Help Your Business Become More Intelligent
What really is business intelligence? Aside from being a big buzzword in business today, what does it really mean? If you look up the definition, it is really broad – the ability to analyze information to improve decision making in your business. That means that almost any data you get on your business, as long as it is used to help you make business decisions, could be business intelligence, right? Not really. The word “improve,” or even better “optimize,” comes into play. The most important aspects of business intelligence are how easy it is to get that information and the timing/delivery of that information.
Your financial statement is an example of business intelligence that should be relatively easy to obtain. It contains information that you could and should use to make better decisions for your business. How profitable were your departments last month vs last year, or vs your budget? What is driving your profitability? Where did you spend too much? Where are your margins high or as expected and where are they too low? Your financial statement can also tell you where you stand on working capital. Working capital, or current ratio, tells you whether you have enough short-term assets to pay off short-term liabilities. In other words, are you managing your cash flow to ensure you can pay your bills on an ongoing basis?
For too many dealers, it is a struggle getting reliable information from your accounting system. I would submit that if you have the right system (shameless Lightspeed plug), and you invest in the right people, having reliable numbers should be a given. If you don’t have financial statements you can rely on, you really are flying blind, and you can’t afford to do that in this competitive environment.
The problem with relying solely on the financial statement only is that it usually is information that occurred in the past, or what is referred to as a lagging indicator. By the time you close the month and recognize an issue, it is too late to resolve it. It can still help you make changes now so you can avoid problems in the future, but that’s about as good as it gets. What makes information even more intelligent, or more useful in making decisions, is the timeliness of the information. If you can easily see how you are doing today, or even better, how you are going to do tomorrow based on the data you can see today, now you’re talking about data that really makes a difference!
Lightspeed dealers can use the DOC report (Daily Operating Control), to see with a click of a button how many parts invoices, repair orders, or sales deals were cashiered in a given day, what the gross revenue is, and the gross profit. Away from the dealership? No problem! You can view this data on your mobile device by month and year.
Want to drill in on parts? The Parts Invoice Analysis allows you to see with a click of a button how each salesperson in parts is doing, including average invoice $, line items per invoice, average discount, and margin %. Are they in line with what you expect? Do you need to make an adjustment or talk to an individual about why they are low? What is your top salesperson doing to increase the # of lines per invoice and how can you get others to do the same? This same report will show you who your top customers are this month, which hours or day of the week is busiest, and where your parts business is coming from.
These are just two simple reports of the many canned and custom reports available. How can you use this intelligence to optimize your operation? It can be a bit overwhelming to think about all of the information you can get from your business and what you can do with it. To help, we have added roles to our standard custom reports to help you discern which reports should be run by whom, based on industry best practices. So use the vast amount of information available at your fingertips to make intelligent business decisions. After all, it is what you can do with the information that really makes it intelligent.
Stay tuned for my next blog on how you can take this business intelligence to the next level.