Building a BI Strategy: Why It Is Important

insightsoftware -
January 12, 2021

insightsoftware is the global provider of enterprise software solutions for the Office of the CFO to connect to & make sense of data in real time, driving financial intelligence across […]

Bi Strategy

One of the chief complaints that we hear over and over again from business executives is that they still struggle to get clear, accurate, and timely information out of their business software systems. They know that they have a lot of data, but the process of extracting, organizing, and analyzing that information always seems much harder than it should be. That is precisely why insightsoftware exists–to make the process simpler, more powerful, and accessible to everyone in the organization.

We recommend that business leaders begin with a clear, actionable strategy for business intelligence (BI). BI has rapidly grown in popularity among small to mid-sized enterprises (SMEs) in recent years, largely because technology has advanced to the point at which powerful analytics have become affordable for virtually any sized organization. In fact, when you consider the tangible business benefits that powerful reporting can provide, an investment in BI tools delivers a very strong ROI.

Unfortunately, BI is still a confusing and fragmented concept to many people. Definitions vary, largely because BI is a multifaceted domain that touches on everything from internal business processes, key performance metrics, and data manipulation to integration among various business information systems and more.

BI is about how your organization engages with data, how you measure and communicate key objectives, and how you draw insights from your data that help you manage your business more successfully. Every organization is different, so there is no “one-size-fits-all” approach. Ultimately, it comes down to understanding where your business is today, where you want it to be in the future, and how you can forge a path to get there. Gaining that level of understanding requires an intentional approach.

Stock Reporting Tools Just Aren’t Good Enough

Most organizations are already using multiple different reporting tools, and they may not even be aware of just how fragmented those systems are. Think about the various software platforms your organization uses. Most companies have an ERP system for managing day-to-day financial and operational functions. Some have a separate CRM system, which may or may not integrate with the ERP. Others run a digital marketing automation platform to develop and nurture leads, deepen engagement with existing customers, and cultivate awareness and goodwill.

Each of those systems comes with its own dedicated reporting functions. Sadly, those tools are often designed to be “just good enough.” They address the fundamental requirement for reporting, but they lack flexibility and sophistication. In many cases, those tools lack the capacity for custom reports. Very often, you cannot even modify existing reports to support the organization’s unique, specific business processes.

In cases in which customization is possible, it usually isn’t easily accomplished. ERP software, in particular, is notorious for the extent to which report development and customization require highly specialized IT skills. That means allocating scarce IT resources to the task or paying expensive outside consultants to do the job. For frontline workers in finance and accounting, it means waiting days or weeks to get the needed information.

Then there is the problem of integration, or the lack thereof. When companies rely on the off-the-shelf reporting tools that come with their various software systems, they end up with a collection of reports that tell them about each of the specific domains managed by those systems.

The ERP reports can only deliver information about accounting, inventory, sales, and purchasing. There is some customer information there, but it may be limited. The CRM system contains more detailed customer information, but it may not integrate well with the transactional information in ERP. Digital marketing automation, likewise, is restricted to its own limited view of the world.

Integration can mitigate this problem of information silos to some extent, but it can only go so far. Unfortunately, many organizations have come to accept tedious workarounds as a necessary evil. The process usually goes something like this: First, you run reports from two or three different systems. Then, you export the resulting information to Excel, consolidating those into a single spreadsheet. Finally, you filter, format, and add formulas to bring it all together.

That process is incredibly time-consuming, so it precludes the possibility of running those kinds of reports frequently. The resulting information is out of date as soon as you produce the report because it came from a static copy of data that has since become stale. The manual copy/paste process also tends to introduce errors, which can ultimately result in poor business decisions.

For truly effective reporting that provides a unified view of the business, BI systems must bridge the gaps between all of the software systems that business leaders rely on to manage their organizations. A good BI platform must deliver information in real time, and it needs to be easy enough to use that anyone in the organization can design and modify reports without specialized skills.

As You Migrate to Cloud ERP…

As organizations start down the path toward cloud ERP, it is imperative that they give careful consideration to the implications for reporting and analytics. As software vendors have transitioned to a cloud-first approach, most have taken the necessary steps of changing the way you access data. For security reasons, companies running a cloud ERP system can no longer make direct database queries using structured query language (SQL). That is a technical change, but it has profound implications for BI.

Companies that currently run Microsoft Dynamics AX, for example, will face a multitude of choices about how to access data and run reports when they migrate to Microsoft Dynamics 365 Finance & Supply Chain Management. Companies running other ERPs will find themselves in a similar situation. Each of those choices has its unique disadvantages and brings with it some unique considerations as to system architecture, cost, performance, and long-term IT staffing requirements.

In other words, ERP customers who migrate to the cloud risk being blindsided by a relatively simple (but extremely important) technical change to the way they access ERP data. Many of the proposed new approaches to data access are driven by new technology that has not yet reached maturity. For companies seeking a reliable BI platform with a low total cost of ownership, a better approach is to seek a stable, proven reporting and analytics product designed for high performance and ease of use.

An Intentional Approach Is Critical

BI can be something that effectively “turns the light on” in any organization. When the entire team is working from the same playbook with access to a single source of truth, everyone can focus on the same targets, working with the same KPIs to drive action and improve processes.

While technology is ultimately part of the conversation about BI, it should not be the starting point. An effective approach to BI must serve the needs of the tactical and strategic decision-makers in the organization. It should address financial and operational reporting requirements with powerful and flexible tools that make it possible for anyone in the organization to design and modify ad hoc reports, without needing specialized training or IT skills.

At insightsoftware, we recommend that company leaders carefully consider some key questions that impact their long-term strategy for BI:

  • What are the systems of record for your critical business data? These usually comprise the starting point for developing a unified approach toward reporting, bringing together information that gives business leaders a holistic, unified view of what is happening in the business. Typically, such systems include ERP and CRM, but they often include specialized industry-specific software as well.
  • How are people throughout your organization currently using reporting? Which reports are decision-makers relying upon every day, every week, or every month? What happens when you need an ad hoc report?
  • Do your current financial reporting systems support rapid and efficient period-end closing?
    Could the period-end process benefit from greater efficiency and automation? Do reconciliations and supporting worksheets automatically link to numbers that come directly from the general ledger and subledgers in the ERP system?
  • How timely is the information that stakeholders are getting today? Have there ever been times when you needed information on very short notice, but it was unavailable? What were the implications of that delay?
  • How accurate is the information that stakeholders are getting today? Are errors and inaccuracies frequently discovered after the fact? Have they resulted in meaningful costs to the company? Are there multiple versions of the truth? Does the organization frequently struggle with arguments over “which number is correct?”
  • Is your organization planning a migration to cloud ERP and/or cloud CRM at some point in the future? If so, it is important that you partner with a vendor that can support your needs today and in the future as you transition to the cloud.

Answering these questions will help you identify what you want to achieve with BI in the near future, and what types of benefits your organization can achieve, both in the short term and the long term.

At insightsoftware, we focus on serving the needs of finance and accounting teams. Often, when organizations are developing a BI strategy, the unique reporting needs of the finance department are overlooked. That does not have to be the case, however. As you develop your BI and reporting strategy, there are some key factors to consider to ensure that finance’s voice is heard. Learn more about those factors now by downloading our guide entitled Five Key Factors to Consider When Evaluating Financial Reporting Software.

Five Key Factors Cta