BI and CPM as an investment in infrastructure

Exploiting opportunity costs: BI and CPM as an investment in infrastructure

Nothing moves when it’s calm. So the obvious thing to do is to drop the sails and wait. But those who sail with their sails down may miss the fresh wind. A modern business intelligence solution can help to clear the air. And at the first gust of wind: full speed ahead.

Dark clouds on the horizon

Is a new lockdown coming, is it not coming – is it perhaps coming in a different way than it did in the spring? Only one thing is certain: Germany’s overall economy will shrink. The German Institute for Economic Research forecasts a decline in gross domestic product of around 6% for 2020. But this figure is subject to the fluctuations of the infection rate – as recently as the summer, a decline of 9.4% had been calculated. That would be the biggest recession in the history of the Federal Republic of Germany. Economic momentum is slowing, and without a breath of fresh air, many will capsize.

But history shows: Those who act wisely master the crisis.

Learning from crises: choosing the right course

An article in the Harvard Business Review (HBR) by expert author Walter Frick presents several studies that have taken a closer look at crisis winners. The result is a picture from the Great Depression to the 2008 financial crisis. The finding: successful crisis strategies focus on four problem areas: Debt levels, human resource management, decision-making and a new addition, digitalisation.

Downturn: Those who scrape through – cannot take off

It is no surprise, that a low debt level protects against losses. Those who have money still go shopping in times of crisis.  However, Walter Frick also describes: debts cannot always be reduced – especially when the crisis has already begun. There is a lack of flexibility. The situation is similar in the personnel sector. Nevertheless, one thing is surprising: companies that make people redundant in times of crisis reduce their chances considerably. Because in a crisis it is not only about survival – it is also about the day after, and then good staff is essential. Short-time work and preparation methods, on the other hand, have proven their worth. It is actually understandable: staff who would otherwise remain underemployed can be prepared for new tasks with further education and training.

Opportunity Costs: The opportunity in the crisis

Opportunity costs essentially describe lost profit, i.e. costs incurred in deciding between different options. Opportunity costs are therefore particularly high in good times. If a company keeps every employee constantly busy with lucrative orders, the expansion of the internal infrastructure entails high foregone costs. It is quite different in a crisis. When parts of the staff are underutilised, the opportunity costs for their work in building internal structures decrease. They can participate in training and use their know-how to implement a modern business intelligence solution.

- bdg insights

Business Intelligence: Next Level Digitalisation

The biggest impact companies have today is in the areas of decision-making and digitalisation: how good that the two are related. Database management with data sheets, usually in Excel, provides a basis for decision-making. But: the limits are soon reached. Because the challenge is not only to make the right decision – it also has to be made quickly. And the time window for decisions is constantly shrinking. As Walter Frick notes: Especially in recessions, change management has to work under high pressure.

This is exactly where modern Business Intelligence (BI) software comes in. The goal: minimise manual input, set up automatic data retrieval, underpin decision-making. As a result, the company management always obtains greater transparency about processes and value creation and can make better decisions on this basis.

A BI solution can also be developed in an agile way. In this process, partial solutions of the application are released before the entire project is completed and can already be used operationally while the rest of the application is still being developed. In this way, data quality and transparency are constantly improving and the application can support decision-making at management level with detailed business data.

A customised BI solution recognises uncertainties and points you in the right direction, even in rough seas.

The better decisions group implements state-of-the-art BI solutions for international customers. We develop the right application for every requirement profile. Do you have any questions? Our experts will be happy to help you.

See for yourself in our online demo.

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- bdg insights
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