We've often heard our clients say that one good business decision paid for all
their work with our firm. Analysis is frequently what delivers that one good decision.
In our experience the big difference between
Analysis and Reporting is interactivity. When you do Analysis you interact with
the data and ask a succession of questions in rapid order. This rapid movement
through a series of questions and investigation is not something that can be tightly
defined up front. Looking at information generates more questions which yields more information... We call this the
Analysis Spiral.
This highly iterative process demands a
technology that can yield quick response and
interactivity. We recommend an Online Analytical Processing (OLAP)
technology such as IBM Cognos PowerPlay or Microsoft SQL Server Analysis Services. Analysis also demands
an integrated perspective on the data.
Most organizations have already made all the good decisions that can be made
from siloed data. They've analyzed their sales process based on Customer
Relationship Management (CRM) data. They've driven down their cost of
procurement by analyzing their purchasing and payables data. So doing this kind
of analysis is now a given and not a competitive differentiator. It won't make
you stand out against the competition.
The opportunities come from integrated data.
Many years ago we worked with a company that produced over a thousand
permutations of their base product.
They'd started as a process manufacturing
firm making a commodity product and over time had sensed many opportunities to
eliminate the competition by producing a special variation of their product.
Since they could charge more for these variations due to lack of competition
there was a consensus that this was very profitable but several people had
doubts. We worked with this company to use some Activity Based Costing (ABC)
techniques as well as data integration to get a true picture of the total cost
of making these product permutations.
It turned out that only about one hundred of the thousand permutations were
actually profitable and these varied widely in their level of profitibility. But once they knew this they
were able to increase the sales of the profitable products and make strategic decisions about whether or
not to keep the unprofitable products.