Top 5 Ways Business Intelligence Can Improve Sales Forecasts and Push up Profits
What is Business Intelligence?
What do you, a restaurant owner, do if revenues refuse to budge despite your best efforts? You've employed the best cooks in town, spent a fortune on decking up the restaurant, and ordered the best ingredients. But the results are still poor.
That's when you look to business intelligence and business analytics for an answer. They study your data and promptly highlight the problemyou haven't been advertising your products well enough. You implement their recommendations and soon start to notice an upward curve.
That's the power of business intelligence every organization needs to harness.
Business intelligence looks to help organizations with data discovery and data gathering. Every organization generates a great deal of data through multiple systems- point of sale (POS), employee management, business management, customer relationship management, enterprise resource planning (ERP), and so on.
This data, however, is unstructured and inert and has to be interpreted and analyzed. Business analytics enters at this point and helps the organization inspect, study and understand various data sets to answer the 'whys', 'hows' and 'what nexts?' not just the 'whats?'.
Business intelligence is restricted to descriptive analytics, seeking to create summaries of past and present data. It may simply be a profit-loss statement, a comparison of profit margins for this year and the last, or a report of the labor hours recorded during the holiday season over different periods of time. Business analytics goes a step further and engages in predictive analytics, drawing upon machine learning, artificial intelligence (AI), modeling, and statistics to make forecasts and recommendations.
The insights generated by the application of business intelligence analytics allow an organization to make important business decisions in order to stay ahead of the competition. These decisions relate to pricing, positioning, and priorities; increasing operational efficiencies; spotting new revenue opportunities; identifying market trends; minimizing risks; managing resources, vendors, employees, and customers better; and reporting on key performance indicators (KPIs).
How Does Business Intelligence Software Work?
Business intelligence tools help in the collection and processing of vast amounts of information from various data sources for the purpose of data analysis. This is then summarized and creatively packaged as dashboards, reports, and data visualization.
Data from various sources, external and internal, is first collected by business intelligence or BI software and stored in a central location so that it can be interlinked and compared. This gives rise to a data warehouse. Mining the data contained in that 'warehouse' provides an organization with both, the big picture of its performance across various indices, and an in-depth understanding of particular business aspects.
Business intelligence software facilitates the easy interpretation of big data and makes data mining a smooth process so that data-driven tactical and operational decisions can be made. Such decisions provide the organization with long-term stability and a competitive edge.
Business intelligence tools bring together a vast range of data analysis applications. These include real time BI; mobile BI; cloud and software as a service BI; operational BI; location intelligence; open-source BI; collaborative BI, enterprise reporting; ad hoc analysis and querying; and online analytical processing (OLAP).
A BI tool works with data visualization technologies that create charts, business intelligence dashboards and performance scoreboards that display KPIs and business metrics. The BI tool, therefore, is able to bring company data to life in the form of easy-to-use and easy-to-comprehend visuals.
By aggregating vast amounts of data sets in one place, business intelligence software ensures that running the business becomes manageable. It also spares users the trouble and frustration of manually digging through a mountain of data.
Restaurant software solutions platform Hubworks provides a bouquet of software solutions like Zip Reporting, Zip POS Dashboard and Zip Forecasting that effectively address all the business intelligence and business analytics needs of a foodservice organization.
Global Cloud Analytics Market: According to a report by Markets and Markets, the global cloud analytics market is expected to expand from $23.2 billion in 2020 to $65.4 billion by 2025, at a 23% compound annual growth rate (CAGR).
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Benefits of Business Intelligence - No 1
Easy, automated sales forecasts-
A business, in order to become successful, should be able to accurately project its sales. With the help of business intelligence analytics, current and past sales data gathered from POS systems can be interpreted to reveal trends and predict future sales.
On the basis of these projections, inventory levels can be planned, the supply chain better managed, costs adjusted, utilization of resources optimized, employee scheduling made more efficient, and decision-making in general can be given a fillip.
Basic computer algorithms can predict sales based on yardsticks like sales for the previous week or year, weather changes, and so on, while machine learning enhances the accuracy of these forecasts. As the algorithms process more and more data, they learn which factors have the greatest impact on a business and hence, refine their projections.
Zip Forecasting, available on the Hubworks app store, can be easily integrated with a restaurant management system to help a business plan ahead for sales, labor, and so on. It even offers weather forecasts so that a business owner is prepared with the right inventory.
This Hubworks tool allows businesses to track and analyze data on a daily basis and predict sales within 15-, 30-, and 60-minute time intervals. Its interface can be quickly learnt and easily used.
Zip Forecasting uses advanced algorithms to completely automate projections based on past data. It even lets users choose the time period for which projections are to be based. This makes forecasting a lot less time-consuming and tedious and eliminates the risk of error associated with manual projections. The time saved can then be allocated to customer service.
Zip Reporting is another Hubworks product that takes the complexities of a business and translates them into simple and actionable insights. Data can be accessed, analyzed, understood in real time, using any device, even off site.
