Financial Crisis makes companies want to know more about their own business.

Financial Crisis makes companies want to know more about their own business.

It’s almost certain that reduced Business and consumer spending arising from the global financials crisis will see companies shift from growth and expansion to a consolidation mode that aims to sustain their current positions in the market. Key to this is adopting strategies that will keep companies competitive; Traditional measures like budget cuts, retrenchments and cutting project works have some short term benefit, but offer little to guarantee companies can weather a much longer downturn. Smart companies, taking a long term view of the crisis are embracing new strategies that stimulate growth and lower costs.

Business has to continue, smart companies are becoming far more aggressive in lowering their operational and capital expenditures, as a result:
* Smart companies are demanding a deeper and more accurate knowledge of their own business.
* High cost projects with long implementation times are not longer justified, smaller, faster, and higher ROI projects are demanded
* Increasing the strength of customer and supplier relationships is required.

To achieve this business will need to focus on Business Intelligence competencies. This includes building knowledge about customers, products, employees, materials, suppliers, etc. Not surprising smart companies are turning to Business Intelligence solutions to gain competitive insights; but, embracing it with a new attitude. Now a rather than a bloated BI project delivering hundreds of reports of marginal value are over. This focus has to be on projects that deliver insight, ones that allow you to fulfil customer’s needs and generate fresh revenue streams through targeted action. This investment in aligning BI to the company strategy also positions the company for the economic recovery that will eventually come.

So how can a good BI system help a company during an economic downturn?

• By generating accurate and up-to-date data, an organisation can tighten control of every aspect of business, thereby saving money and time. This could range from analysing customer demographics to financial budgeting and forecasting. If tailored correctly for a business, these applications make for a stronger competitive edge in a recession.

• In times of financial constraint, BI should be used to highlight and fine-tune any opportunities for fiscal or staffing adjustments. This internal rather than external business focus is a common and necessary reaction to recession.

• A downturn is a good time to get the house in order, including a review of information management. Ironically, many companies have masses of data, but are unaware of how to channel it effectively into useful knowledge. BI technology can greatly assist companies to better manage information as it doesn’t have to be hard to use nor be solely the domain of technically ‘savvy’ people.

• Finally, the right BI applications can help business leverage the knowledge and experience at all levels of the organisation; why limit BI access to the executive set, when key day to day business decisions are made at all levels.

As with any purchase under a restricted budget, investing in BI – whether improving an existing system or implementing one from scratch – should be supported by a robust business case. Making the right supplier choice is therefore essential.

In a recent interview, Glen Rabie, CEO of Business Intelligence vendor Yellowfin, reported that the new breed of BI vendors may be better able to serve the marketplace in difficult economic times: “At the moment, bigger companies such as SAP and IBM’s Cognos dominate the marketplace. However, these traditional suppliers have higher licensing costs and longer implementation times – two features which have a direct impact on your BI project Return on Investment. Vendors who can quickly roll out flexible, value-adding and browser-based solutions are better placed to satisfy customer requirements.”

Rabie pointed out that the ideal BI system is one that gets you more “bang for your buck”. In other words, a wider deployment of software to staff with a low cost of ownership is the ideal. The other benefit of using an innovative supplier is that BI packages can often be matched to a business’ needs. This is in contrast to the often large, complex and at times unwieldy solutions available through the larger BI vendors.

The other point to consider when investing in this technology is that companies are increasingly under the thumb when it comes to providing cutting-edge reporting technology to clients or customers, so choosing the right BI system can be just as important for a business’ external users as it is for staff.

Rabie explains: “The era of spending months and years on reporting projects is well and truly over. Information has to be deployed quickly and easily to clients or customers, often through web-based application such as extranets. The bottom line is that companies that lag behind in delivering services and knowledge to their customer base will struggle to survive in a recession.”

BI innovators are tapping into this market niche and providing simple to use yet comprehensive web-based applications that can be deployed to staff across a company rather than the IT team. For example, applications such as interactive dashboards that can be easily accessed online by thousands of staff are readily available now.

Common sense in a financial crisis understands that to get through you must, spend less than you earn, make money work harder when spending is required and become more flexible with customers and suppliers. Good business intelligence enables these basics and companies that build up their internal knowledge can move forward with confidence.