Applying business intelligence to your franchise: implementing a crucial aspect of business operations ... one step at a time.

Most businesspeople have heard iterations of the phrase, "You manage what you measure." Most organizations do a great job of measuring sales history, past marketing results and so on. This is tremendously important for businesses, but is it enough?

I call this the "Rear-View Mirror" stuff. It gives us a great view of where we've been. In order to lead organizations into the future, companies need to look where they are headed and be able to identify and avoid any obstacles that might be in the way. But, companies can't just look ahead or they risk the possibility of not seeing trouble coming up from behind. So, ideally franchise systems need to have a 360-degree view.

How can we get this?

Business intelligence is a hot-topic these days and it can mean different things to different people. For the sake of this article, let's define business intelligence this way:

A process or discipline that involves the use of tools to provide information that enables people to make more informed decisions.

Now that there is a definition, let's break it down. Let's discuss the various tools and learn how they can help franchise systems make more informed decisions.

There are participating suppliers in the International Franchise Association that are knowledgeable and willing to work with companies to implement a business intelligence initiative that will achieve the needs of a specific franchise system.

What are the tools?

Dashboards

Dashboards condense large volumes of information to provide graphical and visual analysis. This can make it easy to convey complex business data quickly and intuitively.

Data Warehouse

A data warehouse is a large, centralized database that integrates data from various sources within an organization. This data may be in different formats. It is often arranged by topic such as customer data, franchise location sales information, marketing and so on. Data warehouses are used to support forecasting and decision-making processes.

Event Management

Event management automatically monitors data and can immediately alert users on time-critical information and occurrences of events. The users can be notified on their PCs, PDAs or cell phones within minutes of the event and can be given all the information they need to make an informed business decision.

Modeling

Modeling involves an analysis technique that looks at past data, events and results and enables an organization to predict what may occur based on various scenarios and conditions.

Reporting

The delivery of detailed reports enables executives, managers and frontline employees to make informed decisions that support the strategic initiatives of an organization. Reporting can include financial statements, sales statistics, customer buying and usage trends, inventory figures and other data critical to the business.

Scorecards

Scorecards include metrics that enable an organization to measure and monitor its actual achieved results and performances against specific targets and goals.

Here are a few examples:

Here is an example of a dashboard that is provided to Two Men And A Truck franchisees with up-to-date information on scheduling and sales activities. The franchise system uses Web services to collect the information from franchise locations. Once implemented, it is an invisible process for the franchisees and virtually maintains itself.

This dashboard provides a franchisee with a snapshot of the current month for six important categories at once: new customers, new estimates, new work orders, new jobs scheduled, projected sales and actual sales. Instead of having to look at many different reports, they get all the information at one spot.

Additionally, they do not have to be in their offices. As long as they can access the Internet, they can get to their dashboard.

Red Flags

An example of event management is utilized in our customer reply card system. The firm mails a reply card to every one of its customers after they have moved. Returned reply cards are scanned and data is extracted and used to calculate important customer referral and satisfaction ratings. If a reply card shows that the customer will not refer the firm or they rated it below a specified level on any one of five categories, the franchise system marks that as a "red-flag" card. This immediately triggers an event. The franchise that serviced this customer will get an urgent e-mail notifying receipt of a "red-flag" reply card. The company also has triggers to help franchises monitor their customer satisfaction ratings. By notifying the franchises immediately, they can quickly respond and address issues and concerns with "red-flag" customers. By doing this, the franchise system can very often turn a dissatisfied customer into a very loyal customer.

Reporting is the one tool that most businesses already utilize. Most common are sales reports showing year-to-date versus previous year-to-date sales, actual-versus-budgeted and so forth. These are the rear-view mirror reports. If one begins to collect information from franchises that provide expected revenues, scheduled jobs, booked orders, and so on then you can start to give your franchisees reports that predict or forecast ahead (the view out the windshield).

If you are interested in learning more about business intelligence and how to integrate it into your franchise systems, there is a book I would recommend, "Performance Dashboards: Measuring, Monitoring and Managing Your Business," written by Wayne W. Eckerson. He is the director of research for the Data Warehousing Institute, which is a leading association of business intelligence professionals. Eckerson provides great insight into how to maximize the impact of business intelligence within your organizations. The book also contains several case studies.

Implement business intelligence one step at a time. If one can provide one new tool that can improve operations, increase sales or provide improved customer service, it's a good thing. Add new tools over time. Sometimes slow and steady really does win the race.

In order to get started, first examine which information and data is currently collected and stored and determine how that can be used. Second, ask individuals (both from your home office and from your franchises) which information, data and tools could help them in their roles. This will help to determine new information or data that should be collected.

While the business-intelligence initiative involves the information technology folks, it needs buy-in and commitment from everyone within an organization. In the case of a franchise system, it needs 100 percent commitment from both the franchise system and the franchisees. Let franchisees help determine the items that are on their dashboards. Let the marketing folks do the same. Involve them throughout the creation, testing and implementation and they take ownership. This will go a long way in assuring that the initiative will be a success.

Hal McLean, CFE, is director of information systems of Two Men And A Truck International, Inc. He can be reached at 51 7-394-7210 or [e-mail].