Use Business Intelligence to Make Profitable Decisions

As the saying goes, "knowledge is power." To generate accurate, valuable knowledge from your company's operations, you'll need to develop an effective business intelligence (BI) program.

Simply put, BI is a technology-driven process for analyzing data and presenting actionable information to help you, the business owner, and your leadership team make more informed decisions. For example, if you're clear about which customers spend the most money and what they buy, you can develop marketing campaigns and promotions focused on selling specifically to these high-value customers.

Not surprisingly, a well-designed BI program can provide your business with a significant competitive advantage. Consider the following upsides of a well-executed BI program:

1. You'll know the location of relevant data. Depending on the size and complexity of your company's business model, data might reside in multiple systems. Sometimes even your employees don't know exactly where key data is located. The goal is to increase the probability of locating relevant data. Specifically, you need to develop data maps that identify how information flows throughout your organization. You can then use these maps to capture all of the data elements needed to form the foundation of your BI program.
2. You'll be better able to organize, store, protect and analyze that data. In addition to locating data, you need to be able access it quickly while also ensuring that it's protected from corruption and hackers. Various software tools are designed to store and analyze large and complex sets of data. Naturally, this software must be protected by multiple levels of information security measures.
   
3. You can provide authorized outside parties with the data they need to help your business. CPAs, for example, are highly adept at analyzing large sets of data. They can not only analyze your company's data, but also compare it to similarly sized businesses in your industry. (This is called "benchmarking" -- see "How Business Intelligence Is Gathered," below.) And, if asked to do so, your CPA can look for indications of both internal and external fraud — especially if the data includes information on individual transactions.
4. You'll be able to use high-quality BI data in your financial reporting. Identifying the appropriate metrics to track and report as part of the BI program presents a considerable challenge. Occasionally, "analysis paralysis" can result when companies have too much information available for decision-making. Your CPA can help you find and gather the right pieces of information and use that data to properly generate your financial statements according to Generally Accepted Accounting Principles.
5. You'll have the peace of mind of knowing that your on the right track. Once the appropriate BI framework is in place, your CPA can help you continue improving the program. The better your accountant gets to know your company and its industry, the more refined and useful your data will become.

Engaging your accounting firm in the development of a robust BI program increases its overall effectiveness and can help the accountant to improve the overall quality of traditional services such as fraud detection, auditing and tax preparation, etc. Further, leveraging your accountant's abilities allows company personnel to focus on making decisions versus gathering the information needed to make those decisions.