Your business won’t run on autopilot. Leveraging business intelligence reporting can be a great way to provide those insights to empower your team to make effective decisions for your company.

A healthy business is about more than just cash in the bank. At a more foundational level, the ability for a healthy business to perpetuate is driven by visibility into the multitude of factors that roll up into the picture of financial and operational health. To be successful at scale and over time, a business needs to understand what these core metrics are, where they come from, and what impacts them. Most importantly, a business needs some framework that brings together these potentially disparate data points and distills them into a format that is easily interpreted, timely, and actionable. Business intelligence and business reporting serve this function.

The notion of Business Reporting or Business Intelligence (often just Reporting, BI, Data Analysis, etc.) is that every business needs a way to understand what's happening in the business so that we can make informed strategic and tactical decisions to improve the performance of the business. To accomplish this, we generally break down reporting into several components.

First we look at needs. Each industry and business is different. Even more nuanced, businesses on different points of the maturity lifecycle each have different needs. At a high level, we can generally distill down our reporting needs into a few categories: what are the core metrics that tell the story of the health of the business, from where will we source that information, and what are the factors that can impact those metrics? These are foundational questions and answers we use to build the basis for our Business Reporting or Business Intelligence exercise. A professional services business, for example, likely cares about metrics like utilization, average billable rates, accounts receivable collection days, and sales forecast. This would differ greatly from a manufacturing company that looks at WIP, inventory consumption velocity, machine uptime, production bottlenecks, and other capacity related metrics. Once we have identified the "what" we start to plan for the "how." Where are these data points stored, if anywhere? Are they available programmatically, or does a person have to manually collect them? How often are they accurate and up to date? Finally, we start building a list of assumptions and impacts that would drive these metrics. Utilization is based on booked work; WIP might be driven by the availability of vendor inventory or shipping carrier capacity. By building a proactive list of assumptions and drivers for our metrics, we have the tools to understand more deeply what the number means.

Next we identify structure. Simply outputting numbers to a screen does not help tell the story of those metrics, and may not be easy to consume. Instead, for each of our metrics we need to identify the best way to tell that story, both visually and by the numbers. Business intelligence is disregarded if it's challenging to incorporate the output into our decision making framework, so it's important to consider your audience, their affinity for detail, and how they intend to use the information being provided to them. That being said, it's important to also have the details to backup those reports. When a metric is showing unpredicted results, it's important that answering "why" and "how" are easy. This further emphasizes the importance of understanding all the impacting factors to the metrics, so it's easy to pinpoint unpredicted changes to our data.

Finally, we evaluate tools. Not all business intelligence and business reporting tools are created equal. Each tool tends to have a particular purpose, data, or visualization scheme in mind, and so the exercise of evaluating and selecting the toolset that best meets your business needs is critical. A purely data visualization tool, such as Tableau may be great for visual storytelling, but might not provide deeper intelligence to answer more pointed questions. Microsoft's PowerBI could be a great option for combining visualization with detailed data, but may be lacking when trying to forecast future performance based on current data. Forecasting and Budgeting tools can be helpful for looking into the future performance of your company, but may be lacking when trying to answer questions about how we arrived at today. The bottom line is that having a helpful team of consultants like the folks at GRAYBOX can be an invaluable resource when embarking on this exercise, both in terms of structuring and making your plans for reporting, as well as defining, evaluating, selecting, and implementing the right toolset for the job.