The needs of a complex organisation with multiple business units, divisions and locations differ significantly from those of a small or medium enterprise (SME). A dynamic and expanding business has more complicated and nuanced business rules and reporting requirements.
But most businesses start small, or single-faceted, and grow. Sometimes that growth comes rapidly. And what may have worked at a small scale no longer meets the requirements for a rapidly growing enterprise.
In this article, we identify the three key stages in the evolution of business intelligence within a growing corporation:
Stage 1: Microsoft Excel
A business in its infancy can happily exist on Excel. Spreadsheets have a high degree of flexibility and familiarity. Excel gives employees the ability to perform multiple tasks in an environment they’re comfortable with. Accountants, particularly, tend to love Excel.
But eventually those Excel spreadsheets become more complex as the business grows. One division needs something slightly different to others. And sheets become more cumbersome as more data sources are thrown into the mix, until the files get so big they become unmanageable.
Stage 2: Rule-based BI
At this point, many organisations will start bringing in specific rule-based business intelligence systems for the parts of the business that have become too complex for a standard spreadsheet. The key performance indicators (KPIs) that best reflect how the business is tracking have become clearer, and rules begin to evolve around them.
However, as the company grows (organically or inorganically), the rule-based system stops being the best way to report on the information you need. Rules by their very definition tend to be rigid and unyielding. What works in one region, or division, or acquisition, may not work in another.
Rules provide preconceived notions of how data should be related, rather than catering to how it is actually related. Revisiting and rewriting the business rules to accommodate changes in the business becomes inefficient. The business gets to a point where it can’t sustain a business-rule-driven BI process long term.
Stage 3: Data-driven BI
It should be a fundamental goal of any CFO to move their organisation into data-driven reporting.
The starting point for all reporting is the collection of information from all departments – accounting, finance, payroll, human resources, sales, and others. With data-driven reporting, instead of the relationships between that information being governed by rules, there’s now a master data management solution that provides flexibility, transparency and rigour in how the collected data relates to each other.
There are several reasons a modern business has data-driven business intelligence. Data-driven reporting is:
- Easier to update, validate, monitor and maintain.
- More justifiable to regulators, auditors, board members and shareholders.
- More effective at reflecting the business situation as it is, rather than what an analyst predicted it should or ought to be.
As a result, data-driven decisions and actions are evidence-based decisions and actions. Accordingly, they are more likely to be the right decisions and actions.
So when is the right time to switch to data-driven BI?
A forward-thinking CFO will skip investing time and money into rules-based BI and move straight to data-driven BI.
But if, as with most cases, the business has grown and changed – sweeping its executives and employees along with it – it is likely the organisation slipped into rules-based reporting.
There are a few signs that you are ready to take the step to data-driven BI. Perhaps it is becoming increasingly difficult and time-consuming to decipher the business logic that is being used to generate a report. Or auditors’ and regulators’ questions are becoming harder to answer.
When it comes time to make the switch, at ITeM group we’ve got the experts and products available to make the transition as painless as possible. You’ll quickly see that data-driven reporting puts the power back into the business users’ hands.