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Written by: Philip Baratz, president of Angus Energy

As seen in Oil and Energy Magazine

So you’ve decided to step into the great unknown that is Business Intelligence (BI) software … what now? What exactly are you going to get out of this thing? How hands-on do you have to be with it? Do you simply sit back and let the software work its magic? And then what?

These are just some of the questions that might occur to business owners when deploying a BI platform. Making the decision to do so is a huge first step. The single most important BI strategy for dealers at this time is to have one Acknowledging that data, once it is made visible and can be segmented, could offer significant and valuable insight into an organization’s current and future performance, the limits of which have yet to be fully defined in our industry but capabilities of which are well beyond our current thinking.

If deploying BI requires a leap of faith, taking full advantage of it requires the opposite — careful planning and a firm understanding of mistakes and misconceptions that are to be avoided along the way.

 

1: Misconception: “The perception that BI is simply an extension of current reporting functionality.”

What good is data that isn’t put to action? It’s good for nothing. Data is simply data until organized for a particular purpose. Although more and more energy industry insiders are becoming comfortable with the basic definition of BI as a tool for data collection, reporting, and analysis, many are still unwilling to go from point A to point C.

Often overlooked is the overall objective of any BI project, the need for continuous improvement, which can only be achieved through first recognizing poor performance and then taking the necessary corrective action. In other words, data analysis won’t do much good if a business owner isn’t willing to face the facts about an under-performing product, service or employee in the first place.

Appreciate the fact that your staff, your business processes, and your other employed technologies all play a significant role in achieving successful business performance management.

 

2: Mistake: “Underestimating the time, cost and contribution of financial and industry knowledge that is necessary in order to produce a solution that will measurably make an impact on improving company performance, short- and long-term.”

In other words, the answer to the question posed earlier about whether one can simply sit back and let the software work its magic is a resounding “No.” Deciding to deploy BI software is not a decision that can be made overnight, nor is BI a magic bean that will provide overnight growth.

Successful petroleum companies look to BI as yet another technology that must be adopted in order to remain efficient and competitive, not so different as the maturing technologies we have witnessed come on to the scene over the years, such as routing software, onboard computers, GPS and tank monitors, now commonplace in our industry. As with any software solution, consideration must be given to its design, development, implementation and ongoing support/changes, along with the careful selection of technology necessary, positioning you for whatever lies ahead.

Many BI solutions are proprietary systems developed by third-party providers. With this in mind, a business owner might simply decide to go straight to the software developers and work with them directly to build a BI solution. This, however, takes a great deal of time, money and knowledge.

The technology chosen for BRITE along with its content has been designed specifically for the petroleum distribution and service industries, with the overall theme of minimizing risk and improving the predictability of your business while at the same time, increasing the value of your company via continued improvements. This helps streamline deployment and implementation, as BRITE is designed to be intuitive and to interface with most existing back-office solutions.

 

3: Mistake: “Believing that important performance information belongs only at the executive level.”

A business owner who hogs performance reports from his managers is akin to one who keeps leads from his salespeople; it goes against what Baratz sees as one of the core missions of BI, getting the right information in the hands of the right people at exactly the right time.

Aligning your staff with the strategic goals of the company is foundational to the adoption and deployment of any business intelligence solution. Micromanaging executives might have trouble putting this degree of trust in their subordinates, but such transparency is key to the success of BI, as managers need to know what they’re striving toward and how their teams are doing in that regard.

Restricting this well-purposed, timely and accurate information to only the executive team conflicts with any company’s accelerated progression toward a very attainable culture of informed decision-making at every level of the organization, wherein all departments are responsible and accountable for their actions or lack thereof.

 

4: Misconception: “Everyone in your organization knows and understands how their performance is measured, why these particular measurements are used, and how much their individual efforts contribute to the success of the company in meeting its goals.”

Put simply, they don’t know — not exactly. Furthermore, even if they do have a general idea about how their performance is measured, those standards of measurement might be faulty. BI software can expose these faults, but once again, users must be willing to see things differently.

Inherently, most dealers have a gut feeling, nurtured by experience, for what may seem right and wrong when evaluating operational activity. However, too often the level of measurement is too high and the non-performing transactions masked below the gross averages we have all been taught to watch.

It might seem logical to hold every department to the same standards, but BI allows businesses to go much deeper, to continuously reevaluate performance metrics and raise or lower the bar accordingly. Does everyone in your organization share the same gut feelings regarding performance in every area of the company? Are they tasked and accountable for achieving standards dictated by management daily? There is a reason why certain measurements matter — because they translate to increases in revenue and reductions in cost, both of which are consequential to the profitability of the company.

 

5: Misconception: BI is an altogether foreign language.

Perhaps there is a greater mystique surrounding BI than there should be. After all, whether taking notes on a phone call or budgeting for holiday shopping, most of us already practice some form of data collection and analysis on a regular basis.

For an analogy, Baratz points to a software tool just about every office professional has opened up at least once or twice, Microsoft Excel. If you find people in your company using tedious and manually intensive Excel spreadsheets, you will discover that most are using this tool to simply gather and present data that is important for them to manage.

Why use Excel? Probably because they could not gather the data via standard means provided by supporting systems, or perhaps access to the necessary data was outside their technical capabilities. Interesting … gather data, present it in a purposed format, and then publish/distribute for consumption. Sound familiar?

Indeed, these are all primary functions of BI software! A very basic concept of BI has already been adopted in our industry for some time now. The tempo and consequences of decision making today demand access to actionable information, with speed and accuracy. It’s time to formalize BI as a strategic technology that will guarantee greater visibility on those things that matter, resulting in more predictable results in the changing landscape ahead.

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