Several years ago, the Texas Medical Association discovered that more than 1,000 doctors in the state of Texas were taking advantage of a members-only insurance program, even though they were not members of TMA. By bringing these nonmembers back into membership, the result was a top-line dues revenue increase of nearly $500,000. How did they make this discovery? Using business intelligence.
In the past two years, there has been quite a bit of buzz around business intelligence. But what is it? And how are associations using it?
Business intelligence (BI) is a management process for using data to make decisions. Others call it fact-based or data-based decision making. At its root, of course, is using data to help make decisions and improve your business.
While software is part of the business intelligence equation, it should be clear that BI is a management process that software can support. This means that a BI initiative does not require a large investment in business intelligence software and consulting. As we’ll see below, there are good examples of “low tech” business intelligence initiatives producing great results.
Business intelligence can help you find “overlooked” data, help you focus on your best customers, or even help you develop new products, services, and pricing models.
Where Do I Start?
For any BI initiative to be successful, the following prerequisites need to be in place:
Establish clear outcomes. Before you start down the BI path, you have to be able to answer one question: “Why are you doing this?” If you don’t have clear outcomes in mind (e.g., to increase membership, improve customer service, identify new markets, etc.), you’ll have no idea if your BI initiative is successful.
Develop clear processes. To be most effective, you must have a clear process in place for collecting and managing your data. The success of BI rests greatly on having the data you need, and in order to have that data, you have to have processes in place.
Ensure that data is being captured. This is related to having clear processes in place. In order for BI to be effective, you must have the data you want to analyze which means you have to ensure that the data you want is actually being captured, and in a systematic manner. While it may sound elementary, you can’t analyze data you’re not collecting. So if analyzing your members’ professional specialty is something you’d like to do, you need to collect that information first. Ensure that data is accessible for analysis and presentation. This is where software makes its appearance. The most complete BI initiatives will actually gather data from multiple data sources, storing that data in a data mart or warehouse, and use BI and analytics software to analyze the data for trends. It is imperative that you have the means for manipulating and managing your data, and that the data is in an accessible form. This means, of course, that data on paper (i.e., not electronic) is not useful in a BI setting.
Actually apply the knowledge. The final prerequisite to a successful BI implementation is committing to acting on the knowledge learned. That is, actually changing your organization’s behavior as a result of the BI initiative. Peter Drucker wrote in the Effective Executive: “The greatest wisdom not applied to action and behavior is meaningless data.” If your organization is notorious for analyzing data but continuing to do the same thing, BI may not be for you.
How Can a BI Initiative Help My Organization?
Business intelligence can help you find “overlooked” data, help you focus on your best customers, or even help you develop new products, services, and pricing models. Here are two examples of how BI can help:
The Texas Medical Association (TMA) has been working on their BI initiative for nearly six years now. After moving their data to a data warehouse and analyzing it with BI software, TMA discovered that nonmembers were taking advantage of their insurance program, as noted above. This simple yet profound discovery led to a top-line membership dues revenue increase of nearly $500,000. Since then, TMA has increased its net member acquisition to over 1,200 members per year, quadrupling what their previous average had been.
At a much less intensive scale, several clients have developed reports that allow them to compare registration trends for their largest meetings. That is, they are able to compare the pace of registrations for this year’s annual meeting to previous years’ data. With this information in hand, they are able to adjust their marketing appropriately to ensure that attendance is where it should be.
But is Implementing a BI Initiative Worth It? Doesn’t it Cost a Lot of Money?
With any new initiative that will require substantial resources (time, money, or both), you should consider the return on investment first. Before your organization invests time and money in a BI initiative, be sure to review the prerequisites outlined above. Once you’ve established what you’re trying to achieve, and you have the tools and processes in place to manage the data you’ll need, you can decide to what level you want to take your BI initiative.
How Many Other Associations are Doing It?
In a recent nonscientific survey, I asked association executives whether they had a BI initiative in place, if they were going to put one into place in 2008, or if they really had no idea what BI is. From nearly 100 responses, only about a third answered that they had a BI program in place or planned to start one in 2008. Read another way, fully two-thirds of the respondents said they have no BI plans for this year. Interestingly, this matches closely with what a CRM industry analyst wrote in a recent column, that only about 20 percent of for-profit businesses are actively implementing business intelligence right now.
Clearly, there is value in implementing a business intelligence program, if the prerequisites are in place, and if you know how you want to proceed. Investing large sums of money is not a prerequisite for success; depending on your circumstances, you may be able implement a “low-cost” solution that delivers big results. So what is hiding in your data? Business intelligence might be able to answer that.
Reprinted with permission, (c) May 2008, ASAE & The Center for Association Leadership, Washington, DC.
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