Why Business Intelligence is Top of Mind for CFOs for 2023

The term “business intelligence” (BI) has been in common use for several decades now, referring initially to the OLAP systems that drew largely upon pre-processed information stored in data warehouses. As technology has evolved, BI has grown steadily more powerful, affordable, and accessible. It is able to draw from a broader array of data stores, including traditional relational databases, robust data warehouses, and cloud-based data lakes.

As the cost benefit ratio of BI has become more and more attractive, the pace of global business has also accelerated. The digitization of nearly everything has led to a flood of new data–from the transactional information stored in a company’s enterprise resource planning (ERP) system to the real-time feedback flowing from customers through various social media platforms.

For CFOs, the goal of business intelligence is to grow the business, operate more efficiently, and increase competitive advantage. Perhaps just as importantly, BI helps C-level leaders to better adapt to a volatile business environment by serving up real-time information to support them in making sound business decisions.

Let’s look at some of the ways that BI will drive value in 2023, making it a compelling proposition for CFOs and other key members of the finance team, as well as the rest of the C-suite.

Discover Meaning Amid All That Data

Why business intelligence? We often hear business executives complain that they’re drowning in data, but that it’s not available to them in a way that can truly help them make better decisions. It brings to mind the famous line from the Rime of the Ancient Mariner: “Water, water, everywhere, Nor any drop to drink.”

BI solves that problem by organizing information and making it available in such a way that it can be easily manipulated and analyzed. BI allows users to play with data, arrange it into different hierarchies, filter it, and summarize the information in various ways. In short, it’s the exploratory character of truly great BI tools that makes them so powerful. When a user can formulate a question on the fly and find answers quickly and easily without expert assistance, they are free to discover meaningful trends. BI can open the door to an “Aha!” moment, leading to insights that help drive innovation and better business decisions.

Know Your Customers

Businesses today have access to more information about their customers than ever before. Transactional records and customer master information are typically stored in an ERP system. Sales and customer service interactions are tracked in CRM. Loyalty cards and third-party data provide access to even more information about who your customers are, when they shop, and what they purchase.

A critical element in the success of any business is its ability to predict customers’ needs, understand their buying behaviors, and learn to communicate effectively with them. Just as BI tools can help business leaders to explore data and identify key takeaways; they can help those same leaders develop a better understanding of the markets they serve. That may include segmentation into geographic or demographic categories, for example, to better understand what drives purchase decisions.

When the strategic thinkers within an organization have access to that kind of business intelligence, it leads to a deeper and more intimate relationship with the company’s customers and prospects.

Allocate Your Spend More Efficiently

In a world where digital interactions accompany so many of the real-world decisions and actions a customer takes, you can gain powerful insights into which marketing tactics are leading to your intended results and which ones are not.

By combining transaction history with responses to digital campaigns, promotions, and other interactions with your brand, you can quickly develop insights into which marketing tactics are effective and which ones are falling flat. At a more granular level, you may discover that some segments of your audience respond positively to an asset or a campaign, whereas others do not.

A good business intelligence system will enable your company to combine data from multiple systems across your enterprise, including enterprise resource planning (ERP), customer relationship management (CRM), digital marketing platforms, social media, and web analytics; and to draw marketing insights from the entire body of data that results. This will ensure that you have the information you need to optimize your marketing spend.

Spot Problems (and Opportunities) Early

Imagine that your company aims for a 60% gross margin on its aggregate sales. Thanks to a real-time BI dashboard, you suddenly notice a spate of orders that are coming in with a gross margin of less than 5%. Without real-time access to your most important KPIs, you might have missed the fact that someone made a pretty significant pricing error on one of your most popular products. How much money might your company have lost if you hadn’t caught that problem quickly and fixed the error?

The problem with many anomalies is that they’re often buried amid other details. Spotting an outlier quickly can mean the difference between a minor glitch and a major failure. This is not always about spotting problems, though. It can also open the door to opportunities. An unexpected spike in the sales of a particular product, for example, might merit further investigation. If a popular celebrity just said something good about your product on social media, then it might be time to call your suppliers, expedite existing shipments, and increase the volume on your upcoming orders.

Spotting those kinds of anomalies quickly, as close to real time as possible, helps business leaders to fend off problems and seize opportunities.

Streamline Operations

In some cases, management may already be well aware that there is a problem, but they need better insights into exactly what is going on. When supply-chain bottlenecks occur, for example, BI tools can help managers understand what’s happening on the ground. With the right analytics, a supply chain manager can not only isolate the source of a particular problem, but identify potential alternatives and apply data-driven analytics to assess the best options for moving forward.

As businesses around the globe struggle with supply-chain bottlenecks, access to clear and accurate information can go a long way toward resolving the most urgent problems.

Adjust Rapidly to Change

In a rapidly changing business environment, business leaders must constantly monitor and adjust to changing circumstances.

Changing circumstances inevitably prompt a flurry of questions from executive management. In April 2020, many food and beverage executives were asking questions like “What will happen to the business if our sales to restaurants and institutions drop by 90%?” and “How have recent events affected sales of consumer packaged goods through grocery stores?”

One of the key characteristics of a good business intelligence platform is its ability to deliver answers to those kinds of questions. Again, the exploratory nature of BI naturally lends itself to asking these kinds of questions that might never have been asked before.

When the ground is shifting beneath your feet, the ability to get quick answers is essential.

BI Lays the Groundwork for Even Better Things

As we look ahead to the coming year, we see more and more companies adopting advanced analytics to drive innovation and competitive advantage. The use of BI and other big data technologies as value drivers continues to grow. Forward-looking business leaders are taking note, developing the competencies necessary to turn that into a long-term strategic advantage.

By investing in BI today, companies are achieving a threefold benefit:

1. They are achieving better business results immediately because of the insights they can draw from their BI tools.
2. They are developing in-house data competencies, positioning their organizations to continue extracting more value from their information assets in the coming years. This is especially true of finance teams, which serve as the go-to analytical resources for the rest of the company in most cases.
3. They are beginning to amass the data assets that will serve them for years to come. This includes the capacity to leverage and integrate data from across multiple systems into a holistic view of the business. Because data storage has become so affordable, some businesses have committed to collecting and storing information that might otherwise have been archived or deleted simply because they understand its potential value in the future. Social media and digital marketing data, for example, might not have been preserved in the past. Today, there is little reason not to save it as an additional resource for the future.

The Future Is Now

BI has arrived. Analytics are a hot topic for 2023, and for good reason. Business leaders have come to the realization that without real-time visibility across multiple information systems such as ERP, CRM, digital marketing, and the external systems they share with trading partners, they will not have the access they need to quickly spot problems and opportunities, make well-informed decisions, and respond to crises when needed.

As the traditional “owners” of analysis in most organizations, CFOs understand the compelling case for investing in BI. If you’re ready to explore your options for BI systems, insightsoftware can help. We’ve been delivering powerful reporting, planning, and BI tools for over three decades. To arrange a free no-obligation demo, contact us today.