Your service customer-pay gross is down compared to budget and last year. Can you explain why? Is it a one-time thing or a trend? Just this store or the entire group? You could rummage around in your DMS and, assuming you can actually get the data you need, export and compile it into spreadsheets in order to analyze it for an explanation. Alternatively, you could defer to business intelligence (BI).
BI is a broad technical term that combines the collection, storage and analysis of data for the purpose of improving or optimizing business performance. BI is also a term that describes a system for decision support, which provides managers with the ability to make better, more insightful and actionable business decisions. Examples of BI include reporting, data querying, preparation, mining, visualization, performance metrics and benchmarking and statistical analysis.
BI empowers managers to make better decisions through the display of historical and current data, all within context. It enables users to set and monitor key performance benchmarks, thus enabling a business to run more efficiently and, ideally, more profitably. BI helps users to identify market trends to drive revenue or reduce costs.
How BI Works
Businesses need to gather insights and track performance against objectives. To achieve this, they gather the various datasets, analyze them and, based upon the results, decide upon the set of required actions.
For example, WardsAuto Top 100 dealer group, Warren Henry, uses a BI system to obtain a comprehensive view of its Florida stores. In doing so, management is able to track performance metrics and identify areas of opportunity. Having an enterprise and centralized BI platform enabled Warren Henry to combine all of their store data into a single view. As a result, store managers can identify departmental and store performance needs, while executive management can track if an individual store’s performance is above or below average and click in to see the stores that are driving that region’s performance or are underperforming. This leads to more opportunities for optimization along with better customer service.
In terms of technology, raw data is collected from the business’ daily operations. The data is processed and then stored in data warehouses. Once it’s stored, users can then access the data, starting the analysis process to answer business questions.
Business Intelligence and Business Analytics
Business analytics is a branch of BI. According to technology research firm, Gartner, “business analytics includes data mining, predictive analytics, applied analytics and statistics.” In short, organizations conduct business analytics as part of their larger business intelligence strategy.
Running business analytics is an iterative process, because when you answer a single question, chances are that it will result in follow-up questions. Many business intelligence software applications simplify the analytical process, making it easier for the user to understand, visualize and analyze their data without having to have the technical knowledge required to obtain and organize it from a database.
While BI can be presented in a variety of ways, including through Excel and automatically generated reports, data visualization is amongst the most preferred and powerful. We are visual beings and very perceptive of patterns and color differences. Visualizations, presented through dashboards, render the data more accessible and comprehensible. In fact, when visualizations are compiled in dashboards, they can help to illustrate patterns or tell stories which are otherwise not easy to discover if analyzing the data manually. Such accessibility also enables enterprise collaboration around the data, leading to greater business impact.
Traditional and Modern Business Intelligence
Historically, BI was driven by a company’s IT department, with most questions answered by business users requesting reports from IT. If there were follow-up questions, another request was generated for IT, causing further delay. Overall, this led to a slow and cumbersome reporting process, where managers could not make decisions based on current data.
The last two decades, however, a more modern BI method has evolved, which enables the business user to work with data directly through their BI platform, while IT manages administration processes such as security, access and data integrity. Modern and specialized BI platforms help organizations with every aspect of the analytics cycle, including initial DMS integration and data extraction, analysis and discovery through web and mobile applications. This means that IT can manage access to data, freeing managers to visually explore it and to collaborate around their insights.
BI software was the mainstay of medium to larger businesses with the dedicated technology departments and multimillion-dollar budgets for both setting up BI systems and maintaining them. With the evolution of BI and the emergence of smaller more nimble startups, which focus on getting data from your DMS, processing it and serving it in an easy to digest and actionable way, there’s really no reason why any dealership should be without in-house BI capabilities.