Growing companies often reach a stage where relying on gut feelings and manually compiled spreadsheets is no longer sustainable. This is when the need for real-time, accurate, and comprehensive reporting becomes paramount. Transitioning to a data-driven organisation marks a significant milestone, trading previous ad-hoc/manual flexibility for automated consistency and robustness. Here’s how to navigate this transformation and choose the best approach for your business.
The Data-Driven Shift
Embracing a data-driven culture involves systematic use of data to guide decision-making processes. This means the data needs to be always available and consistent. At this juncture, companies have two main options:
Hiring an in-house BI wizard, or
Getting professional BI services
Hiring an In-House BI Expert
One strategy is to bring on a first Business Intelligence (BI) team member. This individual will spend time understanding the business intricacies, developing the necessary infrastructure, and creating reports. Ideally, this person is a "unicorn" who excels in databases and dashboard visualisation, and understands business. However, this approach often leads to:
Overload: A single person handling all requests can quickly become overwhelmed.
Backlog: The constant influx of reporting requests from various departments can create a significant backlog without a proper top-down filtering mechanism.
Scalability Issues: As the workload grows, additional resources are needed to support this function resulting in an ever-expanding team.
Dependency: If the person leaves, no-one knows how the report calculations work and all the investment is lost.
Beware that tech teams love to solve problems themselves, but BI is deceptively difficult and hiring for DIY can end up stuck in costs.
Bring in Professional BI Services
An alternative approach is to make use of BI services from professionals who specialise in this area. These experts specialise in creating robust data infrastructures and models, tailored to your business needs quickly and efficiently. They have been there before. They are faster. They leverage their extensive cross-industry knowledge and expertise to apply best practices and benchmarks from various industries to optimise your reporting system, and help focus on the key business metrics to provide insightful, actionable reports.
When done well, setting up a reporting ecosystem is a front-loaded effort where most of the data infrastructure and reports are set up at the start and then transition into maintenance and enchantment mode. In this case, outsourcing can be more cost-effective and efficient in the long run.
Advantages of Outsourcing
Outsourcing BI services offers several benefits:
Immediate Impact: Professional BI teams can set up comprehensive reporting systems very quickly and accurately and provide tools to assist decisions almost immediately.
Focus: By delegating non-core activities such as this, you are allowing your team to focus their thinking on what truly matters.
Future-Proofing: Leverage the expertise of professionals who are well-versed in the latest BI technologies and methodologies and keep your ecosystem up to date.
Scalability: Your reporting infrastructure grows with your business needs without increasing your headcount.
Cost Savings: Long-term cost benefits by avoiding the need for a large in-house BI team.
Recognising the Right Time for Next Steps
Identifying the right moment to make this transition is important. The sooner you implement a robust BI solution, the better positioned your company will be to make informed decisions and drive growth. Be proactive.
As a rule of thumb, avoid hiring in-house BI team members until you absolutely have to. This might sound contrarian but it's not a bad thing to spend as much time as possible squeezing value from manual reports until you cannot cope any further, and then as a first step receive assistance from professionals. Permanent hiring is the most costly step and should be reserved for when it can really be justified - in our view over 100M annual revenue, although it depends a lot on the complexity of the business. Until then, stay lean and bring in help on demand.