Business Intelligence for Product Teams
Commerce: the activity of buying and selling, especially on a large scale.
It’s a well-known - and rather obvious - fact that for a business to make money it needs to sell something. In most cases this “something” is either a service or a product. A dentist sells a service while a tech company sells a product.
To break it down even more, when it comes to a product, the product is either tangible (a physical object) or intangible (digital - a software or license). While both are different types of products, both require a business intelligence software to gain invaluable insight into profitability - or lack thereof.
The product team is a priceless asset to the structure of a business. It’s their knowledge that supports the other departments on how to sell, market, and operate the product. And with a BI tool, the team can go even further by forecasting data that will reveal all the information that’s happening underneath.
The product strategy lies in keeping track of certain KPIs: market share, volume, quantities sold (and of course, how many need to be sold), as well as recurring revenue. These performance indicators are in no way the essentials for each product team, it really depends on the type of product being sold.
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How much is too much?
Let’s take a look at tangible products from the fictitious company, Baby Blue. They specialize in children’s products. They buy products from all around the world with retailers in most U.S. states. Products are sent to one main warehouse and then shipped out to their brick and mortar stores.
They use NetSuite as their ERP and have installed specific modules and solutions: Marketplace Reconciliation for their e-Commerce store, Inventory Management for their inventory lifecycle, and WMS for managing their warehouse.
This has been a business process that has worked for years; however, lately, it’s become evident that there are limitations with an ERP in regards to managing inventory. For example, their store in California has the highest revenue and is constantly out of stock; whereas, the store in Illinois often has over-stock in certain baby crib brands.
At the moment, they send the same amount of inventory to each store in hopes that it gets sold and by the end of the year, they’re left with large amounts of inventory that hasn’t been sold. Leaving them to have too much inventory and not enough demand.
For a product-based company, it’s vital that the inventory meets the demand and vice versa. In California, they have too much demand and not enough inventory. In Illinois, they have too much inventory and not enough demand.
So, how can this be fixed? With a BI platform, a company is in full control of their products and services. They can analyze historical data through customizable dashboards and predict the future of their inventory based on trend reports over the years.
For the past 3 years, the store in California has been constantly understocked with products. Based on this historical data, the company can strategically ship double the amount of inventory to this store that is typical of the other stores.
Companies can even find hidden truths in the BI software when it comes to demographics, location, and more. If one location has brought in triple the revenue, while another location is constantly behind monthly objectives, they can take advantage of the information and close that location. They either leave it at that or open another store in the more successful region.
The product owner is able to take in the data from BI and predict how much inventory needs to be bought per year without ending off the year with a massive quantity of products. Additionally, it showcases what are the popular products and what products should potentially be put to rest.
The yearly subscribers
Intangible products often tell another story since they don’t require a physical warehouse or inventory management.
The objective of an intangible product, such as NetSuite ERP or NetSuite Data Exporter is to sell a license or contract that incurs yearly revenue. These types of products often have a higher price tag and require the buyer to pay yearly fees, which keeps the company afloat.
The big KPI for these types of companies is to stay in control of the recurring revenue to keep up with the profitability objectives. If a company sells 3 licenses one year, 4 the next year, and 7 the next, that’s a healthy growth, especially as the original three licenses will continue to pay their yearly fees in addition to the new 4 subscriptors.
While that’s all easily said and done, how does a company keep up with the recurring revenue and ensure that they stay relevant with a solid percentage in the market? Business intelligence will locate, within a large data warehouse, the big volumes of data that can be sliced and diced to get the information under the surface.
In other words, the manipulated data set can answer the question: “If I sell the same amount or even double the amount per year, how much revenue will I have in 1, 2, 3 years?” It will also take historical data into account and help the product team understand past reports on previous licenses, subscriptions, and software.
Collaborative profitability
A company’s product is almost like their own child. They’ve nurtured it and developed it into the machine that it is today, whether it’s a physical or digital product. Therefore, while the product team nurtures it to the point of being ready for the public, there will always be a collaborative aspect among the other departments.
From marketing to sales to customer satisfaction, it’s crucial that the product team provides these departments with the appropriate data and assets to sell and market the product. How is this done? With a BI product.
If the other teams don’t have the necessary skill set to launch the product to the appropriate demographic, it can be difficult to gain any sort of profitability. As a product manager, maximizing a business intelligence tool to its fullest potential is becoming the only way to grow a product.
To learn more about GURUS Business Intelligence for product teams, reach out to our product team for more information.
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