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Why use BI software solutions?
Why is BI software worth your time? Here’s a simple answer to this question: it helps you make better decisions.
How? BI software solutions show you both present and historical data within the context of your business.
You use this data to develop performance benchmarks, get better at estimating future projects, and ensure that your business is running smoothly (and profitably!).
BI also helps to understand trends within your customer base and prioritize projects to increase your revenue.
BI data and insights can assist you with practically everything when used effectively, from assigning the right people to projects and achieving great product margins to recruiting new people on time.
If you don’t have a solution like that on board by now, there’s no better time to implement it.
What features do you get in BI reporting software?
Business intelligence solutions include dashboards that present data from many different places in several comprehensive charts (pie charts, Gantt charts, etc.) on a single page. BI dashboards can be tailored to the specific needs of your business. One glance is enough to tell whether the project is going in the right direction and generating the profit margins you need.
Data visualization is another handy tool that comes within the BI solution umbrella.
Data is your most valuable asset – it helps to estimate projects correctly, keep costs and schedules in check, and make sure that everyone at your company is happy.
But how to combine all of these different data points? Visualization in the form of a chart or graph is a real asset here. And most BI solutions allow you to tweak it so that you see everything that matters to you most.
Reports are a treasure trove of data. And I’m not even talking about financial data.
BI software also generates reports about resource allocation or employee utilization rate. Using these insights, you can understand who in your team is constantly 100% utilized or how many people it takes to develop deliver a certain project milestone.
You can use this data in future projects, such as forecasting project cost and revenue or allocating people to new tasks.
There’s no better way to control your company’s profitability than this.
10 metrics to look for in your BI reporting software
1. Activity vs. productivity
How much time do your employees spend on attending meetings? If you’re only tracking billable hours, you’ll have no idea.
You’d be surprised to see many IT companies have no idea how much time team members spend on non-billable tasks.
When you’re a small company with a dozen of developers, this isn’t a problem. But your approach to activity vs. productivity will change as your company scales.
Sure, you can use an Excel spreadsheet to track working time. But this solution isn’t scalable.
Use BI software with built-in time tracking to track both billable and non-billable hours. You’ll see how productive your employees really are or whether they spend way too much time on meetings. And to take action before it’s too late.
2. Employee experience (EX)
Employee experience metrics are related to soft skills management, utilization rate, resource capacity, etc.
Why are they important?
By keeping an eye on the employee utilization rate, you’ll know whether any people are getting overwhelmed with work while others have almost nothing to do. You can step in before it’s too late and reduce your employee turnover rate.
This can make a real difference when competing for skills and talent in the IT market.
You can use these metrics to discover and offer development opportunities to employees. Another perk is building a targeted mentorship program based on your knowledge about the hard and soft skills in your team.
3. Employee engagement
A good metric that shows employee engagement is the precision in logging working hours.
Introducing time tracking to a company is like saying that Pizza Fridays are over. It’s hard, and it takes time to get used to it.
But if you don’t track and measure working time, you’ll little clue about what’s happening in your business. You won’t know how much time people dedicate to work and how much time they actually spend scrolling Reddit.
If you discover that people aren’t engaged, you can do something about it. Something might be wrong with their alignment to the project, for example. It’s your job to fix that before they jump on the next recruiting offer.
4. Sales revenue (gross and net)
This one goes without saying.
Reporting software will give you precise information about your sales revenue, accounting for both gross and net values.
But a great BI solution will also show historical data to tell you how your project cost and revenue estimations compared to reality. That way, you will never make the mistake of underestimating a task again and keeping your profit margins in check.
5. Customer lifetime value
BI software solutions measure customer lifetime value to help you understand whether collaborations are bringing you the profit margin levels you’re looking for.
This part can be especially painful for growing IT service companies. When you’re a small business, you make all kinds of compromises to secure that first bunch of contracts.
But once you develop a reputation on the market, more and more projects start coming your way.
It’s worth having a source of data that inspires you to rethink your settlement models and segment your clients better to maximize your profitability.
6. Revenue per developer
BI software tailored to the needs of the IT industry also gives you data about how much revenue a given developer brings to your business.
This information is invaluable because it instantly shows you what your most precious resources are.
I bet that the engineers who bring the highest revenue also have the highest and rarest skills on the market, such as DevOps engineers or fullstack developers.
Knowing this gives you a headstart in the employee retention game because you can’t afford to lose this kind of talent.
7. Cost forecasting
BI software should also include plenty of information and data about your costs.
In an ideal scenario, you should be able to see:
- the hourly rates of developers involved in the project,
- the project overhead costs,
- the organizational overhead costs.
Having access to this information already at the level of the project allows you to forecast projects over the long term. This capability is critical for a company that wants to grow fast but also in a sustainable way.
8. Resource allocation insights for sales and HR
BI software integrated with resource allocation modules gives you a wealth of data about employee skills and how they translate into value delivered to customers.
If you notice that you don’t have enough backend skills because all your backend developers are constantly utilized 100%, it’s a clear sign that you need to hire more people. Otherwise, your developers will get overwhelmed and deliver poor-quality work.
You can get in touch with your HR department and start recruiting right away. You can only imagine how much value that brings when you’re facing a market that suffers from a constant skills shortage.
9. Resource utilization
Are you utilizing people assigned to a project in a sensible way? Or do some of the resources you allocated to a project not work as much as you expected?
You can learn about all of this by measuring the employee utilization rate. It will tell how much time it takes to deliver a certain milestone or how many people are likely to land on the bench.
Why is that valuable? Because it allows you to step and take action proactively instead of just reacting to the problem when it arises.
10. Available capacity
You just scored an amazing project, and you’re your fingers are tingling to sign the contract. But wait! You first need to make sure that you actually have people who are free to work on it.
This is where available capacity comes in handy. This metric shows you how many working hours or FTEs you have left and in which areas (during a given time period).
One glance at your BA software solution will be enough to instantly tell whether you can start the project right away or need to hire people first.
Having this knowledge at hand makes managing expectations so much easier.
You can find all of these metrics in Primetric, a BI solution that combines time tracking, resource allocation, and financials under one roof.
Book a demo with me to see how all of these metrics work in practice and make your life easier.