But which of the many definitions of profitability should they use? Blume suggests using the "contribution margin." That's a relatively simple figure to derive, he said, especially compared to net income, which requires users to divide gross income by fully loaded costs.
Getting adoption in a non-techie workplace
Anthony Marano Company is a 50-year-old fruit and vegetable wholesaler in Chicago. Operating out of a single 400,000 square-foot warehouse, the $200-million-a-year family-owned company remains close to its heritage as an Italian American-owned grocer.
"There's a lot of guys named Joey, Nicky and Tony here," joked Chris Nowak, the chief technology officer.
Until 2003, none of Marano's buyers and sellers used computers. Orders were handwritten and vendor and customer information was stored on Rolodexes. All of the expertise resided inside the brains of Marano's buyers and sellers.
This seemed treacherous, considering the real-time nature of Marano's business. The company specializes in supplying produce at the last minute. "We are the 24-hour Walgreen's of fruits and veggies. People buy from us when they are short," Nowak said.
Also, Marano's huge size and customer base means that it could supply vital pricing information back to farmers that could influence their decision whether to go to the trouble of trying to recover a damaged crop, such as strawberries at risk from a freeze. That wasn't easy without a BI system, much less PCs for the buyers and sellers to use.
Nowak was brought in to deploy the company's first computer-based BI system. Knowing that overcoming resistance from the users -- the sales staff -- would be key, Nowak made sure to select an easy-to-use and powerful tool for them.
He licensed the Inxight software owned by SAP AG, which offers a visualization tool called StarTrees. These are circular expandable charts that Nowak purposely chose for their resemblance to old-fashioned Rolodexes.
These charts quickly and conveniently let the sellers get price and stock information on all 1,400 types of produce carried by Marano.
The charts were so useful that soon all 28 buyers and sellers were trained and using the StarTrees, Nowak said. It allows them to offer more fine-tuned pricing to buyers and farmers and move product more efficiently with less spoilage, ultimately boosting profits, he said.