The current economic situation, caused by the coronavirus epidemic, is forcing rapid changes for doing business across virtually every industry. Both business owners and entrepreneurs are currently focusing on strict cost control and looking for space to generate additional revenues.
In these difficult circumstances, advanced analytical tools – specifically business intelligence systems – can help. Thanks to their extensive data presentation layers, tools such as Microsoft Power BI can be particularly useful at times when we want (or need) to easily gain access to knowledge on the current state of the company and better respond to changes; something that is incredibly useful in times of high market fluctuation. Analyzing changes in shopping behavior over time, or event notification functions, for example, are greatly helpful.
What will you learn through the analysis of sales trends?
Sudden changes in the market can lead to changes in customer purchasing patterns. Goods that have sold well so far do not necessarily have to follow the same trend yet, on the other hand, goods that had low customer interest can now achieve much better results. Such situations can force companies to temporary change their approach to target customer groups and change the style in which we stock our warehouses.
Here, reports that help you keep track of product group sales, particularly in comparison to the previous week, month or year – or even the same period last year – can provide essential insights. Thanks to such comparisons, we’re able to quickly identify a product or category of goods with an observable and significant increase or decrease in popularity. What’s more, we can verify whether this is the result of the current situation, which is rather exceptional, or if it’s a trend that can be identified every year or month.
The tracking and measuring of these changes allow you to quickly detect the phenomena described above without having to delve into each product individually.
Is it worth measuring the effectiveness of distribution channels?
In addition to opening new physical outlets, an e-commerce platform is a good way to increase your reach (in fact, the current crisis has shown the latter to be a necessity when the former isn’t an option).
E-commerce allows you to reach customers who are not able to visit one of your specific locations. It also enables you to supplement your existing offer, as you are not limited by the storage capacity of each individual sales outlet.
The effectiveness of direct sales and e-commerce activity can be compared by analyzing the relationship between them. We can track changes in sale values over time and adapt the business model by moving sales of given products (or their respective segments) to physical or online stores, based on where the best revenue opportunities have been noted.
How to optimize maintenance costs thanks to what-if simulations
For service companies, its typically worth monitoring the profitability of their various branches. While the industry determines the times when the premises (and thus the service) are open and available to customers, other external factors force additional changes – traffic, for example, can influence the number of employees required to handle increasing or decreasing orders.
In each industry, there are also certain fixed costs that are incurred, regardless of the volume of goods or services sold. Rent and maintenance cost are perfect examples. However, this type of information is often scattered across various registers and accounting systems, making it difficult to accurately estimate each location’s profitability.
Fortunately, Power BI is great for solving this, as it can analyze these types of cases through easy-to-use visualizations that are automatically refreshed, utilizing current data from various sources. In other words, we can get the clear, complete and conclusive view of each location, with all cost-associated factors.
Based on this data, we can prepare a report that illustrates the hours of transactions and their value. Then, we can compare them with the revenue acquired in given days or hours, analyzing the level of profitability. Based on this sample analysis, we can decide whether it’s profitable to accept orders at given times. Since some costs are occurred anyway (such as rent) but others will be diminished if we don’t operate at that time (for example, utility costs, staff salaries etc), we can determine the most fiscally beneficial course of action.
Further to this, we can also conduct an analysis to project how the company’s financial results will change if we alter the parameters that we can influence, such as the number of employees or working hours.
Receive notifications of critical events.
In order to react to changes faster, Power BI can automatically notify users when a certain critical value is detected in the data. This could be a decrease in revenues below costs or an excessively low percentage margin on products. By integrating Power BI with the Power Automate service, we’re able to define business events that can be a trigger for further warning actions.
Alerts sent as a result of such events can contain information about the respective indicator that has been exceeded, as well as a direct link to the Power BI service element in which it was located. This allows you to immediately look at and analyze this undesirable situation – so you can immediately start preventative measures.
Business Intelligence systems make it easier to draw conclusions from the data generated as a result of the multitude of business events occurring in the company. One of the biggest advantages is the ability to collate data that comes from a variety of specialized sources. This enables you to see phenomena that, if analyzed separately, may have gone unnoticed and, thus, you can discover new sales opportunities or sources of unnecessary costs.
Each year, organization data becomes an increasingly valuable resource – often referred to as the “new oil” for business – and their proper collection, analysis and use are now key to staying on the market and increasing competitiveness.