In this article, we will review the use of modern BI solutions as a decision support tool at a number of levels:
1) Strategic Decision Support Tool - concerned with the ‘big picture’, and the defining or shaping of long term future direction (what products are we selling, what markets should we enter or exit, where do we want to be?). Typically this often takes account of information largely external to the organisation, is less certain, and is the domain of high level management and executives.
2) Tactical Decision Support Tool – focuses on the ‘how’ and those building blocks and initiatives required to achieve the overall strategy. This would typically be the battleground of middle management. (do we need to recruit or train more staff in order to introduce new product lines, should we invest in additional or specialist machinery to increase capacity or facilitate production of the new SKUs, and what marketing strategy should we adopt to support any planned launch?).
3) Operational Decision Support Tool - revolves around the ‘now’, and action taken on the ground at a day-to-day level to achieve tactical objectives (how will we service a particular customer on promotion, how much material should we order, do we need to run special deliveries if there is a risk to customer service, should we collect and rework rejections or simply dispose of stock and replace it with fresh product?).
By using a BI tool to create appropriate metrics and track progress or non-conformances against predefined targets, it is possible to identify key areas of focus. This drives the decision making process. BI as a decision support tool. As an example at an operational level – a planner, via an alert notification, may be made aware that a primary supplier has short delivered. The push notification directs their attention to this fact as it occurs, and they can take reparatory action to minimise associated risk (forcing the primary supplier to run a special delivery, or sourcing goods from another supplier). Alternatively, at a more tactical or strategic level, it may become apparent that there is a large deficit in the revised forecast against budgeted sales. The resultant action may be to run increased promotional activity to drive revenue, or even enter a new and expanding market longer term. Using BI as a decision support tool will allow you to explore options and what-ifs and make faster, more informed decisions.
Modern BI software is without the constraints of overnight routines or complex ETL processes, and instead accesses information live and at the source. This speeds up data availability, and improves time to response allowing decisions and follow-up action to be taken sooner than it otherwise would. BI as a decision support tool. The very fact that reports, dashboards and alerts can be created containing data that is relevant to only the person constructing it, aids clarity and prevents the need to sift irrelevant detail. At an operational level for example, an individual may be concerned with actual vs expected machine output, or sales vs forecast on promotion and the potential impact. At a more tactical level a manager may be interested in machine efficiencies vs those budgeted. Or at a strategic level, focus could be given to top line sales vs target and forecasted landing position. In addition, the functionality to drill up, drill down, and slice or dice information using the BI solution provides the requisite depth of detail for all levels and enhances visibility. It is this detail which supports a more informed decision making process, allowing data to be interrogated adhoc and on the fly, facilitating a swifter response. The key is that it provides the right information, in the right format, to the right people, at the right time – and that’s why it’s such a powerful decision support tool.
The other function that new BI solutions offer as a decision support tool is that they can facilitate access to a breadth of information sources previously not available. They can provide a valuable insight into untapped arenas external to the organisation. This may include links from social media sites or external marketing bodies for example, providing feedback on what is being said about the company’s products, or those areas which are in growth or decline. Again, this may shape future direction, and aids decision making in terms of making changes to the product, entering new markets, or deciding where to invest etc. A BI tool provides the functionality to present data from an explosion of sources, into a manageable user-friendly format that can actually be acted upon.
So hopefully we’ve illustrated how BI can be used as a decision support tool. BI is really all about making faster, better decisions.
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