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Business Intelligence Made Easy

Business intelligence is about effective business management by the use of Key Performance Indicators (KPI’s) or numbers .

Too often people focus on Profit and Loss and not more on different KPI’s.

A P & L shows the outcomes of work performed in a company . It’s the result of all tasks carried out it that it earns income from . But why wait for all tasks to be completed before making management decisions about the business ? That seems too much like shutting the gate after the horse has bolted.

A P & L also shows the averages of work performed – i.e the average profit made on all products or services delivered . The Parado Principle states 20% of gross sales generate 80% of the profit . So this principle means the P & L isn’t helping with us everything we need to have for proper company improvement .

Think of a company as being like a 3 legged table. For it to be level on top it needs to have equal length legs. A company is the same .

A business’s 3 legs (for service and manufacturing businesses) are: new sales $, work produced $ and banked $. All 3 figures need to almost balance every week or month for the business to be stable or at least managed better .

If a company generates more sales than its production capacity and does this 4 weeks in sequence it has a problem with not enough production ability . If a company generates less sales its production capacity , it can have a problem with not enough production for the staff . And if a business doesn’t consistently deposit cash what it produces then it can run into cash flow issues .

All 3 legs needs to be managed for business management . Just focusing on the P & L or finances doesn’t actually help. That’s NOT business intelligence.

Business management comes about through business intelligence, which leads to large and small business development.

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