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1. What is Business Intelligence (BI)?
Business intelligence (BI) is a broad category
of application programs and technologies for gathering, storing,
analyzing, and providing access to data to help enterprise users make
better business decisions. BI applications include the activities of
decision support, query and reporting, online analytical processing (OLAP),
statistical analysis, forecasting, and data mining.
2. Do I need Business Intelligence in my organization?
All successful businesses have many
things in common. One of the commonalities is to make well informed
business decisions to gain competitive advantage. And well informed
business decisions are all about understanding the company's internal
and external environment.
The ultimate objective of business intelligence
is to improve the timeliness and quality of information. Timely and
good quality information is like having a crystal ball that can give
you an indication of what's the best course to take. Business intelligence
reveals to you:
- The position of your firm as in comparison to its competitors
- Changes in customer behaviour and spending patterns
- The capabilities of your firm
- Market conditions, future trends, demographic and economic information
- The social, regulatory, and political environment
- What the other firms in the market are doing
You can then deduce from the information
gathered what adjustments need to be made.
Businesses realize that in this very
competitive, fast pace, and always changing business environment
the only thing that will help them gain a competitive advantage over
their competitors is how quickly they respond and adapt to change.
Business intelligence enables them to use information gathered to
proactively respond to changes.
3. How can Business Intelligence benefit my organization?
Some of the more immediate benefits organizations
can look forward to from implementing BI are:
- way to access data in a common format from
multiple sources
- A way to measure business goals by analysing cross-departmental data
- Insight into customer behaviour and trends
- Track customer behaviour to improve service and relationships
- Track specific product sales across regions and distributors
to improve production and supply
- Track internal business trends to improve processes
- Track external market trends to improve competitiveness
- Fine tune pricing and marketing policies
4. What is Business Performance Management (BPM)?
Business performance management (BPM) is
a methodology designed to optimize the execution of business strategy
that consists of a set of integrated, closed-loop, analytic processes,
supported by technology that addresses financial as well as operational
data.
BPM enables a business to define, measure and
manage its performance against strategic goals. The core financial and
operational processes of BPM include planning, consolidation and
reporting, analysis and the deployment of linked key performance
indicators (KPI's) throughout an organization. BPM initiatives help
organizations realize the following improvements:
Alignment and Accountability
Timely, reliable and consistent information
enables managers and key decision makers to be held accountable for
their unit's performance and increases their ability to quickly respond
in order to take advantage of competitive opportunities as well as
identifying and mitigating potential risks.
Improved Business Insights
Business managers and analysts have a more
complete understanding of actual business performance on a timely basis,
as well as access to quick and accurate representations of future
trend analysis.
Business Agility
Business management strategy can be
adjusted as quickly as necessary to maintain competitiveness.
This can be established through streamlined communication and by
developing a common understanding of each functional area's role,
contribution and impact to other interrelated parts of an organization.
Achieving this will result in a more precise execution of business plans
because strong linkages between high-level corporate objectives and
lower-level tactical activities are established with effective
business performance management.
5. How can BPM enhance
my organization's performance in today's competitive business environment?
The key values in BPM practices are in
its capability to consolidate enterprise-wide data and its availability for
business users to analyze and make informed decisions. This "single version"
of data enhances consistency and accessibility has yielded positive results to
many BPM practice adopters. It has:
- Significantly increased productivity & efficiency of operational staffs
- Improved accuracy of forecasts
- Equipped decision-makers with more accurate and timelier information
- Contributed to gains in shareholder value
Businesses today has adapted well to
BPM practices because of the increasing needs to respond to
challenging economic market environments. These environments
demand improve planning, better operational process monitoring,
enhanced ability to analyze and anticipate changes and opportunities
and last but not least, more effective operational execution.
If your organization has plans to improve
its business strategy in view of increasing profitability, growth,
competitiveness, quality and customer satisfaction, Business Performance
Management should ideally be on top of your considerations.
6. What is the Balanced Scorecard?
The Balanced Scorecard is a new approach
to strategic business management which was developed by Drs.
Robert Kaplan (Harvard Business School) and David Norton.
In their years of studies of management approaches, they have
noted that there were some weaknesses and vagueness of traditional
management practices which were primarily focused on the financial
perspective of traditional organizations. The balanced scorecard
approach, on the other hand, aims to provide a clear prescription
as to what organizations should measure in order to "balance" the
financial measurements.
The Balanced Scorecard is a
management system that enables organizations to clarify t
heir vision and strategy and translate them into action.
It provides feedback around both the internal business
processes and external outcomes in order to continuously
improve strategic performance and results. Kaplan and Norton
described the innovation of the Balanced Scorecard as:
The balanced scorecard suggests
that we view the organization from Four Perspectives,
and to develop metrics, collect data and analyze it relative to
each of these perspectives:
- The Learning and Growth Perspective
- The Business Process Perspective
- The Customer Perspective
- The Financial Perspective
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