Business Intelligence Blog from arcplan

What Your Data Wants To Tell You


Your data has a ton of stories to tell you – and maybe even a few warnings – if only you would listen. Data talks and today I’m exploring its wishlist:

“Make Me Impossible To Ignore!”
Have you ever been distracted during a phone conversation and missed what the person on the other end said to you? No one likes to be ignored and neither does your data. Sometimes it’s practically screaming at your inventory managers, “Don’t send anymore widgets to Mississippi – they aren’t selling,” or yelling at your marketers, “Stop buying leads from Company X – they’re not converting into revenue!” The problem is that data is easy to ignore, especially if your company culture allows it. Since arcplan is a BI company, we’re ruled by metrics from the top down. Our marketing department keeps track of lead flow on a daily basis with dashboards, so we have constant visibility into what lead sources are best converting to opportunities and which opportunities best convert to closed deals. Sure, it’s easy to just stop looking at the dashboard but then I wouldn’t have a job anymore. Our company demands that we pay attention to our data. Dashboards work for us, since they can be delivered via email on a regular schedule so if we’re on the road, we don’t need to login to any system to view our performance data – we just check our email. Would your company benefit from in-your-face BI dashboards? Maybe then people would stop ignoring what the data has to say and they’d be able to make better decisions that contribute to improved company performance.

“Hurry Up, Please!”
Do you wait days or weeks for IT to deliver the data you need to perform analyses? If so, you’re not alone. Many of our clients come to us when they tire of this wait time and are starting to see the competition pull ahead as they’re able to make more agile business decisions. Our client Japs-Olson, a commercial printer in Minnesota, was waiting a week or more for reports from IT when they decided to implement an arcplan BI solution. Now it takes their CFO – who you’d classify as a regular business user, not a report or dashboard designer – minutes to create a new report. That kind of quick turn-around is what separates top performers from the rest of the pack…

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Resolutions to Optimize BI in 2012


2011 is rapidly winding down, and we’re talking to a lot of customers who are currently planning their BI initiatives for 2012. The New Year brings resolutions, personal and professional, so we’ve taken stock of what we’re hearing and put together this list of our recommendations for resolutions your company should consider to optimize your BI in 2012. Are we right? What others are on your schedule for next year?

Resolution 1: Information Access for Everyone
BI for the masses – it’s a thought some think is far off in the distance, but actually, many of our customers are making the move in 2012. Since decisions are being made by everyone from CEOs to line-level employees, companies need to consider opening information access up beyond a small group of power-users. Employees who can’t write reports can still analyze them and make use of the data to make better decisions. Take stock of your existing BI systems in 2012 and determine if removing restrictions would benefit your company’s performance.

Resolution 2: Collaboration Tools – the Key to Success
How do employees determine what BI reports are useful and what reports are garbage? How do they make enhancement requests for reports and dashboards, provide feedback to report authors, or share & annotate reports? Collaborative BI solutions not only offer an easy entry-point into BI for the casual user/knowledge worker (since they make it easy for users to search for relevant information), but they also keep statistics about the most- and least-used reports. Solutions like our own arcplan Engage allow users to rate and comment on reports, so their feedback becomes an essential part of the BI process. Collaboration, when it comes to BI, is about adding value to existing information and using it to your company’s advantage.

Resolution 3: Form Follows Function

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Clues That Your BI Dashboard Has Gone Bad


You don’t have to look at the expiration on your milk carton to know that it has soured – it usually gives you some pretty strong clues, like smell, discoloration, or a strange consistency. In the same way, you probably have an idea that your BI dashboard has gone bad – clutter and unreadable graphs are sure signs that it’s time for a refresh. Other clues are less obvious, like maybe your role has changed but your dashboard hasn’t changed along with it. Let’s dive into these clues and see if you can relate to any of them:

1. Your dashboard is too busy. The biggest limitation of dashboards is the physical size of your screen. When your dashboard was created, did it take this into account? Are all of your metrics on one screen, which forces you to do a whole lot of scrolling? A dashboard should not require the user to scroll left, right, up or down to see the entire screen. Try a creative way of accessing additional information, like implementing tabs or hierarchies to drill down into more detailed information.

2. Flashing lights and pretty pictures. Does your dashboard look like a fireworks display on the 4th of July? Certainly your dashboard needs to be attractive, but you can display a whole lot of nothing through the inappropriate use of graphs and graphics. Dashboards should be analytical tools, not just pretty pictures. They need to provide business value, which can be achieved through simple charts (read: not 3D) and appropriate animation, keeping the flash to a minimum. Here’s a tip: if you’re using stoplight indicators, think about making stoplight symbols a standard in your organization. That way, employees who are colorblind can still get value from your indicators.

3. Lack of a role-based view.

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Look Ahead with Leading Indicators


Just as you can’t drive to work with your eyes only on the rearview mirror, you can’t drive your business forward by focusing on the past. Yet that’s what you’re doing if you’re relying solely on lagging indicators such as revenue, profit, or Cost of Goods Sold (CoGS) to manage your organization’s performance. These factors are important, but once they’re calculated, it’s too late to impact them. What you need are good leading indicators that allow you to spot trends and see issues before they balloon into real problems.

Leading vs. Lagging Indicators
Leading indicators are early predictors of sales and profit, and in combination with lagging indicators, they give you a holistic view of your company’s performance. Lagging indicators such as revenue, sales, expenses, and inventory turnover help you understand whether or not certain objectives have been met. They can depict trends when periods are compared, but by then, you’re too late to profit from the early discovery of the trend. Lagging indicators are calculated at the end of a period (month, quarter, etc.), so you won’t know whether or not a goal has been met until nearly the end of the period. Even if you run some ad-hoc reports throughout the period, you likely can’t get to the root of a problem in time to impact the outcome. Chances are, things were going wrong long before the lagging indicator on your dashboard turned yellow.

On the other hand, leading indicators pinpoint the source of future problems and help you predict whether or not the target values for your lagging indicators will be met. Leading indicators enable your company to avoid problems and operate more cost-effectively. For example, rather than tracking product returns (a lagging indicator), reporting a 90-day customer complaint trend allows you to fix problems earlier and less expensively. Drilling down into the complaints themselves, you might discover that a particular product has a defect that your quality assurance team didn’t catch. Removing the product from your shelves may save you a lot of trouble in the long-run, reducing complaints (and the negative feelings your customers may be starting to harbor toward you) as well as the cost of returns (returns aren’t free – they cost retailers nearly $14 billion a year).

Tracking receivables turnover (a leading indicator) enables the company to better manage its cash (a lagging indicator).

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