Five Ways to Advance Your Small Business Using Business Intelligence
If you don’t know everything you would like to know about how to grow your small business — who are your best customers, what is your most profitable product or service, what’s the best location for your business — you need business intelligence (BI). “The businesses that aren’t obtaining this kind of information are operating below the curve,” says BI researcher Ginny Miori, Ph.D. “Business intelligence provides small businesses with tools to standardize data, reduce costs and identify new opportunities to improve efficiency.” And the good news, according to Miori, is that business intelligence doesn’t have to be expensive to be effective.
She suggests five ways to advance your small business using BI.
1. IT Infrastructure. How does your business gather information, what network are your computers connected to, is everyone using the same system? Consistency in technology is of critical importance according to Miori. “In the supply chain, the information always follows the product,” she says. “Small businesses are successful when there are little to no kinks in the IT infrastructure so information follows an efficient path between all concerned parties.” This is particularly important to maintain customer satisfaction, she adds.
2. Data Mining. The intent behind data mining is to approach the task without preconceived ideas. By examining the data collected, small business owners will better understand their labor force and customers. “Many small businesses aren’t in the financial position to hire a market research firm, but that doesn’t mean you can’t get your hands on relevant data,” says Miori. “In addition to sales and inventory data your organization may collect, there is a surprising amount of free data available through the government.” She recommends the U.S. Census Bureau and the U.S. Department of Labor Statistics as credible sources for data collection.
3. Forecasting. This uses the information from data mining and applies specific techniques to predict future growth. Generally, people predict sales and make staffing decisions based on this information. Forecasting is the cornerstone of business according to Miori. “It’s important to get it right the first time or small business owners carry a huge risk,” she explains. “Forecasting helps you to build your business to meet customer demand and better manage future growth.”
4. Six Sigma of Operations. This is about using materials efficiently. It can be as simple as re-arranging the layout of a store so employees can get from point A to point B in the shortest amount of walking. Or, it can mean stocking your warehouses in a way where your most popular products are positioned closest to the shipping facility. “No task is too small for an efficiency makeover,” according to Miori. “Once your business grows, even the smallest inefficiencies can become costly in both time and money.”
5. Decision Making. Small business owners make decisions everyday. Strategic decisions, those that significantly impact business, are made less often. Miori advises small business owners to make these decisions based on the trends and behaviors identified through data mining and forecasting. “This is what BI is all about,” says Miori. “Smart companies employ business intelligence to gain a better understanding of their operations, so they can make strategic decisions that advance their business and sustain future growth.”