Business Analytics to drive Business Performance
Recession and Credit Crunch have separated the companies that are better prepared, and those who are not so prepared. Organisations are beginning to take the BI usage to higher levels. Well, some are adopting BI fast, if they haven't done so far.
Traditionally, BI is used for data management and reporting. This only shows "how they are doing NOW!!!" But it is often difficult to understand why they are doing so much only, unless we start comparing with what have they planned to achieve. Performance Management (PM) comes to the rescue here. PM establishes the various metrics, KPIs, Plans and Budgets through forecasting mechanisms etc., it becomes easy to measure the as-of-now performance. Mature Organisations perform even better by devising plans / ways to improve their performance by a much higher degree. They have started deploying Business Analytics combined with Statistical methods and Interactive Decision making utilities, coupled with business themes.
Let me get to the next level on the above mentioned items in terms of maturity. Industry trends show the adoption maturity in the following direction: data management, efficient storage, reporting, variance analysis & reporting, drill-down analysis, multi-dimensional analysis, customer segmentation & 360 degree information, risk adjusted analysis, predictive analysis etc...
All these show great productivity improvements by different degrees. BI started with productivity improvement by the way of bringing together the data and creating a trust in the data, and then automating it. It satisfied the very basic need of reporting in the organisations. This enabled the organisations to understand how they are doing in the business. This has also removed the data / information silos to a large extent.
Performance Management (PM) brought in a sense of collaboration in organisations' growth plans. Everybody that mattered in the organisation participated in the growth of the organisation. Senior Management has been able to communicate their goals to the lower levels. Lower management has been able to understand these expectations and reciprocate what is feasible in the growth. PM also ensured that the organisation is well geared and act in a collaborative & participative manner to the changes in the business environment. PM also ensured that all the employees are provided different sets of KPIs and Metrics to monitor the organisation's health. However, BI still remains as the basic foundation for the PM to grow and sustain.
Business Analytics (BA) can bring in direction / insights into organisations' growth strategies amidst high competition in the market. They cover the entire gamut of operations starting from customer acquisition to customer retention. They also cover cost optimisation, revenue maximisation etc., by the way of analysing the data that is already gathered and housed through BI. BA can span in areas like: customer segmentation, churn reduction, pricing analysis, cost optimisation, revenue maximisation, channel optimisation etc., etc.,. However, we need BI and PM platforms to be strong enough for the BA to flourish.
Please watch out for more on Business Analytics and Performance Management in the coming days...
