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Things to Consider When Selecting a Business Intelligence Solution

The first step in vendor selection is to decide upon a solution methodology: traditional or modern BI.

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Business Intelligence (BI) solutions help companies to analyze data, make insightful and informed decisions, improve business processes and drive results. With a combination of interactive dashboards and key performance indicators (KPIs), reporting, historical analysis and future forecasting, BI enables companies to obtain a 360-degree view of their financial performance and operating efficiency.

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Traditional or Modern?

The first step in vendor selection is to decide upon a solution methodology: traditional or modern BI. Traditional BI usually suits larger corporations and dealer groups with upwards of 75 rooftops because they require substantial internal technology teams and business analysts to implement and maintain them.

In contrast, modern BI provides user-friendly, intuitive and interactive tools, which enables almost anyone within the organization to meaningfully analyze data in real or near-real time. The tools can be delivered via the cloud and require virtually no internal IT resources. Modern BI better suits dealerships and dealer groups who want a nimble and fast data analytics environment without an army of IT staff.

Cloud (SAAS) or On Premise?

For larger dealer groups with substantial and capable IT resources, another key decision is whether to host your data locally or in the cloud. Local hosting entails high initial investment but offers greater flexibility and security for managing extremely large data sets. Cloud hosting offers lower total cost of ownership, faster implementation and easier scaling, while eliminating IT infrastructure and staffing requirements. For all but the larger dealer groups, BI vendors typically provide cloud hosting of your data as a part of their solution. The remainder of this article will focus on self-service SAAS BI solutions.

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User Base

Another key factor to consider is who within your dealership or group you want using the BI solution. Is it just the principals/GM/executive team or does it include your variable and fixed operations managers? Do you want your accounting team and salespeople, service advisors and parts counterpersons using the solution? Generally, the greater the utilization through the organization, the higher the transparency and potential for enterprise performance improvement because everybody is on the same page.

Software Features

Having identified your intended user base, it’s important to identify the features that are important to your dealership or group. A recommended approach is to elect a BI solution that fulfills your current requirements but leaves room for future growth. Some of the features available today include configurable dashboards with KPIs; full data integration with DMS and third-party workflow products; coverage of accounting, sales, F&I, service, parts and collision departments; financial and operational reporting and analytics; budgeting and forecasting; and more.

More advanced features might include AI, machine learning and predictive analytics. If features based around these are important to you, it’s critical you understand that these are effectively “black boxes” and any actionable intelligence provided is only as good as the data science and algorithms contained therein. Therefore, it’s imperative that you rigorously test the output before acting upon it within your organization. Most importantly, you should ask if a vendor is able to provide a comprehensive view of your organization’s data in real or near-real time.

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Vendor Insights

You know the old adage of the dealership GM asking the sales manager “how much money did you really make on this car?” The sales manager looks at the F&I numbers and responds accordingly. Several months later, after all accounting and deal adjustments are in, the actual number is thousands of dollars lower. An ideal BI solution would enable the sales manager to provide the right number in the first place because the vendor understands how to combine financial and operational data along with your business processes and unique accounting methodologies.

Technology 

Technology is a key factor in evaluating a BI solution. Seamless integration with your DMS, data-refresh frequencies, cloud-hosting and data security are all factors you should consider. Additionally, if you plan to use your BI solution for any rigorous financial analysis or reporting, SOC 1 and SOC 2 are valuable assets.

Implementation

Estimating the time and effort required to go live is difficult, but you should take the time to understand a vendor’s process. For example, once the vendor has acquired your DMS data, what resources are required on your side to explain your accounts and processes for the vendor to be able to map them to the vendor’s application? What steps does the vendor take to ensure your data is accurate? 

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Training and Ease of Use

In any retailing environment, time away from retailing results in lost sales (executives and supporting staff notwithstanding). In automotive retail, especially, where managers are often both salespeople and analysts, the more intuitive a BI solution, the less time required to train users, the better the solution and the more value you will derive because users will actually use it. That said, you should understand how a vendor will provide initial training and ongoing training for new features and in the least disruptive way.

Vendor Product Roadmap / Future Innovation

Is BI your vendor’s core product? Is it a best-in class solution? Does the vendor have a defined roadmap for how the product will evolve in terms of features and functionality and incorporate future technologies such as AI and predictive analytics? Does the vendor foresee open integration with some of your other workflow products and data streams or will it be confined to the vendor’s own ecosystem? You invest money, substantial time and effort in implementing an enterprise BI solution. It should be future-proof.

Click here to view more solutions from Farra Majid and Dealer Intelligence.

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