Are you frustrated because you have to wait until after the financial month end close to obtain any information about your company or departments operating results? This happens in too many companies today! In my last post, The Real Value of Information Technology, I reviewed the 4 critical areas to create value in Information Technology. The first was real time information for better decision making.
Jack Welch retired Chairman of General Electric said ’An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.’
So how can you as an executives learn fast and translate that learning into action rapidly?
First, you need to have critical information at your fingertips in real-time. So what is critical information commonly known as KPI’s (Key Performance Indicators). Every company is different, however, KPI’s are generally financial or statistical values or percentages/ratios that indicate to you when critical operations are moving in the right direction. You know what your KPI’s are and once those are defined then we can define what is required provide them instaneously.
Information Technology is critical to obtaining KPI’s on a real time basis.
1. Use technology to load data at it’s origin. This can include mobile devices and/or internet to process sales in the field, receive products and inventory, load information from vendors, transfer data from manufacturing equipment or monitoring equipment, load agriculture data, etc. It can also include direct file transfer from customers, vendors and partners. This data is generally then loaded into an ERP system and optionally into a Business Intelligence system.
2. ERP systems today process data from sub-modules (sales, manufacturing, purchasing, AP etc.) directly into the general ledger and/or job cost system on a real time basis. An ERP system is a key component to process data and prepare/present information instantly. Processing data instantly is one of the key reasons to upgrade an old ERP system to a new system.
3. A final puzzle piece in the technical stream to provide instantaneous information is the Business Intelligence system. These systems provide functionality to dynamically process data into information and present it in numerical, graphical or text format into MS Office products and/or feed directly to mobile devices or web-based applications. Data can be displayed in numerical or graphical formats and you can drill to detail transactions. Business Intelligence systems and mobile devices are the key components in transforming data into information immediately that enables you to learn, make decisions and act rapidly to make corrections. As Jack Welch indicated this provides a distinct competitive advantage and the value of the technology used is invaluable!
For more information on how to define KPI’s and implement a fully integrated Business Intelligence system contact LJR Consulting Services at 818-709-6583 or firstname.lastname@example.org.