Can Business Intelligence Really Save Companies Money?

Just today I was talking with a potential customer. He mentioned that he was looking for a way to lower his company's expenses. I suggested that he spend money on a Business Intelligence system. I thought to myself, "How ridiculous that must sound to him". How can spending money help his company save money? It dawned on me that I need to write a blog post on this subject. I figure this is a perfect forum topic to discuss and see what everyone thought.

I strongly believe that spending money on the right IT solution can save companies thousands if not millions of dollars. How does an IT manager know what is the right solution and when the solution is necessary? How does spending money on Business Intelligence (BI) help control cost?

Business Intelligence can allow a executive to closely monitor the company's operations. If he/she has the right reports they can pick and choose the appropriate areas to trim and expand. This is usually done by first taking a benchmark of the performance. The benchmark is an important factor in measuring BI success. This posting I will be as general as possible. I will have follow up postings which will talk about industry specific solutions.

• Measure and monitor daily operations - ex: Supply chain efficiency
  
• Monitor internal and external cost spending - ex: Travel expenses and consulting cost
  
• Monitor inventory warehousing cost. - ex: Product Turn Ratios
  
• HR expenses - ex: Employee benefits reporting and accident incident tracking
  
• Measure and track sales effectiveness - ex: Sales conversions vs. expenses
  
• Monitor the ROI of advertising campaigns. i.e. Cost Per Conversion

As you can see, there are a world of possibilities to make a difference. In many cases, managers and executives must make the hard decisions of investing and cutting back in order to affect the margins.

Summary:

Based on my arguments above. I hope you feel similar. I think that the BI solutions themselves won't save the company money. However, by effectively using them to make key decisions can positivity affect the company's bottom line.

If you are interested in talking more how Business Intelligence can help your company please feel free to contact me.

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