller businesses like yours are poised to make the same gains.
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