Using Business Intelligence to Manage by Exception

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Business intelligence is used to develop insights into your business for better, faster decision making for greater profitability.  BI is used in both the financial and operational arenas to track, measure, and manage results as well as ongoing processes by aggregating hundreds, thousands, or even millions of data points and presenting them in a way that is easily consumable by the user.  C-level, managers, and analysts are checking to be sure everything is on track.  Or are they?  Sometimes it quicker, easier, and more insightful to look for something that’s not quite right.

The human brain has an amazing capacity to spot change.  In the wild, we see movement far quicker than we take in all the beauty of a still landscape. So it only makes sense that when looking at reports or charts and graphs, what stands out for us are the changes, the exceptions, and the anomalies.  Using business intelligence to highlight those changes and exceptions, therefore, makes perfect sense.

Here are some examples of exception reporting that can save your users time by making changes and exceptions more obvious.

Trend Lines and Sparklines

sales3Trend lines are great—you can see any changes—up or down, good or bad, right away.  A spark lines is just a piece of a trend line without the axes and labels.  You may find that there are some key numbers that are so important that looking at a trend line for that account by itself may be useful.  But more likely, you’ll determine that trends of measures and ratios are more telling.  For instance, you can show a trend line for gross revenue.  A drop in gross revenue is usually a signal of a problem.  But what if the drop in revenue was precipitated by a discontinuance of a specific level of discounts?  Or what if total gross revenue decreased because of a decrease in sales of a low-margin item that was partially offset by an increase in sales of a high-margin item? Instead of showing the trend for a single number, it quite often makes sense to show two or more trend lines on the same graph.  Or you may want to show trends for more complex measures like the ratio sales of product A to sales of product B shown on the same graph with gross revenue and net margin.  Don’t rule out the simple trend line.  It is often an excellent representation of change.

Tabular Reports with “Traffic Lights”

Traffic lights are those colored dots or indicators that appear next to numbers in a tabular report.  Often green signifies a positive change or status and red a negative, hence the term “traffic light.”  The reader’s eye is immediately drawn to the red dots as a notification of a problem or issue.  Sometimes views use several colors and shapes, necessitating a key.  Or there could even be smiling faces and frowning faces.  But the more similar the indicator (like a yellow smile versus a yellow frown), the longer it takes for the important numbers to pop out.  Again, measures makes more sense to highlight than absolute numbers.  Positive and negative changes, ratios above or below a certain percentage, and values above or below a target are the kinds of information to highlight.

Scatter Diagrams, Radar Charts, Bubble Charts and More

fin6There are visualizations that are tailor-made to display exceptions and anomalies.  If your total revenue looks about right but the number of sales is down, you might want to look at all sales on a scatter diagram where you might see one exceptional sale in a month of dismal revenue otherwise.  You can easily spot an increase in work-in-process inventory as a percentage of total inventory by product in a radar chart.  Bubble graphs—if all of a sudden you are seeing a big blue bubble where you never saw one before, that’s something to look into immediately.

This is not an exhaustive list, it’s just a short list of ideas for exception reporting.  With BIO Business Intelligence for Microsoft Dynamics, there are so many different types of visualizations that you are sure to find one that displays opportunities and problems in a way that draws immediate attention for your users.  You can stitch those reports or views into a dashboard that gives users the information they need at a glance.  From the dashboard, they can drill down, filter, swap measures, and more for rapid analysis or collaborate with other users by clipping a note to the view and sending it to someone else.

To see exception reporting using BIO Business Intelligence for Microsoft Dynamics in action, join us for a complimentary webinar, Using BIO Business Intelligence to Manage by Exception, on January 28 at 2pm EDT.

Contact us by phone at 203.327.0800 or email at

By Sandi Richards Forman of BIO Analytics, Corp., Microsoft Dynamics Business Intelligence (BI) Solution Provider