Benefits of Business Intelligence - No 2
Stronger inventory management-
A business intelligence system integrates with the POS to provide reports on items sold. Using these reports, a restaurant, for instance, will have a clear idea about its inventory levels. It can see which articles have depleted and have to be reordered, and which ones are available in sufficient quantity.
Running out of ingredients for a dish can lead to considerable embarrassment for the restaurant, and even drive customers away. This impacts sales. Ordering more than is needed, on the other hand, may lead to food wastage, and a resultant loss of money. Demand projections, therefore, have to be spot on.
Business intelligence and analytics allow the restaurant to manage its supply chains better and also ensure that the restaurant is always well-stocked. Moreover, analysis of the variation between expected and actual resource utilization lets a business find the best way to optimize resources and minimize resource wastage.
Matching supply orders with actual stock counts will also reveal possible food loss due to spoilage, pest attack, pilferage, or supply fraud. A clear knowledge of this allows a restaurant owner to take stronger decisions that may include the installation of CCTV cameras, changing vendors, and so on.
Zip Inventory, on Hubworks, lets a restaurant manager quickly and correctly do an inventory count by using a shelf-to-sheet format. It allows the manager to easily pinpoint overspending and food wastage. Following this, the stock count is updated across the Hubworks network.
On the basis of actual usage and par levels, Zip Inventory then recommends how much of each ingredient has to be purchased. Orders can be placed with a simple click of a button. There is absolutely no need to use faxes or phone calls for placing orders.
Hubworks tools that act as important aids in this process are Zip Supply Chain, Plum POS, and Zip Ordering.
Benefits of Business Intelligence - No 3
Reduced labor and food costs-
Labor costs make up most of the expenses of an organization. Food costs can also be substantial. Every organization aims to keep these costs down so that profits can be raked in. Sales data received from the POS system can let a restaurant owner know, for instance, which are the busiest and slowest periods of traffic. Scheduling and cross-training of employees can be done accordingly.
POS systems offer a substantial amount of data on employees, like hours worked, peak hours in the store, the best and worst performers, and so on. It can also function as an employee time clock.
Zip Clock provides reports on how employees utilize their time, while Zip Checklist allows organizations to prepare standard operating procedure (SOP) task lists for managers, supervisors, and employees. It provides printed employee productivity reports that enable business owners to make checklist refinements and create more effective training modules. Both, the Zip Clock and Zip Checklist business intelligence tools are available on the Hubworks restaurant app store.
The correct reading of reports tells the business owner and employees what to expect so that unnecessary stress and unexpected rush can be avoided and throughput and customer service can be improved.
Demand can be flawlessly anticipated and sales accurately predicted using the Zip Forecasting tool. It helps restaurants place precise supply orders and avoid undersupply, oversupply, and wastage. With the help of the Zip Ordering solution, it may also be possible for restaurants to choose vendors that supply products and services of better or similar quality at cheaper rates.
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Benefits of Business Intelligence - No 4
Strategic tweaking of offers-
Sales data gleaned from POS systems provide information about the top-selling and profitable products of a business, and about products that don't have many takers. Such information helps a restaurant decide which menu items to retain, produce more of, and aggressively promote, and which ones to ignore.
Items with large input costs but low popularity ought to be discontinued. This data can be made available by POS reports, which would also allow restaurants to calibrate their order management practices to suit their new business strategies. Plum POS, with its real time, in-depth reports, is a useful tool for restaurants to have.
Restaurants operating across multiple locations can also get hold of data that tells them which stores are doing better than others. This data can be analyzed to understand and replicate the secret of their success, or push management to shutter units that are not doing well.
Sales data highlights heavy and light traffic by the hour and day. By interpreting this data, restaurants can devise promotions or other programs to boost sales during leans periods or increase staff during peak hours.
Customer data can also be gathered to prepare attractive loyalty programs. Restaurants may make use of data science to understand if and how casual customers can be turned into loyalists.
In the competitive world of today, it is no longer sufficient for restaurants to track demographic data. They have to seek personalized and specific information, like the flavor of coffee or mode of payment preferred by a customer, time of day the customer frequents the restaurant, and so on.
Based on these, personalized promotions can be crafted and customers can be targeted through emails, text messages, and social media. How customers should be best approached, can be understood from specific customer reports.
Benefits of Business Intelligence - No 5
Discovering blind spots-
This is an underrated but crucial job performed by business intelligence and analytics. Without identifying its blind spots, a business will keep losing money with no way of plugging the holes. So it is very important for any business to identify problem areas that are difficult to shed light on otherwise.
For example, a restaurant may be spending too much on an ingredient, unaware that a product of equal or better quality may be available in the market at a rate cheaper than what the restaurant's regular supplier has been charging.
Zip Ordering allows restaurant owners to instantly discover and contact local vendors, view their product catalogs, and compare rates so that the best deal can be cracked. A business should be willing to change its suppliers and choose only those that are completely suited to its needs and can help it shore up profits.