January 23, 2017
All businesses know the value of automation and online systems. Obviously, they make businesses run better, more cheaply and more efficiently. It is easy to forget that technology is worth little without human involvement. Most technology is merely tools built to make humans function better. One great way to combine people and automation is with data. Therefore, they are using business intelligence to make money.
In his book Zero to One, venture capitalist Peter Thiel states that “while computers can find patterns that elude humans, they don’t know how to compare sources or how to interpret complex behaviors. Actionable insights can only come from a human analyst.”
Peter states that companies found the maximum benefit by having a computer find patterns or highlight items of interest culling through large masses of data, then allow an expert to look at the analytics to pick things to act upon. Rather than having one single solution either all computer based or all human based, team them to bring together the best of both for greater results.
When it comes to Business Intelligence software, the quality of the BI tools is how much analysis is provided to the expert so they can apply their knowledge to make recommendations for actions. If you doubt this, ask yourself if you have ever had to call a consultant in to interpret a situation for you using the information that you have. He may have run the analysis for you but, he only left you with recommendations with which you were to make decisions that would be best for your business.
So by now, you may be saying you agree but asking how this interprets to making money.
Catching Revenue Loss as it Starts
Business Intelligence software in a C-Store company will look for trends while gathering data over many days, weeks, months, or even years. This will tell you when downturns should be expected and when things should be on the rise. It also allows you to see when you need to take action to optimize the sales or performance peaks and take action to minimize those dips you face each year.
Better Inventory Purchasing and Placement
When viewing the data, your managers will find things like the slow moving products that should be eliminated from your purchasing. It will highlight the hot things where the money you just saved on the slow movers can make you more money. You will be certain that the inventory placed in the proper place in each store.
It will monitor revenue impacting details like customer counts, cash over/short, voids, and returns, all of which will flag when problems may be starting. Human monitoring may not observe it to be a problem right away. For example, if $50 a week loss was coming in at only $2.50 a shift. You want to find revenue problems early. As such, you fix their impact to your bottom line right away.
Find the Things that Business Hides
Because the monitoring process and analysis are automated, more can be considered in your evaluation. Manual analysis takes time. It is hard to rely on paper reports and self analysis. Without it you are you can only use the data you can see and process. How many numbers can you track in your head? With the automation for Business Intelligence, you merely have to look at the results. That is, it looks at all the data and finds the key points of interest. Then, you can dig into the details. Of course, you only use the details relating to the important facts. Clearly, this is a great use of time. Look at the detail when it matters to solve problems. Skip the stuff that is normal.
The focus of the key data is value. It is not enough to report a loss of $50 in a week at a store. This alone will not solve your problem. Instead, a supervisor knowing that one cashier is have 5 times the shrink events as all others, allows that persons work to be reviewed for those transactions that are problems.
BI software allows you to easily monitor all aspects of data impacting performance. Managers just don’t have the time to do everything. It is not simply that analytics is pointing out areas of concern. Rather, it is pinpointing of the list of areas of concern that initiates the fix. Everyone is so busy, that finding problems is just too hard. Having a list of a few key issues saves times. Naturally, the problem-list makes it easy to know what to do. Perhaps a problem list is one of the big reason c-stores are using business intelligence to make money.