Why business intelligence has a place in your practice
Now more than ever before, practices are looking to technology not just to increase profitability, but also to generate resilience in the wake of what has been a disruptive year. What we’re seeing is that this future-driven mentality is driving an increased interest in technology such as business intelligence tools, and what it can do not just for practices, but for their clients. Innovation fuelled by disruption has also been identified as a trend by industry experts.
In its latest IT spending forecast released in early April 2021, Gartner said that global information technology spending will grow 8.4% to $4.1 trillion in 2021, driven in part by enterprises accelerating their digital transformation plans. It encapsulates how often practices are turning to solutions such as business intelligence, as well as cloud-based visual reporting, and more flexible KPI building functionality.
Using business intelligence tools, they can analyse areas of potential profitability, assess cash reserves, manage chargeable and non-chargeable timesheets, forecast cashflow, and overall, improve practice management.
The importance of business intelligence
As the pandemic hit, practices realised how valuable timely information is, and how integral it is to be able to drill down into their data and to see near real-time, business-critical metrics.
It’s no longer enough just to see net and gross profit. Practices now want to be able to see visual insight from their data such as WIP progress by employee, monthly billing processes, and other metrics such as client referrals and website referrals. It’s all valuable information that can be used to make business decisions and to inform future planning and forecasting, and it is why many practices are considering business intelligence tools.
Spreadsheets are often a mainstay in terms of organising and analysing data at many practices and there is nothing wrong with this, but as a mechanism, they simply can’t aggregate data from multiple sources into one place, and refresh it every hour without the need for manual intervention.
Many practices begin using business intelligence tools to increase transparency surrounding their own business activity. However, while most technologies serve to improve operation or client-facing processes, business intelligence tools do both.
Advisors gain greater control of their data and reduce the time between something going wrong in your database and their ability to act on it (hourly refresh versus monthly board packs). The tools also significantly increase the chances of a practice hitting its goals and being able to evolve and grow.
What if you could pull data from unrelated sources for your clients to analyse, organising it with visually compelling and interactive insight? Business intelligence tools can be used for clients to generate this data-driven insight and to construct a strategic plan.
Here’s an example: with a distributed workforce, you could pull a range of practice management-led insight around work in progress, debt and lockup across all clients, and be able to slice that information down to any dimension – office, partner, department. Having this type of information to hand can be crucial in terms of making timely decisions about actions to take with specific clients, or in the case of future planning, when forecasting may help to underpin major decisions.
With business intelligence tools, it’s possible to surface all timesheet information to see a visual breakdown of where all chargeable and non-chargeable time is being spent, down to assignment type. This gives the ability to see patterns of how work is being done in almost real-time, highlighting where improvements may be made.
We are seeing a rise in practices repurposing their traditional report builder roles into more modern business intelligence-focused roles. As business intelligence tools become a main stay for the accountancy profession, both small and large practices will be able to make more meaningful, data-driven decisions to help clients drive growth, while also increasing efficiency and productivity.