BUSINESS INTELLIGENCE THE KEY TO EFFECTIVE PROFITABILITY ANALYSIS

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1 BUSINESS INTELLIGENCE THE KEY TO EFFECTIVE PROFITABILITY ANALYSIS

2 BUSINESS INTELLIGENCE THE KEY TO EFFECTIVE PROFITABILITY ANALYSIS There s a whole lot more to profitability analysis than simply netting debit and credit balances or reviewing a sales summary at the end of an accounting period. These static methods only tell you a small part of a larger story. Profitability analysis provides an additional dimension of knowledge about business operations, beyond just who sold what to whom. The profitability analysis component of business intelligence lets you examine your profitability and identify trends in your earnings. This means you can take advantage of a positive trend or quickly address a negative one. To effectively analyse your profit performance, there are 3 important areas of your business that require your attention. These are sales, customers and products. Profitability analysis should help business leaders develop strategies based on reliable, data driven insight and help predict trends that lead to proactive decisions.

3 HOW BI ENHANCES YOUR PROFITABILITY AREA SALES CUSTOMERS PRODUCTS RESULT BI ensures sales executives are aligned to business goals. BI helps achieve profitable revenue growth from customers. BI allows products to be released into the market faster. HOW Sales Executives Key Performance Indicators (KPIs) are aligned to profitable sales. Data from various sources is automatically aggregated to reveal the true value of a customer. Time spent on guesswork is eliminated from product development strategy. FEATURE Access real-time data to display performance versus targets, individually or as a team. KPI dashboards let you evaluate performance periodically or on-demand. Consolidate all your information from different systems in one place. Implement rule-based models to create business rules and create alerts for unprofitable activity. See product performance trends and profitability in real time. Add real-time dashboards to display product profitability. Utilise predictive modelling to understand product profitability based on inputs from other cost centres.

4 KNOW YOUR SALES TEAM It s likely you have some knowledge of your sales team, but do you know which member generates sales that contribute the most to your profit? Profitability analysis provides you with an accurate means of identifying exactly how much profit each member of your sales team is generating. You also have the ability to boost both your profit and gross sales by modifying the compensation structure for your sales team and incorporating profitability goals. IDENTIFY YOUR BEST CUSTOMERS Who are your best customers? Your sales reporting system can probably tell you how much each customer generates in terms of gross revenues, but do you truly know which ones generate the most profit for your business? BI can help you identify your best customers based on many factors such as frequency and value of their purchases. You can quickly identify which customers are costing you money. Which demand deeper discounts or return a higher number of goods. With BI, you can better decide which higher-profit customers to focus on. You can also quickly identify which customers are contributing to your bottom line and take action accordingly.

5 UNDERSTAND YOUR PRODUCTS Defining a marketing or product development strategy without understanding which products drive your bottom line is simply guessing. Knowing how much each product contributes to your profits is essential to the formation of short term and long term product strategies. Decisions regarding which new products to develop and launch, or to discontinue, all start with a deep knowledge of each product s profitability. Even if you re planning short term strategies for product promotional offers or advertising buys, you need accurate and timely feedback regarding whether your actions will effectively grow revenue and profit. With BI, you can effectively analyse profits and gain deeper knowledge of your products to easily plan successful marketing and product development strategies. These are just a few benefits the profitability analysis component of BI can provide your business. Contact us to learn more about how MYOB can help your business stay ahead MYOB.COM.AU MYOB.CO.NZ 2016 by MYOB Australia. All rights reserved. No portion of this book may be reproduced mechanically, electronically, or by any other means including photocopying, without written permission from the publisher. MYOB Australia. Level 3, 235 Springvale Road, Glen Waverley, Victoria, 3150.