Over the past 12 months, we have spoken with many retail businesses which have started to embark on a business intelligence project to collect and analyse data about their business. This can be slightly frustrating as in many cases the CounterBooks system can already provide the information they require without any special customisation.
Now this could be down to our limited marketing expertise, or maybe the recognition of the need to analyse the performance of their business in new ways has not resonated with the retailer, however we felt it was an ideal opportunity to share our thoughts about business intelligence.
So what is business intelligence?
“Business intelligence (BI) mainly refers to computer-based techniques used in identifying, extracting, and analyzing business data, such as sales revenue by product and/or department, or by associated costs and incomes”
In essence, it allows the management team to be more aware of the business’s performance and take the necessary action. However many BI tools and projects we have come across only analyse data from a point of sale (POS) or back office system (BOS) focusing on sales performance and, maybe gross profit, which is the main concern for many of the intended stakeholders. However this does not address the full spectrum of the Profit and Loss and does not take into account the Balance Sheet implications that increasing or declining sales can put on the financial position of the business.
So what are we suggesting? Well firstly, we are not dismissing the value of general purpose business intelligence tools, they are powerful tools but we think they should not be seen as the total solution, there is a subset of business intelligence called “accounting intelligence” which goes deeper and provides a wider view of business performance. Accounting intelligence (AI) is the general name for the set of technologies used to extract, analyse and present information from accounting and ERP applications such as JD Edwards, Oracle E-Business Suite or SAP. In Accounting Intelligence there is no need for a data warehouse, the data is extracted directly from the ERP at the time that a query is run.
CounterBooks is an online retail accounting system using a SQL server database, which allows us to extract data and present it in many different formats. Where business intelligence systems analysing POS/BOS data may tell the user that certain product lines have increasing sales, although interesting, this may not be very important if your landlord has increased the rent by 10%, electricity cost are up 15%, and the overall profit from the business has fallen to almost zero. With the accountancy intelligence reports available in CounterBooks you can review the overall performance and value of your business as well as monitoring sales trends. So maybe we do have a solution, and maybe we are just not good at communicating the benefits to the users.