Business Intelligence for Small Business – Scorecards

If you have read my last two posts and are interested in applying BI to your business, how do you get started? 

I would be begin by deciding what success look like for your business, and this should be a balanced view taking in such factors as:

• Finance. Obviously no business can survive without making a profit, even charities can be considered profitable except that their revenue is applied to those targeted by the charity.  Other finance measures also need to be tracked such as cost of sale, turnover, amount owed amount owing etc.
• Growth.   Most business are designed to grow and I would measure this in terms of new customers, customer churn.
• People.   The most important asset to most companies is its people, but it it is very hard to  measure staff morale.  Indicators might be staff retention, 360 degree evidence from junior staff about management, and training days undertaken.
• Innovation. This might be nothing more than the ratio of your turnover spent on research and development.
• Social Responsibility.   Your impact on the community should be important to you and this will include things like equality and diversity, environmental impact, charity work and so on.

The above is not an exhaustive list, just your starter for ten, I am no strategy consultant. Anyway moving on, for each area above you come up with you need to be able to do the following:

• Find 2-4 ways to measure it.
• Understand the factors that you will want to analyse the measure by.  For example turnover could be measured by product, by sales channel (internet, mail order, reseller), by Time (say fiscal week).
• Create a metric based on the target you want to achieve e.g. increase turnover by 15% maintain profit margin at 12% and so on.

These metrics would then be combined to form a scorecard- a one page overview divided into 4–6 headings like those above each with a set of metrics underneath.  This then provides the big picture on how your business is doing.  Having established that you then need a set of analytical tools to help you discover what is happening behind these metrics when things don’t go according to plan. and that will be next post.

Technorati Tags: BI,Business Intelligence,Small business,scorecards

Comments

• Anonymous
  September 09, 2008
  For those who do not follow Andrew Fryer's blog, it is worth checking out his posts on Business Intelligence

• Anonymous
  September 11, 2008
  Andrew, BI for one's own business need not be complicated but targets and scores need to be kept. Here are a few of my suggestions: Finance  Cash flow, without it you are dead. Growth   Sales must grow and new customer numbers increase People   Happy people stay, watch your exits. Innovation   Are your product lines or services increasing? Social Responsibility   Letters of thanks and mentions in the local newspaper. Business survival is based on more coming in than going out!

• Anonymous
  July 23, 2009
  Hi Andrew, Excellent post! I think there is a lot about BI that Small Business could be using. It just a matter of letting them know they could do it. Of course, nobody can do it all in only one blog post. That's what makes your post even more important. It shows us that it is possible to talk about BI for Small Business in small posts in an understandable way. Congratulations for that. Claudiomar