How purpose-built BI tools can save time and money

by Chris Farkas

Business analysts get it right away. They see the obvious value of a custom business intelligence tool built specifically to help them make the decisions they need to make. With these purpose-built tools at their disposal, they are likely to realize an immediate time savings. And, even better, after being freed from the grind of monotonous report-building, they can apply their  newfound mental energy and spot something in the data they may not have seen otherwise.

“We filter out the noise for the analyst, giving them the signal they need to do their job without the distraction.

However, that time-savings and potential insight gain — along with the rationale for investing in the development of these tools — isn’t obvious to everyone. As I meet with clients and potential new clients, I talk a lot about the past work we’ve done — and how the tools we build have generated real ROI for our partners.

But recently, I was stumped by a question from an unexpectedly curious source. My oldest daughter asked me to explain why my “clients” paid me to do what we do. It forced me to rethink how I explain the value of our work. It wasn’t until later that day when I thought of something that might help her understand.

The classic word problem, without the noise

After I recently wrote about why most companies today need purpose-specific tools for their data, a couple of people in my network reached out to me and argued that a modern ERP could serve all the needs of business analysts – in addition to being the all-encompassing company “system of record.”

They weren’t wrong. When an ERP is the sole source of company data, it serves as the foundation for many purposes. But, I explained to them, an out-of-the-box ERP won’t satisfy the needs of analysts who are repeatedly trying to make decisions that the ERP isn’t designed to help with. For example, a product line manager might want to know, “How many products should I carry? How many sizes? How many colors?” That’s where the custom BI development that we do comes into play. We can build the tools that plug into an ERP or any type of company system of record.

We filter out the noise for the analyst, giving them the signal they need to do their jobs without the distraction.

Several hours after my daughter asked me why our clients pay us, I realized that two variations of a classic word problem might help illustrate this. Here are the word problems I gave her:

Example 1

Tabitha has 3 plums, and is walking to meet Annabelle when she bumps into Joe, who has 3 peaches. Annabelle and Joanie walk to meet Joe. Joanie has 3 apples and Annabelle has 8, and she bets Annabelle one apple that her apples are tastier. They each try both types of apples. Joanie loses the bet and gives Annabelle her last apple. Tabitha, meanwhile, bumps into her classmate Sadie, who loves plums. Sadie trades Tabitha her three plums in exchange for five apples. In a nearby orchard, Tom and his brother Adrian are picking apples. Tom picks 13 and Adrian pulls 8 off the tree – but they each accidentally drop 4 apples to the ground, making them inedible. Later on that night, they all meet at Tabitha’s house and decide to give 20% of their good apples to the food bank. How many did they give?

Example 2

Tabitha has 5 apples. Annabelle has 7. Tom has 9. Adrian has 4. They agree to give 20% of their apples to the food bank. How many did they give?

Hopefully, like my daughter did, you’ve realized that the above word problems involve some of the same math — and the answer, in both cases, is 5 apples. But in Example 1, there are a lot of additional people, fruits, and numbers, making it much more cumbersome to solve. Example 2 takes a lot less time to answer.

Now, analogous to Example 1, imagine one business analyst who logs into a complex ERP system loaded with data. She searches through layers of information, performing mental gymnastics to simply find the numbers she is looking for. And think about another analyst who has a purpose-built tool that automatically extracts only the information she needs — and in the format she needs to act on it immediately. Much time is saved. And without the noise, she still has the mental stamina to do more analysis and creatively solve some tricky business problems. Now imagine it’s your job to do this type of analysis dozens of times per week. Which analyst would you rather be?

That’s what we do here at eAlchemy. And that’s why companies can realize tremendous ROI from creating custom business intelligence tools for their analysts.

A purpose-built BI tool for all seasons

Putting metaphors aside, one project we completed for a Fortune 500 retailer highlights the value of purpose-built BI tools.

We created a markdown management tool designed specifically to help our client’s planning managers monitor, in near real-time, sales of seasonal apparel. For example, let’s take the bathing suit. Bathing suits hit stores (and online) en masse starting in April. Retailers want to sell-through thousands of units in inventory by early August. To do so, they need to constantly monitor and adjust pricing on the different items and sizes.

Our client’s goal is to sell through inventory at the highest price. And for items that don’t sell as expected, it’s important to the bottom line to quickly respond to poor sales. Decreasing the price on a slow-selling product early in the season is much better for the bottom line than waiting until later in the season — and having massive “close-out” discounts to clear out unwanted inventory.

Our client had many tools to help the executive team monitor sales, revenue, and margin. But none offered a good view for markdown decisions. Surfacing the specific data to help this analysis — in an optimal layout designed for this purpose — enabled the planning managers to quickly make critical pricing decisions. Maybe more importantly, it allowed team members to identify important trends and anomalies they wouldn’t have otherwise. The tool we created also saved 3-4 hours of time that it took each analyst to prepare similar reports. By alleviating that preparation burden, the team could run the analysis more quickly and more often.

Ultimately, this purpose-built business intelligence tool saved our client’s team a lot of time and was a boost to profits because of the improved margin it enabled.

More time and more money – now those are benefits that even my kids can understand.

Need to build some custom BI tools for your team?

If you’d like to learn about some more examples of custom BI tools we’ve developed — and how they’ve saved our clients time and money — email us and we’ll set up a time to talk.

Chris Farkas is founder and CEO of eAlchemy.