Many Accountants are being asked by their bosses or their clients about Business Intelligence.. about what it is, and if they need to use it in their businesses.
Some Accountants feel threatened by it, as they believe that B.I. software is replacing some of the services that they themselves have delivered for many years.
In order to put it into perspective, Accountants need to fully understand what Business Intelligence is, and how using the resulting Business Analytics can in fact enable them to become more valuable to their organisation than ever before.
‘Business Intelligence’ vs ‘Business Analytics’
‘Business Intelligence’ and ‘Business Analytics’ are big buzz words in the global business community today. What are they? Why is there so much interest in them? And what role do Accountants play?
Well, in a nutshell, understanding both, and where they fit into your organisation, can give real competitive advantage and make the difference between success and failure. Used correctly, business intelligence and analytics enhance effective decision making, and increase the efficiencies of the organisation, from an internal and external perspective.
The difference between ‘Business Intelligence’ and ‘Business Analytics’ is that the former term is used primarily to describe the ‘tools’ used to extract the data from a range of databases into a central location, and the latter describes the output of this process.
With this in mind, we can clearly see that in order to use Business Intelligence to the maximum effect in our organisation, the output required (i.e. business analytics) needs to clearly defined first. In other words, what do we want from implementing this process? What are the areas within our organisation that are causing problems and need improvement? It is important that there is a clear business case and road map for action determined before commencement.
And this is where the Accountant can add real value to the organisation!
With their understanding of ‘reading the figures’ and extracting and measuring Key Performance Indicators within the business, this skill is paramount to the successful implementation of a Business Intelligence strategy within any organisation.
The most important role that the Accountant plays in the B.I. strategy is that of providing the critical analytics required to assist the decision makers within the organisation. In short, an effective B.I. strategy can change the game plan in an organisation by giving real insights into the ‘health’ of each area.
With this in mind, it is clear that the analytics must be appropriate to the organisation and should clearly identify and quantify the issues and challenges facing the organisation.
The following areas should be considered when implementing a B.I. strategy;
- Decide on the outcome required from implementing such a strategy.
- What are the expectations? How can they be achieved? And most importantly, are they tied to the ‘vision’ and business plan of the organisation?
- Examine the company’s structure and note the requirements at each level. The use of KPIs will assist in this step.
- Get management ‘buy in’. It is important that there is support from the top level, as the success of the strategy depends on them trusting the resulting analytics in the decision making process.
- Assess whether a portfolio of Business Intelligence tools is required, or if a single package is more appropriate. This will be determined by the nature of business of the organisation, its size and the analytical requirement. Access free trials where available.
- Once the appropriate B.I. tools are in place, it is important to understand what analytics are in play, and how they are being arrived at. Once this is understood, they can be used strategically.
- Finally, the analytics can be presented to the organisation management/stakeholders with fact-based data upon which, informed decisions can be made. Measurements of the impact of these decisions can be reported on with ease on a regular basis with the use of B.I. tools in place.
It is clear that the role of accountants in organisations is changing as a result of the advent of B.I.. They are now required at the Board table, as key players in strategic decision making processes, and are no longer at the side lines as spectators.Brenda Jordan
CGMA ACMA BBS