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There's gold in that data!

Intelligence is defined as aptitude or cleverness or astuteness. Business Intelligence refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information and also sometimes to the information itself. The purpose of business intelligence is to support better business decision-making. *

How do you know you are making money on the services you offer? How do you know what customers are your best customers? Does your business operate on the 80-20 rule? What is the 80-20 rule anyway? To find out the real truth regarding your business health you need to use some sort of Business Intelligence (BI).

BI can do amazing things for you. One of the key aspects of BI is that it allows you, the business manager to spot things that are happening in your business very quickly and affords you the option to do something about what is happening. One of the ways BI helps you better manage your business is that the information is most often presented in a graphical form. In other words, you can see how your business is doing by looking at things like pie charts, bar charts and trend graphs.

Are your sales up or down from last quarter? Are you making more or less margin? Who is the best customer based on margin? Who is the worst customer based on number of smaller orders? You can try to keep your finger on the pulse of your business by looking at a bunch of reports, or heaven forbid, manually going through a pile of waybills! But there is a better way. Let's take a look at what we mean here.

The chart below has some interesting data in it. A quick glance indicates that our "best customer" is Dist. Int. right?

Customer Margin Amount
ABC Co. $20 $100
Lawyers R Us $40 $200
Penn Financial $30 $150
Acme $105 $300
Sears $175 $876
Dist. Int. $100 $1000

Wrong! The customer who is generating the best return on our investment of time and trouble is Sears. Take a look at the following bar chart and you can see immediately who is putting the most cash in our bank account. And not only that, we are getting more cash with less revenue, yes that's right, better margin business!

Maybe we should seriously consider asking ABC Co. to ether give us more business or find a nice way of saying thanks but no thanks. Each order we process must drive a minimum of margin and although we can?t see the percent from the bar chart above, take a look at the same data presented in a slightly different format below.

Oops! Maybe it is Dist. Int. we should be taking a closer look at. Sure ABC Co. is not our revenue leader, but it looks like Dist. Int. may well be a customer we need to raise our prices with. Even though Dist. Int. is the leader in terms of revenue, in terms of margin percent ? an important metric ? they are only driving a 10 percent margin. It would be a shame if we had a driver on a call for Dist. Int. when Acme called and we could not service Acme!

A good system will collect all kinds of data. An excellent system will take all that data and make it meaningful for the business manager. Contact us for more information here.

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