News

May 17, 2017
How to back up your instinctive choices with facts and make evidence-based decisions.

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Imagine you need to buy more buses for your fleet. How do you decide what make, model and year to buy?

Do you:

  1. Contact a few manufacturers for quotes to see who can give you the lowest price?
  2. Talk to some of your industry contacts to get recommendations on what to buy?
  3. Rely on your gut feel and past experience to make a choice?
  4. Do all of the above?

While price, endorsements and personal experience are all important factors to take into consideration while making decisions, they are not always reliable indicators.

  1. Price is not a gauge of value: a cheap bus might be low quality, but an expensive bus could simply be overpriced. It’s not always easy to spot a lemon based on the price tag.
  2. Recommendations are based on subjective opinions: you’ll find that some people swear by Volvo buses while others think they’re overrated and Scania offers better value. Who should you trust? (And should you be taking this on trust?)
  3. Instinct is not infallible: it’s human nature to take things for granted when they go as planned. It’s easy to remember the one time a Mercedes broke down on a service, but not the hundreds of times Mercedes buses worked without problems. Negative experiences can create unfair biases, which cloud judgement.

However, what if you knew the cost to run each type of bus, right down to daily fuel consumption and average cost for repairs throughout its lifespan? What if you knew which buses were the most prone to accidents due to large blind spots?

You’d have facts, figures and statistics to back up your intuition, sort the biased opinions from the fair and recognise good value pricing. This would give you a solid foundation from which you can make better decisions for your business.


Business intelligence – too hard?

Evidence-based decision-making doesn’t have to be an unachievable goal. It’s not impossible to find all of the information you need to accomplish this.

Chances are, you’re already gathering this data somewhere – in your accounts ledgers, workshop books, operations software and so on. All you need to do is pull it together in a useable way. Here’s some simple steps on how you can get started:

 

1. Know what you want to achieve

People often get excited about installing new technology before they’ve thought about what they want that technology to do for them. Don’t fall into the trap of looking at features first, objectives last.

You need to work out what objectives you want to achieve through the use of business intelligence (BI) first. This will help you figure out what kind of insights you seek to produce, and from there you can map out what data you need to collect, how often you need to collect it and how you will record it.

Only once this process is complete and you have fully scoped out your needs, should you start looking at which software or system to purchase.

 

2. Think beyond technology

Business intelligence is more than just an IT thing; it needs to be part of your company culture. Everyone from ops to workshop to finance to leadership needs to commit to business intelligence to make it work.

To derive the full value of a BI program, your whole company needs to be involved in the discussion about business intelligence and buy in to the concept: not just to use your BI software, but to feed it data on a consistent, ongoing basis.

If you are not able to lead the project of incorporating BI into your organisation yourself, it is tempting to ask your most technical employee to take the reins and get it done. However, the Harvard Business Review actually recommends that you look beyond the IT department and choose a person with these qualities:

  • The ability to collaborate, accept input from others to influence ideas and champion other people’s ideas
  • An understanding of how your business currently operates and a vision for how BI can lead it to a better future
  • Eagerness to create an environment of discovery, where business insights are used to shape the future of the company
 
3. Prepare to meet resistance

You may find some dissenting voices in your organisation once you start involving more people in your BI project. Some people may feel threatened by the implementation of BI, while others might regard it as just more work for them.

You can neutralise these assumptions by stressing that a BI tool is not going to replace anybody; it is actually going to empower everyone in your company with information. A BI tool, correctly implemented, will:

  • Generate business insights that your leadership team can use to make better strategic decisions
  • Bring to light abnormal costs or performance issues so your managers can take corrective action quickly
  • Track departmental or individual progress towards KPIs, giving staff a sense of achievement and more opportunity for recognition

During the process of working out your business objectives, you will find opportunities that extend beyond a single department or challenges affecting several areas of your business which can be solved through the use of BI. Demonstrate the value that each person will experience to overcome objections from employees.

 
4. Get all your data in one place

Once you’ve done all the hard work of determining your business objectives, figuring out what data you need to collect and getting buy-in from key stakeholders in your organisation, it’s time to look at the tool you’re going to use to facilitate your company’s journey from data-swamped to insight-rich.

If your company is small enough, you may find that several linked Excel spreadsheets will do the trick. If you already have an Enterprise Resource Planning (ERP) system or operational database, these systems might have some basic BI or reporting functions that you can use to get by.

However, if you have more complex requirements or specific goals that you want to achieve which are unique to the bus industry, you will be better off using a configurable BI tool that has been created for bus operators and which integrates with your existing systems. This will be more cost-effective than purchasing a generic BI tool, which requires customisation by expensive consultants or contractors.

Whichever way you choose to go, it is essential that all your data is stored (or at least accessible) in one place so that any business intelligence generated shows you a complete picture of your entire organisation. Having data trapped in numerous systems will only result in your analytics program being difficult to use and keep up to date once the initial excitement wears off, rendering it useless after a while.

 

The key to success with BI is a clear vision, commitment from your whole company and consistent persistence. If you can weather the short-term pain of culture change and new processes, you will reap the long-term benefits of becoming a data-driven organisation and gain an edge over your competitors.

 

Article written by Trapeze; Originally published in QBIC News, issue June 2017.


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About the author

Mel Pecen, Managing Director, Australia & New Zealand

Mel is an experienced public transport professional, having spent 30 years in the bus industry. Learn more about Mel

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