Are you investing in “BI?” You undoubtedly recognize the acronym for “Business Intelligence” and, like most transportation professionals, agree it is a crucial strategic tool for any asset-, non-asset-based or blended operation.
But how you and your industry peers define and leverage BI might vary dramatically. For some, it represents little more than visual replications of an established set of KPIs. For many, BI remains largely a backend process through which data is aggregated and retrieved for reporting purposes. For a growing number of transportation enterprises, however, business intelligence represents an exciting new pathway to increased understanding of potentially thousands of variables that help determine an organization’s competitiveness and profitability.
Even the industry’s BI thought leaders would likely agree they are still in the very early stages of a journey that could ultimately revolutionize their businesses. In a sense, therefore, the progress made in this journey by any fleet, 3PL or broker can determine how “intelligent” they really are in an age of ever-rising data volume, variety and velocity.
“Like most transportation companies, we have access to tons of data that is not being analyzed in an interactive manner,” says Kent Parkinson, chief information officer for Royal Trucking, West Point, Mississippi. “But we’re now on a path to move beyond spreadsheets as we apply modern tools that will help provide a much deeper understanding of our business.”
Royal, like thousands of carriers, is still comparatively early in its BI journey, perhaps just two or three steps into what author and consultant James E. Cates calls the “Ladder of Business Intelligence.” Cates’ BI maturity model comprises six levels of organizational resources and fluency in managing information:
Level 2 - Data: Facts that are given utility through context and accessibility
Make no mistake, everyone knows they need BI; the market is too dynamic for successful players not to understand the importance of gaining deeper insight into the many complex operational factors that contribute to growth and profitability.
But while a majority of transportation businesses are leveraging what they consider to be some form of business intelligence, they might not yet recognize how far they can stretch their capabilities.
“There’s a tremendous gap between the first few steps in that ladder and the ability to consistently and proactively use information to move your business forward,” explains Brian Larwig, vice president and general manager, optimization, for TMW Systems. “In the earlier stages, you’re essentially using data to identify a specific past performance measure. As your capabilities mature, however, you can answer a much more important question: Why did you perform at that level? And next, you can determine which specific changes you can make to improve your performance.”
As transportation businesses ascend this ladder, they increase their ability to leverage data on the leading edge of their operations rather than as a backend reporting tool. Or, as Larwig describes it, they can spend more time “managing through the windshield” rather than from the rearview mirror.
To illustrate the difference, consider the following challenge: Conventional reporting might tell you that you had excess capacity in Dallas during the previous week. A more mature BI platform can help you identify this issue earlier in the planning lifecycle, perhaps in time to solicit additional loads. Today’s most advanced BI tools, by contrast, can enable users not only to pursue that additional freight, but also determine which prospective customers might offer the highest yielding opportunities, not only out of Dallas but also in the context of any subsequent loads for each truck. The dollars-and-cents benefits, not to mention network balance implications, can be huge.