Business Intelligence – The key to unlocking profitable growth and operational efficiencies

Shelley Legin
President, Top Line Strategy Consulting

Businessman on online Financial Assessment. Team work in the office

Let me start by asking, does this dialogue about the obscure goal of changing your business data into business intelligence sound familiar?

“If only we had actionable information, we could make better decisions.” And of course, the response, “well, we have mountains of data, but no easy and timely way to organize it into useful information and put it in front of our staff.” All quickly summed up by the inevitable, “I could ask IT if they can run a report.”

Times …have… changed. IT, enabled through a proper strategic and operational planning process, can do much better than that. Business intelligence, accessed through a desktop “dashboard” will revolutionize your methods of achieving profitable growth and operational efficiencies. Dashboard information can take the daily guesswork out of performance tracking, campaign management, sales planning and targeted product launches, to name a few areas. This is, as many have found, much easier said than done. But, with a proper strategic planning process creating key strategic and operational metrics, plus good IT tools will show that the real motive here is that selling is service. But business intelligence driving effective strategic and operational decisions is no… longer… elusive.

There are many plug-in software solutions that claim to congregate, organize and present data in dashboard format. Lodestar offers one of these solutions, and they have a proven track record of delivery within the Canadian Credit Union system. I recently witnessed the dashboard in action. A mid-sized credit union invited me as a business plan consultant for 2011-15, and during the planning engagement, I had an opportunity to test drive the dashboard with some of their key business intelligence metrics. As a seasoned and “hard to snow” planner, I remained sceptical until I had the first live demonstration. The COO clicked here and there, and I watched my desktop screen turn into a decision-makers dream. Better yet, the vital business information appeared in graph format, with the ability to drill down into the detail just a click away. Not only was the information displayed high-level key strategic metrics for monthly Executive and Board Meetings, (such as ROA, Efficiency Ratio and Interest Margin;) the dashboard user also had the ability to drill down into the detailed information driving the bottom line.

Although the dashboard view is currently mostly enjoyed at the senior levels, many Canadian credit unions have plans to roll-out the dashboard beyond the Board and Executive teams in 2011. The true payback will be in the well planned workflow integration with their respective banking systems. One of the documented keys to successful Business Intelligence (BI) strategies is to make sure the user interface presents the data that the user needs to do his/her job optimally and make effective decisions, member by member.

A key success factor in building an effective interface and a low total-cost-of-ownership (TCO) technology like dashboards, is to start with the end in mind. Data-driven decisions should mirror your corporate planning metrics (often summarized in the form of the Balanced Scorecard, which originated by Drs. Robert Kaplan, [Harvard Business School] and David Norton. The balanced scorecard is a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organizational performance.) Today’s balanced scorecard has evolved from its’ early use as a simple performance measurement framework to a full strategic planning and management system. It transforms an organization’s strategic plan from an informative, but passive document, into the metrics to manage and drive key decisions for the organization on a daily basis.

Essential to unlocking the power of this business intelligence is a proper planning process, which enables organizations such as credit unions to execute their strategies with the benefit of focused measurements and information. Starting with the end in mind is imperative; having the desired 3 – 5 year goals and measures determined in advance of building the dashboard (and the necessary data streams and feeds) will help ensure effectiveness of the newly created information, and make costly rework unnecessary. Understanding the proper information required by each level of staff to make appropriate decisions, and how they can act on the information, will make the business workflow design smooth and effective.

During the design and implementation of enterprise-wide business intelligence, a new dialogue emerges. For instance, staff begin to ask and answer pertinent questions involving on-strategy business development and efficiency gains, including the following examples:

  • “What information will trigger us to call high potential target members for the new deposit product?”
  • “What are the leading (data-driven) indicators of attrition of members?”
  • “ROA and our Efficiency Ratios are down. What caused it and what is the most effective area to target to increase both?”

We all realize that the days of IT working in isolation from business units are long past. The ability to effectively design and implement new business intelligence systems is now available; leveraging IT with strong strategic and operational business planning, to deliver specific operational, decision driving information against key measures and metrics.

This properly developed business intelligence will unlock profitable growth consistent with your strategic planning aims. Be clear up front and build a dashboard system that presents what your executive and staff need to take action and grow your member business – intelligently and profitably.