ORIGINAL POST FROM 2019. Still applicable!
Are you a small to middle market company looking to better leverage your data to make business decisions? Have you heard of Power BI and want to learn what it is all about? We want to help answer the common questions we hear from our clients regarding data analytics and Power BI.
What is “data analytics”?
We are all about data these days. But what does that mean? Businesses are finding new and competitive advantages by utilizing data analytics tools to gain insights into their data. The insights gained are endless. Some quick examples on the value of data analytics could include cost savings, time reduction, efficiency improvement, return on investment, understanding market conditions, sales performance and profitability, robust finance and accounting reporting, etc.
Large companies are taking serious advantage of data analytics. But what about small and middle market businesses? The top questions/concerns we hear from clients are:
There are many data analytics tools. How do I choose?
How much time and effort will this cost us?
I hear the term “Power BI” but what does that mean?
To help address these questions, we want to share our perspective from both an accounting/ finance and IT perspective. We will dig into answering some common questions we hear from our clients regarding Power BI and data analytics.
Note while reading: Always keep in mind the following key objectives/questions prior to investing time and effort into a data program:
Data Objective – What value will this data provide?
Data Execution – Who will own the data? Who will validate the data and ensure it is complete and accurate?
Data Communication – How will we communicate the data? How will we act on it?
Below are answers to the top questions we hear from our clients:
1. What is Power BI? How does it work?
IT Response: Power BI is a business intelligence and data analytics tool from Microsoft that can deliver powerful visualizations and data insights. As an analytics and reporting tool, the platform was built with the end user in mind. Packaged within Power BI are hundreds of connectors, such as Excel, SQL Database, Share Point, Salesforce, Mail Chimp, and Quick Books, just to name a few. It can help to drive business decisions through insightful representations of data and offers the ability to pull data from different sources. It will mainly help in any scenario where a “total view” is needed of your data.
Finance/Accounting Response: Power BI’s innate capability to connect data could be a low-cost alternative to expensive and sometimes ineffective system integration. Power BI’s ability to easily connect with popular financial, operational and sales packages reduces unnecessary costs and leads to an easily obtainable data set(s) to analyze.
2. I don’t have the time to spend learning and implementing a new data analytics system. What is the upfront time and costs of Power BI?
IT Response: Power BI costs as little as $10/month per user. You must already have Office 365 to be able to use Power BI. The report writing tool, the Power BI Desktop application, is FREE. We suggest trying out the desktop application to get a feel for Power BI before incurring cost of purchasing licenses.
In regard to the learning curve/time costs, Power Query is embedded and is similar in format to Excel. This allows for non-developer end users to make data manipulations logically. For example, data from different divisions are all stored in Excel spreadsheets. Power BI gives the capability to pull those spreadsheets together into one data set. Then with Power Query, add calculated columns, aggregations, relationships, etc. by pointing and clicking, not by writing code. Power Query tracks what you did and records it. The next time you need to do your reporting, simply point to the update spreadsheets and Power Query will repeat those steps you did previously. This is impressive and powerful. What used to require a developer can now be done by an end user with minimal training.
Finance/Accounting Response: If the words “repeatable” and “automated” put a smile on your face, Power BI could be the thing of your dreams. Think of the endless monthly grind of reconciliations, financials statement prep and management/board reporting. Just within accounting, eliminating the standard monthly processes to incorporate system repeatable steps can save hours, if not days. Imagine these efficiencies across other departments?
3. I have multiple systems. How challenging would it be to integrate?
IT Response: Short answer, compared to alternative data programs, integration is not challenging. Power BI is a great tool to pull data from multiple systems with many pre-packaged connections to common data sources and services. The data-modeling capabilities in Power BI allow for “Access”-like relationship modeling. Have Salesforce and Quick Books data? Use the connectors for Salesforce and Quick Books to pull the table you desire. Once that data is pulled, use the relationship modeling capabilities to relate the Salesforce data to the Quick Books. Have data on multiple servers? Data gateways allow you to connect to those disparate SQL servers and pull your data together.
4. I have an old system, my data is inconsistent, and cleansing has never been done. Can Power BI handle my data?
IT Response: While Power BI works best with “clean” data, data cleansing can be done right in Power BI. Power Query can be used to clean up the data without having a deep technical knowledge. Removing duplicates, unused columns, filtering out old/inconsistent data can all be done intuitively and repeatable. That being said, every situation is different. Power BI does not “obsolete” data/IT consultants, but it does give much more power to the end user than before. The best approach to dealing with “bad” data is to fix it in the source if at all possible. Fixing data in the source is always the preferred route.
Finance/Accounting Response: It is best to assign a data champion to ensure data is both complete and accurate. In small to middle market companies – finance/accounting generally are the best option to validate the underlying data prior to relying on it.
5. Why Power BI? What can my data tell me?
Data is everywhere but in many cases the ability to gain insights from the data in a cost-effective manner can be challenging. Power BI solves this issue. Historically, pulling data from disparate sources and creating meaningful visualizations would be only possible by a database professional. No longer is that the case. If you have a vision for what you want to see to measure the success of your team, department, division, or company, it can be accomplished in Power BI. From gauges, to line graphs, to summary tiles, Power BI brings data to life. See some real examples below:
Problem: Sales is concerned discounts and price reductions are impacting overall performance. A sales manager wants to understand the true gross -margin or profitability of sales per salesperson. Currently relies on a Salesforce report reporting total sales by sales person.
Solution: Integrate or “connect” Salesforce data to financial data within Power BI. Power BI can incorporate cost per SKU/item sold to the Salesforce data by sales person. This results in a powerful report, including sales and gross margin per sales person.
Problem: Accounting has to manually prepare financial statements and management reports in excel on a monthly basis. The current financial system is not capable of meeting the company’s financial reporting needs.
Solution: Integrate or “connect” results to Excel reports or the financial system. Once the desired format is setup in Power BI, a monthly process to load or sync to the financial system takes minutes. On a regular basis, financials and management reporting are formatted with respective illustrative exhibits (e.g. charts or other visual aids).
These are just a few examples. Data is being used everywhere – from helping hospital and insurance claims understand operations to marketing departments looking to understand the return on their investment.
Power BI is a “power”-ful tool to gain insights into your existing data. The learning curve and costs are manageable compared to the alternatives.
When implementing a data program for your business remember these key objectives:
Work with key stakeholders to understand the overall objectives and potential value of the data. Start simple!
Develop a process for the data definitions, processing and analysis.
Effectively analyze and communicate the results – and more importantly – act on the results!
About the Authors
Chris Cutrara, Cutrara Consulting is an industry “fixer”. He has over 18 years of experience, working extensively with companies going through change. He has a keen ability to quickly identify problem areas and implement new systems to create value for his clients.
Joe Bonomo, Corterra Solutions, is an IT consultant using creative problem-solving techniques and technology to solve business problems. Throughout his career, Joe has a wide range of experience as a developer, business analyst, solutions architect, and manager. Joe has worked with all levels in an organization from manufacturing floor workers, accounts payable clerks, and C-suite executives, to name a few, giving insight to the challenge’s businesses face.