Let’s start by defining what we mean by true business intelligence. We define true business intelligence as having immediate access to the accurate insights needed to understand the success of your critical business operations in order to easily make continuous improvements.
Key business operations are any operational functions needed to achieve your company vision and mission goals including, but not limited to:
- Marketing
- Sales
- Profit margins
- Service satisfaction levels
- Product quality
- Team engagement
Having immediate access means that you can click a button or two and see the critical information that you need to make smarter business decisions. This means that the data is being collected accurately and that it is being presented in a way which allows you to dig in, see exactly what you need, understand trends, identify cycles, and increase the intelligence you have about your business.
We all have access to more business data than ever before, but access to all these data points seems to have created a bigger void in true business intelligence for many companies. Let’s take a look at the difference between data, information and true business intelligence.
Data to Information to True Intelligence
Information is defined as what is conveyed or represented by a particular arrangement or sequence of things. By understanding what data to gather and arranging it correctly, useful business information can be gathered.
Business intelligence takes that information to the next level by providing a business with much more than simply a collection of disparate information. As we stated earlier, true business intelligence is having immediate access to the accurate insights needed to understand the success of your critical business operations in order to easily make continuous improvements.
Achieving this level of access, continuous improvements, and insight is the focus of this article.
True Business Intelligence Requires Focus and Discipline
With so much business data and information available, most companies get lost in a sea of disparate numbers, reports, charts, and graphs. Unfortunately, this abundance of software generated, automated reports often distract businesses from focusing on the intelligence they truly need to effectively understand and grow their business.
In this article, we are asking you to simply take a step back from all the data and the information your systems provide and focus on identifying intelligence you need to become more successful. Even though we are telling you that this is what it takes, most people reading this article will not take the time to do this. It is simply easier to use the information (good or bad) to which they already have access. But if you do take these extra steps, you will be greatly rewarded!
To create true business intelligence for your organization, you must focus on the art of essentialism. In Greg McKeown’s book Essentialism, he defines this as “the view that some properties of objects are essential to them.” When it comes to business intelligence, essentialism is the intentional elimination of all the extra data and information which isn’t critical to your objectives. This means that by looking at less information, and only the most essential information, you can gain greater levels of true business intelligence and drive greater success. Let’s look at how to do this.
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Common Challenges
Achieving true business intelligence is not easy. It has its obvious challenges. Some of these include:
Every Business Is Different
You Need to Identify the Right Information to Collect
Until you precisely identify what essential information you need at the different levels, the odds are that you currently do not have the right measures or critical data collection systems in place. If your team being engaged and empowered are an essential factor in your business success and you are not surveying your team to accurately measure this, you cannot have your finger on the pulse of this critical success factor. Many of these data collection systems will need to be created. This takes some time to plan and achieve.
Creating Opportunities for Continuous Improvement
True business intelligence requires not only having immediate access to the right insights, but also continuous improvement. The only way to achieve continuous improvement is by allocating time and having the discipline to review the information on a set schedule, determine what actions to take, document the impacts of your actions, and continuously identify new opportunities.
Creating Your Business Intelligence Levels
With all the reports, charts and graphs, we fool ourselves into believing that our finger is on the pulse. But we don’t stop to ask if we are looking at the right information. To ensure we’re evaluating the right insights, we have segmented business intelligence into three distinct levels.
- Level 1 Business Intelligence – Macro
Macro business intelligence consists of the essential insights for your business at the highest level. These are the overall company or division key measures of your progress towards your goals.
- Level 2 Business Intelligence – Segment
Segment business intelligence consists of the essential insights for your business at key operational area levels.
- Level 3 Business Intelligence – The Segment Levers
Segment Levers business intelligence consists of the essential insights at an operational level to identify the specific levers on which you need to “pull” (focus and improve) to achieve your goals.
For example, let’s say that you own a professional services company. You have internal marketing, sales and client service teams, and your goal is to grow your revenues by 40% in the coming year, while maintaining your 20% profit margin.
A critical step to creating business intelligence is to establish SMART Goals for your essential success measures. The word SMART is an acronym for:
- Measurable – it can be and has specific measures
- Achievable – based on past performance or industry benchmarks
- Relevant – it will help you achieve your desired results
- Time-Bound – has a time duration
To achieve your growth goals, your business intelligence levels might look like this.
Level 1 Business Intelligence – Macro Measures Required
- Company Revenues vs SMART Goal – Segmented by
- Month or Specific Date Range
- New vs Recurring Clients
- Specific Service Offering Revenues
- Company Profit Margin vs SMART Goal – Segmented by
- Month or Specific Date Range
- Company Team Engagement & Empowerment Score vs SMART Goal – Segmented by
- Month or Specific Date Range
Level 2 Business Intelligence – Segment Measures Required
- Marketing
- # Qualified Leads Generated vs SMART Goal – Segmented by
- Marketing Channel
- Cost Per Lead / ROI
- # Qualified Leads Generated vs SMART Goal – Segmented by
- Sales
- Qualified Lead Closing Rate vs SMART Goal – Segmented by
- Marketing Channel
- Cost Per Sale / ROI
- Average New Client Engagement Revenues vs SMART Goal
- Qualified Lead Closing Rate vs SMART Goal – Segmented by
- Professional Services Delivery
- Client Satisfaction Score vs SMART Goal
- Client Retention Rate vs SMART Goal
- Client Spend Revenue Increase Rate vs SMART Goal
- HR
- Team Retention Rate by Segment vs SMART Goal
- Team Engagement & Empowerment Score by Segment vs SMART Goal
- New Team Member Recruiting Success by Segment vs SMART Goal
- Finance
- Revenues – Segmented by
- New Client vs Existing Client vs SMART Goals
- Profit Margin – Segmented by
- Service Offering vs SMART Goals
- Revenues – Segmented by
Level 3 Business Intelligence – The Segment Levers Required
To keep this example simple, rather than outline all the segment levers for each operational area above, we will only focus on the Marketing segment.
