Technology: Using business intelligence

Related tags Business intelligence Cost

Mark Pitcher argues that web-based technology can give even the smallest operators access to valuable business information.The latest hot concept is...

Mark Pitcher argues that web-based technology can give even the smallest operators access to valuable business information.

The latest hot concept is "business intelligence" or BI. Put simply, this covers information and how it is used for the benefit of a company. This need is not confined to the realms of big business. It is relevant to every operator. The way a business manages its information, from stock control to the cost of wages, will ultimately define the difference between success and failure.

It has been proven that business intelligence from an effective stock management system, for example, can increase average gross profits by up to five per cent while an ineffective system can be costly, time-consuming and allow only for reactive management.

The good news is that - thanks to technological advances - previously expensive and high maintenance BI solutions are now accessible, cost-effective and extremely easy to use for even the smallest operators.

A typical business in the hospitality sector might have the following requirements in terms of systems and technology:

  • EPoS (Electronic Point-of-Sale)
  • Stock control and purchasing
  • Staff scheduling
  • Forecasting
  • Financial reporting
  • Accounting.

A large proportion of the industry's IT investment has been aimed at EPoS systems. Such systems capture valuable management information but what happens to this information? How is it used?

Research shows that this information is then transferred, often manually, to spreadsheets and other applications, and eventually into an accounting system. These tasks are labour-intensive, time-consuming, costly and the end result is often "several versions of the truth". Departments have their own systems and sets of information, leaving large margins for error.

Now, however, smart operators are turning this process on its head. They are realising that it is information management, not the EPoS, that provides the real decision-making power behind a business. It is the business intelligence solution that delivers information in a form that is easily understood and useful.

That means it is the practical applications, such as stock control, purchasing, forecasting, payroll and human resources, that are becoming the primary focus of technology purchasing decisions.

Naturally, the big question is always about cost. The problem in the past with IT projects has been the considerable capital cost of implementation and maintenance. But now there's a way around this, by accessing the software needed via the internet.

Many hospitality companies are developing web-based IT strategies. Internet solutions, hosted away from the clients premises, remove the in-house maintenance overheads usually associated with IT systems. And a reputable hosting centre will also usually be considerably more secure than the client's own in-house network. Inexpensive and high quality internet access is now widely available, completely removing the need for a huge capital outlay, and there is no costly maintenance.

Some providers offer attractive solutions on a monthly subscription basis that do not involve any capital outlay.

The ability to wrap the cost of the solution, support and upgrades into one fixed fee is a further attraction to many.

In return you can get business intelligence that allows you to focus on the true source of profit for your business. It can provide reporting on every product you sell and the GPs they contribute to your business on an ongoing basis. It can allow you to measure and control on a day-to-day basis the cost of wages, commonly regarded as the single greatest cost to an operator, and much more.

Just as Excel spreadsheets replaced paper records and proprietary software replaced Excel spreadsheets, so we are moving to the fourth generation solution - access to affordable, pay-as-you-go, state-of-the-art software.

As the trend towards internet-based solutions continues, operators will continue to reap the benefits. It is the way of the future.

Benefits of online business intelligence

  • Stock control & purchasing:​ accurate real-time costing, unlimited forecasting power and stock
    ordering efficiencies
  • HR:​ user-friendly, online employee database constantly upgraded to meet the changing needs of the industry and legislation
  • Scheduling & forecasting:​ sets wage targets based on budget revenues and controls the impact of day-to-day wage costs
  • Payroll:​ integrated payroll options incorporating tronc and BACS
  • Cash:​ simple bank reconciliation system cutting administrative overheads
  • Events:​ scheduling, forecasting, costing and selling events and functions.

Mark Pitcher is director of Fourth Hospitality, which supplies web-based business intelligence solutions to the hospitality industry, including Regent Inns. For more information go to www.fourthhospitality.com

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