Business Intelligence (BI) is a broad concept that typically refers to the technologies used to identify, extract, and analyze business information. This business information can provide historical, current, and projected views of financial and operational data. Good business information enables a business owner to easily monitor the health of the business and make informed, strategic decisions. Until recently, the technology to provide true BI has only been available to large companies. Now, information and technology is available to small to mid-size businesses that can provide these types of capabilities in a cost effective manner with a quick return on investment.
Enabling Business Intelligence in a small to mid-size business requires 5 key steps to ensure success. In this post I layout Step 1.
Step 1: Fix your data
This step is especially relevant to the small business. The accuracy and timeliness of your financial data is critical to generate valuable information about the state of your business. A business owner should be able to general accurate financial statements or other financial data on a daily basis. If transactions are not entered into your financial software package correctly, or you are dependent on an accounting firm to generate financial statements, you cannot use the information generated to make timely decisions. When you finally get the information, it is outdated and other changes in the business may have already occurred. Many small businesses cannot afford in house accountants with advanced skill sets. The key is to train yourself or your bookkeeping staff to properly manage the finances and use your financial software correctly.
A business owner may need to bring in an accountant or consultant to help fix historical data and train the staff on financial software and transaction entry. This one time effort can be well worth the time and cost. It will put the business owner in a position to be confident in the financial state of the business at all times.