The first post in our series on enterprise resource planning (ERP) solutions and business intelligence (BI) focused on freeing data analysts from spreadsheets. The second post looked at how BI leverages KPIs. These topics are two examples of the same theme: Better information creates a positive impact on every aspect of the organization. BI gets the right information to the right people at the right time, regardless of which department those people work in. This allows for improved business decisions at every level and in every department, which positively impacts the organization as a whole. Now let’s see how this dynamic plays out with regard to marketing in particular.
A national automotive manufacturer, for example, might have extensive amounts of available data, but turning that data into actionable information can be problematic. Understanding which combinations of figures to look at is where BI comes in. By examining their business from a granular level, the auto executives can see where customers are buying their products at the state and even dealership level. This visibility paves the way for a more strategic marketing spend. If the manufacturer is running a national ad campaign for a specific model of truck but discovers that most of those vehicles sell in two states at a limited number of dealerships, they can recalibrate the marketing spend to target those specific locations.
Here again we see another example of the ability of BI to get the right information to the right people. In this instance, sales data becomes visible to marketing personnel, who can then make an improved business decision. Thus marketing, often labeled as a “cost center,” actually becomes a “profit center.” Armed with information about where to spend their advertising budget, the manufacturer’s marketing team can save money by placing regional instead of national ads, and in the process more effectively reach their key consumer base, ultimately resulting in higher revenues.
Human resources is another traditional “cost center” where BI drives profitability. HR might not be a revenue generator, but from a BI and analytics perspective it can become an effective tool in leveraging labor. When ERP first emerged, it largely focused on accounting, and companies saw immediate opportunities to reduce headcount among their finance departments. However, as ERP spread through the organization, it became more difficult to identify chances to make further staff reductions. Within the realm of HR, BI would allow a company to look at production levels compared to head counts throughout the enterprise, using metrics as a guide to see opportunities to revise staffing levels. Here again we see how BI empowers “cost centers” to drive profitability throughout the organization, and how improved business decisions within a specific department benefit the enterprise as a whole.
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