Wednesday, May 26, 2010

The Importance of Business Intelligence

Business Intelligence (BI) is a broad category of applications and technologies for gathering, storing, analyzing, and providing access to data to help executives and end users make better business decisions. It refers to the logical analysis of business information to drive business action. By using financial and non-financial metrics to assess the present state of a business, you are better equipped to decide upon an acceptable course of action.

Some of the key terminologies and tools related to BI fall under the category of Key Performance Indicators (KPI). This term describes the financial and non-financial metrics used to help an organization define and measure progress toward organizational goals.

Understanding which KPI’s are appropriate to monitor can be different for each organization but when carefully selected and monitored, KPI’s can be a valuable resource for your business.

Event Triggers and Alerts are in essence “Super” exception reporting. The benefit of alerts and triggers is real-time or near-real-time notification, enabling managers to take immediate action as necessary.

Alerts are a notification generated only when specific, pre-defined conditions are met. This could be when a customer accounts receivable exceeds a specific amount or is past due, number of days in inventory exceeds predefined targets, cash balances are below minimum levels or when internal control procedures have been violated.

Event Triggers are actions that are taken when a specified event occurs such as automatic notification to a customer that an order has shipped or automatic notification to internal audit staff that transactions meeting specific criteria have occurred.

For more information on Business Intelligence, click here.

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