Businesses make strategic decisions five times faster with business intelligence than ones that don’t. Managers no longer rely on instincts.
They rely on business intelligence analytics, a series of software tools that help you make sense of the available data in your organization.
You can measure the success of sales, marketing, and operations. Business intelligence does more than give you insights. You can a reliable way to see what’s happening in the business in real-time.
Managers get lost in using business intelligence because you can measure just about anything. They don’t know which business metrics the most important ones are.
If you’re one of those managers overwhelmed by data, you’ll want to keep reading. This article covers which business KPIs are the ones that you need to track.
Table of Contents
1. Overhead to Sales
Cost to sales measures the percentage of overhead to revenue. It helps managers see the overall efficiency and profitability of the business.
What’s a good overhead to sales percentage? There isn’t a set rule, but as a guideline, successful businesses stay under 35%.
If you’re at 45% – 50% you have to look at ways to either increase your sales or lower your overhead costs.
2. Revenue Growth
Revenue growth measures the sales growth on a monthly or annual basis. You can compare the current month to the previous month to get a general sense of the direction of the company.
Comparing revenue growth on an annual basis takes into account seasonal trends.
3. Deal Days
Managers have to know how much potential revenue is in the sales pipeline and how much they expect to close.
Business intelligence that tracks the number of days it takes for a deal to close gives you an understanding of cash flow and the effectiveness of your sales team.
If you’re using Microsoft Dynamics, the Power BI dashboard gives you this information. If you see long sales cycles, you can work with your sales team to shorten the amount of time to close deals.
4. Downtime
Companies lose thousands of dollars a day because of downtime. IT networks and manufacturing equipment impact productivity and so much more.
By measuring downtime, you can take steps to limit it and improve productivity.
5. Revenue From New Products
This is a very simple metric to track. You’re calculating the percentage of revenue that comes from new products.
This business metric is useful to see how well your new product lines are accepted by consumers. If you’re still relying on old products for revenue, you might have trouble maintaining revenue in the long term.
Make the Most of Business Intelligence
Business intelligence can be your best friend or your worst enemy, depending on how you use it in your business.
If you use the right business metrics to track, you can make smart business decisions quickly. Use the wrong business KPIs, and you might as well stick with your gut feeling.
You just learned which business intelligence metrics are the most important ones to use. Be sure to invest in a good business intelligence solution that lets you track them.
For more business management insights, be sure to visit the Business section of this site.
About Carson Derrow