Today, successful marketing is always a multi-channel strategy. Some of these different channels may include:
- Partner Referral Programs
- Paid Search Engine Marketing
- Content Marketing
- Customer Journeys
- Email Publications
- SEO
- Tradeshows or Public Speaking
- Networking
- Etc.
- Impressions – the number of people who saw your ad in a given period of time
- This goal can be determined using paid research tools and your campaign budget.
- Click Through Rate – the percentage of people who see your ad click on it
- This goal can be determined by industry averages (2% to 3%), your industry and your past performance numbers
- This goal can be determined by industry averages (2% to 3%), your industry and your past performance numbers
- Cost Per Click – the average cost you pay for someone to click your ad
- This goal can be determined by Google’s estimating tool
- This goal can be determined by Google’s estimating tool
- Landing Page Conversion Rate – the percentage of visitors who turn into qualified leads
- This goal can be determined by industry averages (5% to 10%), your specific offer, and your past performance numbers
- This goal can be determined by industry averages (5% to 10%), your specific offer, and your past performance numbers
- Cost Per Conversion – the average cost for you to generate a qualified lead
- This goal can be determined by industry averages, your lead scoring criteria, and your past performance numbers
Business Intelligence FAQs
As you read through the levels of business intelligence, the odds are that you have access to your Level 1 information. Most businesses can get these numbers. However, these simply reflect results. As you move to Level 2 and Level 3 business intelligence, you dive deeper into the true leading indicators of your business success. These are the areas where you can affect real change and help your company to grow.
Some frequently asked questions include:
How do I create my essential measures?
Determining your essential measures, at all levels, should be based on your company vision and your specific goals. Every business goal has specific key measure components that will drive its success or failure. The more important the key measure, the more essential the systems to measure performance become.
Where can I get industry performance benchmarks for my SMART goals?
This can be a bit tricky to figure out sometimes. Every industry is different, and every company is different. Doing a Google search can often help find some information. Another alternative is to engage a consultant to help you establish these baseline measures.
How can I get this critical information from my systems?
Being able to get this critical information takes commitment and intention. Most of the information you will need is not the information you have. Often you will have to develop the systems and tools to acquire this information. Just be sure to be 100% clear about what you need, then develop the systems to get this information.
How can I track and easily see this information?
If you do not have a data specialist on your team, you may have to engage someone to help you establish these systems, collect the insights you need and interpret the next, right course of action to achieve your goals. Operating with a plan and focusing on the right activities can save you years of spinning your wheels.
How To Use This Information
- Clearly define your specific business goals, year by year, for at least the next 5 years. Some of these broad goals might include:
- Revenues
- Gross Margins
- Number of Employees
- Geographic Reach
- Document the key Level 1 Business Intelligence – Macro Measures that you need to track to achieve your specific business goals. These will most likely be the same broad measures as outlined in the step above.
- Circle the Macro Measures that need the most attention. These may have stopped or slowed your company’s growth in the past. These are critical issues which you must resolve to achieve your goals.
- Ensure that you have the key measures in place to get this accurate information and that you can easily and visually see your Level 1 Business Intelligence – Macro Measures.
- Establish regular reviews (at least monthly) of these key measures and discuss potential improvement steps that you can begin taking.
- Using your critical issues as essential priorities, document the key Level 2 Business Intelligence – Segment Measures you need to track to be successful in achieving your specific business goals.
- Ensure that you have the key measures in place to get this accurate information and that you can easily and visually see your Level 2 Business Intelligence – Segment Measures.
- Establish regular reviews (at least monthly) of these key measures and discuss potential improvement steps that you can begin taking.
By taking these 8 steps, you gain clarity and begin to see immediate improvements to your overall company performance.
Conclusion
Gaining true business intelligence will allow you to grow your company. Achieving true business intelligence requires clarity, focus, discipline, and essentialism. Just because you have a lot of data, charts, and graphs does not mean that you have the critical insights for true business intelligence. As a matter of fact, this clutter may be getting your way. Once you implement this methodology, practice these principles, and gain true business intelligence, you will enjoy growing your business faster, smarter, and easier.
About Webolutions and a Special Offer
Webolutions is a full-spectrum business consulting and strategic implementation company. We help businesses across the country identify and effectively bring their unique story life, allowing them to scale faster, smarter and easier.
Our specific areas of expertise include:
- Differentiating Brand Development
- Marketing & Communications Strategies
- Customer Journey Planning & Implementation
- Enterprise Website & Application Development
- Systems Integration
- Organizational Development Strategies
- Team Alignment & Performance Solutions
- Business Performance Intelligence Systems
Special Offer – To speak with one of our consultants about developing true business intelligence for your company of at least $5 million in annual sales, call us at 303-300-2640 and request a Free Business Intelligence Review. During this 30-minute introduction, we work together to help you better understand this system, discuss your business goals, and start outlining your plan. You can also email any questions to info@webolutions.com.